Selling ‘Timeshare – Finance’
Selling ‘Timeshare – Finance’
When buying a timeshare some consumers have a need to take out a loan, whilst others pay for the timeshare from their own funds. Equally some pay part by credit and own funds. In this article we are dealing with Consumer who are sold loans and timeshare in the same sales event.
Finance Companies have financial products to sell. When in the confines of a sales it stands to reason that the first and principle contract entered was that of the provision of finance as without that finance the consumer could not acquire the timeshare product. Therefore, the sale of the timeshare contract only came into existence because of the provision of finance offered in the finance contract.
The interesting feature in the sales of Timeshares is that both contracts are discussed, offered and sold by the same representative and when sold the finance company pay to the seller a fee for selling the Banks Product.
Accordingly, the sales person is employed by both the bank and the timeshare seller and the transactions are linked.
Sales of Finance and Timeshare products is termed are regulated business, Finance under Regulated Activities Order 2001 and the timeshare, via the Timeshare and Long-Term Holiday Products Regulations 2010.
When selling Finance those who sell it, should be regulated (including their agents and servants). If they are not regulated and you were sold a loan by an unregulated seller, they have acted contrary to the Financial Conduct Authority.
It is the responsibility of the Lender to establish whether its proposed business and its activities require authorisation to carry out regulated activities and if authorisation has not been applied for or granted they have mis-sold the finance and will be discipled by the FCA.
If the seller of finance is in any doubt about whether it is carrying out regulated activities they are required to make enquiries for themselves, and should permission be required, they too must be regulated.
For guidance on activities which are regulated and when you may require authorisation, see our Perimeter Guidance Manual.
Consumer Credit Activities are: -
- Entering into a regulated credit agreement as lender.
- Exercising, or having the right to exercise, the lender's rights and duties under a regulated credit agreement
- Credit broking
- Debt collecting
- Providing credit information services
- Providing credit references
- Operating an electronic system in relation to lending
- Full or limited permission?
- If you’re not sure whether you need to apply for full or limited permission, use our step-by-step tool to help you decide.
- See the consumer credit activities needing full permission
- See the consumer credit activities needing limited permission
- Designated investment business
- Advising on investments
- advising on investments (except pension transfers/opt outs)
- Advising on P2P (peer-to-peer) agreements
- Arranging (bringing about) deals in investments
- Making arrangements with a view to transactions in investments
- Dealing in investments as agent
- Dealing in investments as principal
- Managing investments
- Electronic money
- Issuing electronic money
- As a lender supporting timeshare purchases you need to be regulated.