Long-Term Holiday Products

 

What is a long-term holiday product?

History has evidence that these types of products came into existence due to the blight timeshare began to attract in many quarters. Dropping the words and references to timeshare ensured the products sold better. Some in timeshare will tell you that some of the nasty and failed timeshare operators perverted the product for a ‘quick buck’ and timeshare was tarnished further.

The long-term holiday product contract in respect to the European Consumer Centre means ‘a contract under which a consumer, for consideration, acquires primarily the right to obtain discounts or other benefits in respect of accommodation, in isolation or together with travel or other services’. In this description a long-term holiday product can be, for instance, ‘a discount holiday club’, which offers access to its webpage where the consumer can find discounted hotels, air tickets or car rentals possibilities.

The second qualification is that a long-term holiday product contractually exists for ‘more than 1 year’.

The law states that timeshare and long-term holiday products are contracts between a trader and a consumer with a duration of more than 1 year, or contains provision allowing for the contract to be renewed or extended. The law also states that ‘a consideration is required’ from the consumer and paid to a supplier to ensure the consumer can rely upon the rights granted under law.

Timeshare is a right to use overnight accommodation for more than one period of occupation, including accommodation within pools of accommodation.

A long-term holiday product contract's main effect is a right to obtain discounts or other benefits in respect of accommodation.

Legislation came into effect because of many complaints, regarding timeshare's associated and related products and after the consultation, enquiries were sent back.

The definitive difference between timeshare and long-term holiday accommodation is that timeshares are defined as 'accommodation' and long-term holiday products as 'discounted accommodation'.

In schedule I of the regulations 2010, a timeshare contract sale requires the consumer to be told the costs of the taxes, fees, administrative overheads, management fees, maintenance fees and in schedule 2 [long term holiday products]  the seller is required to inform the consumer before acquiring the product what ‘the annual membership fees will be’.

This indicates that a timeshare relates to costs regarding liability to discharge costs of maintaining property and long-term holiday products are that of club membership.

The expressly represented difference implies one is property ownership, the other, a membership in a club.

The topic gets more interesting when consulting the consumer's statutory reserved rights contained in the sections section 24 of the regulations 2010 as it states

‘A consumer who is party to a long-term holiday product contract may terminate the contract [no later than 14 days after any day on which the consumer receives a request for payment] in accordance with this regulation without incurring any penalty’.

Accordingly, what's at issue is, the 2 products have different statutory implied rights, a LTHP you can get out of, whilst a timeshare you can’t. Should a consumer retain a points-based timeshare, fractional timeshare or any pure/enhanced points structure, whereby the rules are that you the consumer are a member of a club and pay your annual fees by way of a membership fee, is your product a long-term holiday product and can be cancelled anytime you want? In this back-drop resorts are denying terminations and the legal profession is charging £000’s for simply writing a letter on your behalf.

The KEY INFORMATION should be given to you before you sign a timeshare or long-term holiday product contract and you should be asking “was a description present in the documents you were given?" Does the word “timeshare" feature in the documents? If not, you were not sold a timeshare!

If the resort concludes you were sold a timeshare. The questions to yourself would be: -

Do you have a statutory right to know what you were buying?

and

Do you have a right to cancel the contract and seek damages?

On the face of it most would advise "yes". If you need good advice, consult a real lawyer who will give you a comprehensive report, a letter of termination and good advice.

We can help you with that.

 

Leisure Credits

For years consumers have desired holidays, much like other products. The first holidays (taken abroad) by the masses were ‘package holidays’ whereby all the hassle was taken away, when you presented yourself at the airport.

The package holiday got you through the airport and onto the flight, which took you to an airport (near the resort) and then you were signposted to awaiting buses which took you to your hotel.

A welcome meeting was arranged, and 24-hour assistance was provided during your stay. When the holiday period ended, you were picked up, taken to the airport and flown back the airport you departed from.

Then came self-catering holidays whereby flights, accommodation, and transport to and from the resorts were provided.

As time moved on, holiday companies introduced, adventure, dual destinations, build your own holiday, line building holidays and go west globe holidays etc. Along came variations in how you paid for those holidays, (by cash, cheque, Green Shield Stamps, credit card, loans, deposits etc). and DIY holidays whereby you paid separately for each facet of your holiday.

When leisure credits were originally introduced, you paid an amount each week/month and were given credits. When enough credits were amassed, you booked your holidays, weekend away, spa days or balloon trip etc.

Then brewed in the minds of salesman was a horrific divergence of a criminal form of leisure credits.

More akin to a scam, Eze Group (Europe) Ltd claimed to have negotiated with event owners and holiday companies, a discount off the ‘rack rate’ therefore they operated on a margin called the merchant's discount.

They only received the merchant discount if a traveller booked with them.

This product consisted of selling the alleged discount up-front and if as a consumer you paid what was asked, you were sold a number of credits. When you cashed the credits in, you were required to pay more money and with several credits, you could get what you wanted. Of course, there were variations to this theme, but essentially you bought into a represented discount.

It was reported that the discount did not exist, the leisure days were non-existent, the prices were more expensive, and the legal service did not materialise therefore, many complained. When they did complain they were then harassed by a legal company.

The system was a private closed loop currency system which needed to but did not, comply to the Electronic Money Regulations which are policed by the Financial Services Authority (FSA).

In short, it’s for each consumer to decide which holiday offers the best price and for the holiday they require.

Timeshare and anti-timeshare products naturally compete. However, in this case leisure credits also targeted timeshare owners therefore, you would expect the timeshare industry would defend themselves and their products.

