Welcome to the start of another week with AIT and we continue with our series of articles about Finance and Timeshare. In our first article we explored the difference between a timeshare purchase and any other major purchase where finance is required, this exposed some very concerning practices.
The next article Unmasked: The Truth About Timeshare & Finance Part 1 began by showing how timeshare was sold and the finance brokered by the very same Silverpoint sales staff and managers. How consumers were “sold” finance agreements with Barclays Partner Finance without any real affordability check or other due diligence.
When it became clear these products, financed by BPF, had been deemed illegal in the Spanish Courts in accordance with the Spanish Timeshare Laws enacted on 5 January 1999, many of these consumers began to question their loan agreements. Especially once they had initiated their own legal proceedings against Silverpoint and the courts endorsed their claims the contracts were illegal. This is where their problems began.
They had several options, take the case to a UK court, which would take years and cost a fortune, make a direct complaint and claim against BPF, use the services of the Financial Conduct Authority or just write it off as a “bad experience”. Unfortunately, for the vast majority of these consumers, writing it off was not a viable option, they were in many cases in dire financial straits.
This also left them open to the “scammers”, and their promise of “claiming back” all the money, we don’t need to go on as we all know what the results are.
So, our consumers begin the long and arduous process of filing with either BPF or the FCA, it makes no difference which one you go to, the outcome is going to be the same. Denial.
The only difference is that with the FCA, they will inevitably need to speak with BPF, in other words, they act as a “third party”, and we know whose information they are more likely to believe.
At the end of this process and whatever decision they make, both will explain in their letter your “rights” to have the case “REVIEWED” by a “Financial Ombudsman”.
Enter the Financial Ombudsman Service, (FOS).
This body claims to be “Independent”, yet they are funded by the FCA and their Board of Directors is “Appointed” by the FCA.
The funding is provided by “Levies” paid to the FCA by the “Financial Industry”, there are also charges for “Case Handling”, these “Levies & Charges” can be found at the following links. The first is to the FOS and their page on “Governance & Funding”, the second link is provided by the FOS and directs you to the FCA page.
https://www.financial-ombudsman.org.uk/who-we-are/governance-funding
https://www.fca.org.uk/firms/fees
The FOS page also shows a link
https://www.financial-ombudsman.org.uk/businesses/resolving-complaint/case-fees
Where they explain the “Case Fee”, which is only payable after the 25th complaint in a given year, the first 25 are all free!
They do go on to say that when charged the fee is payable regardless of the outcome, but it is the next paragraph that we do find to be rather concerning.
“Most businesses have very few cases referred to us, meaning that most businesses don’t pay any case fees. For businesses that do pay case fees, the cost involved is likely to be much less than the legal costs of defending the case in court.”
It sounds so much like a “Timeshare Pitch” but in this case “Touting” for “Levies”, “join our club and save money!”
Yes, we do know that taking a case to court is expensive, hence the reason consumers don’t use that route, but surely they should expect that their cases are dealt with using just the same diligence as a lawyer would in preparing his client’s case for court?
It is clear from all the cases Timeshare Insider has been involved with over the past few years this is not the case, all documentation from the courts showing the illegality of the contracts sold, evidence of criminal investigations being ordered by the courts. Yet the FOS “Investigators” cannot see anything untoward in the “legality” of these agreements.
AIT finds this very strange, as we found on their website “glowing” testimony to their “work” in the PPI scandal. The way these “Insurance” policies were sold led to thousands of claims for mis-selling, I also speak from personal experience on this. When I was taking out my first mortgage, the mortgage broker, introduced by the estate agent, indicated very strongly that if I didn’t purchase the PPI, I wouldn’t get the mortgage.
A downright lie I eventually found out, plus the policy was actually worthless.
Link to FOS PPI Search
Now, take the example of our Silverpoint clients, their loan was brokered on a lie, the “investment” weeks would yield a rental income and profit with the eventual sale of those “investments”. This would pay off the loan within 2 to 3 years reducing the amount of interest leaving the “client” with a bigger “profit”.
Now if the first example is mis-selling and confirmed, so, what does that make our timeshare example?
It has been proven in the Spanish Courts the sales of timeshare not just by Silverpoint but other companies as well have been deemed illegal. But unlike the “PPI Scandal,” no notice is given to the consumer’s complaints, by both the FCA and the FOS. We expect BPF to deny these complaints, but so-called “Independent” bodies to confirm those denials is not what is expected by consumers.
This also brings to mind the similarity between the Resorts Development Organisation (RDO) and the FCA, both are “regulatory & trade bodies”, both are reliant on funding from their respective industry. In the case of the RDO, timeshare developers and resorts, one was Silverpoint, who is reputed to have been the largest contributor, their CEO was even on the Board of Directors of the RDO.
Yet the RDO said nothing about all the thousands of complaints about Silverpoint (& Azure), even down to the point of stating the Spanish Courts have got the “LAW” wrong, the FCA & FOS side with the funders in the same way.
Along with the FCA decision to validate “dodgy” loan agreements by Azure through BPF, the FCA is certainly in the firing line. Jean-Baptiste Andrieux and Clive Waller published the following articles in Money Marketing, the first link is where MM meets Mel Stride from the Treasury Select Committee, who apparently is gunning for the FCA.
The second link is to Clive Waller’s article published today, where he asks the question, The UK has one of the most regulated advice markets in the world — so why isn’t it working?
https://www.moneymarketing.co.uk/opinion/what-is-the-real-cost-of-current-regulation/
That is all for today, we shall be revisiting and exploring this subject further, there are certainly many questions that need answering, not just timeshare consumers, but consumers in general.
We hope you had a good weekend, unfortunately, “Baby Dog” was being a little too naughty on Sunday and ended up being grounded and sent to “Doggy Jail”. This is him on release.
