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OFT Seeks Evidence of Timeshare Resale Scams

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17 Apr 2011

OFT Seeks Evidence of Timeshare Resale Scams

Brussels 5th February – The OFT is appealing for complaints from timeshare owners who have received unsolicited approaches by scammers claiming to be resale agents and promising a ‘guaranteed buyer’ and a high price for their unwanted timeshare.

The OFT is aware that many owners have already lost hundreds of pounds to bogus timeshare resale companies with some having also been conned into paying thousands of pounds to obtain bogus holiday club membership on the basis of false promises.

Typical complaints state that the owner of a timeshare has been subject to an unsolicited telephone call by a bogus timeshare resale company which claims that a ‘definite buyer’ has been found for their timeshare and that an above market offer has been made to buy it.

Consumers are first tricked into making an upfront payment of several hundred pounds, to cover so-called ‘administration costs’ or ‘land registry charges’ but then the ‘definite buyer’ falls through. The consumer is subsequently asked to attend a meeting with another buyer, often referred to as a ‘corporate buyer,’ to discuss their offer. Often these meetings take place abroad, most commonly in a Spanish resort or other holiday destination where the consumer is made to sit through a high pressure sales presentation often lasting several hours. They will be offered membership of a bogus holiday club in exchange for their timeshare plus an additional payment of several thousand pounds. The OFT is warning timeshare owners to be cautious if they receive an unsolicited approach by a company claiming to be able to sell their timeshare who:

* requests an up-front fee such as an administration fee, VAT, land registry charge or insurance cover
* offers an unrealistic purchase price – often higher than the original purchase price
* says they have a confirmed buyer waiting or a ‘corporate buyer’
* pressures you into making a decision on the spot
* asks you to go abroad to complete a sale.

Genuine avenues for timeshare resale do exist but the OFT advises owners to always take advice first, do some research on the company making the offer and to check out the truthfulness of any promises made before making a decision.

The OFT is asking any UK consumers who have lost money to timeshare resale scammers to make contact and provide it with written information and documentation. The OFT is appealing for information from consumers who, having signed up, attended a holiday club presentation in Spain and having purchased holiday club membership found the services on offer in terms of range, price and quality of holidays not as promised by the salesmen. The OFT cannot intervene in an individual case or get consumers’ money back for them, but the evidence provided could strengthen any enforcement action to be taken by the Spanish authorities and ensure that those who mislead consumers are prevented from doing so in the future. Any consumers with a complaint about timeshare resale scammers or bogus holiday club operators should write to the OFT at: ScamBusters, Bogus Holiday Club Project, OFT, Fleetbank House, 2-6 Salisbury Square, London EC4Y 8JX. We will acknowledge all receipts and will contact consumers again should we require further details.

Mike Haley, OFT Director of Consumer Protection, said:

‘As the public has become more aware of the dangers of bogus holiday clubs and the tricks used, so the scammers have changed their tactics. Increasingly timeshare owners are being targeted with the bait of a fictitious timeshare resale used as a means of hooking consumers into buying a bogus holiday club membership.’

Elisabetta Sciallis, from the UK European Consumer Centre (UK ECC) which provides free and confidential information and advice for the resolution of consumer cross-border disputes said:
‘This issue is a major threat to consumers and we encourage consumers to support the OFT initiative. The UK ECC has seen an increase in the number of complaints related to timeshare resale operators. Overall 40 per cent of the cases dealt with by the UK ECC involve timeshare resale, Holiday Club and similar products.’

NOTES

1. The OFT has joined with partner organisations in Spain, Belgium, France, Sweden and Norway to work on a project aimed at reducing the harm caused by the unfair trading practices of bogus holiday clubs and their marketers which it is estimated cost EU consumers millions of Euros every year. For more details see press notices 65/08, 67/08, 129/08.

2. The UK European Consumer Centre (UK ECC) provides free and confidential information on consumer rights in the European Union and assists consumers with cross-border disputes. The UK ECC is part of the ECC-Network, which consists of 29 centres in Europe including Iceland and Norway. UK ECC is funded by the European Commission and the Department for Business, Enterprise and Regulatory Reform. You can find the UK ECC contact details on the UK ECC website or you can contact us by email at ecc@ukecc.net.

3. OFT research shows that 78 per cent of bogus holiday club victims are aged between 35 and 64. The average loss per victim is £3,030.

4. Not all Holiday clubs are bogus products and there are legitimate avenues for timeshare resale but there are many unscrupulous companies who mislead over potential sale prices and availability of buyers and who mis-sell their product and wildly exaggerate its benefits and its value. The OFT has produced a consumer leaflet to help prevent people being caught out by bogus holiday club hard sell. The leaflet can be downloaded from the publications area of this website or ordered by calling 0800 389 3158.

5. The UK European Consumer Centre (ECC) is able to act as a mediator between a complainant and a trader by providing linguistic and legal assistance so that a satisfactory solution may be reached. The ECC may also be able help complainants claim for any financial loss suffered as a result of entering into an agreement with a trader. Please check the UK ECC website for more details or phone on 0845 604 0503.

6. Consumers can also contact Consumer Direct for clear, practical consumer advice on 08454 04 05 06. Consumer Direct is a telephone and online consumer advice service funded by government and managed by the Office of Fair Trading. It offers clear, practical and impartial advice and information about consumer rights.

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