The timeshare industry and TESS (Timeshare Exit and Support Services) Ltd  investigated the matter and concluded that the products Eze Group sold were a sham, despite them being certified as being sold correctly by Eze Groups in-house lawyer Mr G Smith.

Leisure credits that targeted the timeshare industry products, claimed all the timeshare products were unlawful, that consumers would be paying substantial sums for the rest of their life and would receive no benefit, which was untruthful. They claim that by buying leisure credits they would save £000's and the hassle would be taken out of everything. The facts were that it was a “mug 'em and run” product and the sellers were arrested, charged and plead guilty to the ruse.

For 3 score years and more the timeshare product has suffered at the hands of bad and illegal operators, fake lawyers, fake re sellers and unscrupulous people who have trashed what essentially is a good product.

Leisure credit schemes:

Credits are sometimes bought outright or represent a product discount. Normally one-off purchases, the credits can cost consumers up to £15,000 and can then be exchanged for leisure products such as holiday accommodation, spa days and theatre trips. Hallmarks of these schemes can include: being verbally sold as a way of offloading or trading-in a timeshare or holiday club membership, when consumers have second thoughts they can find themselves unable to cancel their contracts.

Complaints about leisure credit schemes rose by 140% in the year to the end of March 2013 compared to the previous year (the year to the end of March 2012). There were 25 complaints in the year to the end of March 2012 compared to 60 in the year to the end of March 2013”.

 

Anti-Timeshares

Prepaid holiday entitlements

‘As a consequence of matter, you have anti-matter’ As a consequence of timeshare you have anti-timeshare. For all its sins, the timeshare industry is a well-known product with an established market and millions of consumers worldwide.

Most resorts are good, honest and honourable but in all cases, no one found God in timeshare. The good timeshares continue to be sold, traded, re sold, and traded back to resorts and most owners love them. The bad timeshares should be re-classified as confusing some good, some bad, as the owners have expressed little control in how they were sold. Then you have the ugly timeshares [the downright nasty timeshare operators] and everyone knows who they are.

The instinct is that the unhappy and upset ‘shout from the hilltops’ whilst the happy are silent. Sectors that have been defrauded will rain down dissent and others will be persuaded to join the booming voices. At that point the routing of a product is before you. Despite 40+ years of that rout, timeshare is still in existence which begs the question, are timeshare products that bad?

Apart from the dissenters you have the poachers who claim that their product is better than a timeshare and they too, hang around the periphery and sell anti-timeshares.

An anti-timeshare is simply an upfront payment for a fixed number of holiday weeks in a resort which you can book anytime or in certain periods.  So, you consider how many times you want to go to say the Costa del Sol and buy say 20 weeks. The issue is you can’t sell them to anyone and the value will not be redeemed. In some cases, you must take them in a limited period and the killer is “if available”. If they are not available you simply don’t get a holiday, if they are continually unavailable and your period expires you don’t get your holidays nor the money you paid.

 

Timeshare as an investment

The term 'investment' can refer to any mechanism used for generating future benefit. In the financial sense, this includes the purchase of say, stocks, shares or property in the hope that it goes up in value.

In respect to your children, you will invest in their health, welfare, education so they have a good start in life and are able to advance quicker than other children. Additionally, you can construct an investment or pipeline of income in say a piece of art, song, poem etc that others would like to own.

When considering a consumer buying a timeshare many believe, or are led to believe that what is being sold is property that might, or will go up in value. Sometimes it is referred to as an investment, or a product that might be capable of delivering an investment return should the client hang onto it for some time.

If fact the law makers in Europe have considered this very issue and stated in the regulations 2010 section 14 (3) “A trader must not market or sell a proposed timeshare contract or long-term holiday product contract as an investment if the proposed contract would be a regulated contract”.

If they do, it’s an offence.

Timeshare is a product that will diminish in value, it’s difficult to re sell and you will need an expert on board who will abide by the law.

 

Benefits and detriments of timeshare

In this advice, I don’t intend to disparage any product, nor add grizzly screens to your own quiet contemplations. The issue should be viewed as opinions and you may be best served by seeking counsel of others to add balance.

Timeshare has a very bad name despite the industry trying very hard to lift that name from the doldrums.

The developers have trouble in controlling its data, as they have in the past given that data to others to ensure the sales marketing is fully optimised and when a sale is taking place, that salesperson needs the information.

When dismissed, the sales marketing teams, its employees and touts have taken the information and sold it to cold calling centres to target timeshare consumers. Salespeople are not licenced nor regulated, and products are not placed for approval to others.

The industry has extreme difficulty in cultivating good relations with others whose goal is to inform consumers of their rights and does not make meaningful efforts to assist good relations with anyone outside their fold. Some will say for good reason, as many take what they can from them and further tarnish the industry. Others will use the information to ensure that they can chisel away, find perceived flaws and convert them into a trigger to get consumers to acquire anti-timeshare products.

Some timeshare products are complicated, very hard to understand, and are covertly costly to buy and maintain, and coupled with a lack of an agreed existing plan, dissent is escalating.

Despite all this timeshare is a good product, capable of delivering so much to the many and forever. The bolt-on products are very helpful, deliver good concepts and allow timeshare owners to travel all over the world. In the main, timeshare resorts have a loyal clientele who would love to promote it and show to the world it was worth it in the end.

Timeshare can deliver permanency, is capable of delivering rental returns, swaps, exchanges and can be an investment if a re-sale market is created. This can’t happen unless a united industry body in UK is formed with a visionary as its directing mind not the legal profession.

If timeshare was a single company, it would have hordes of corporate investors chomping at the bit trying to buy in. If a pixilated website called facebook can be worth billions, how much could an army of timeshare holiday makers be worth, if the big fix took place.