Judge Herrington Issues Judgement: FCA, BPF Validation Case

The long-awaited judgement on the case of the Financial Conduct Authority issuing a validation order for loan agreements brokered by Azure Services Ltd, for and on behalf of Barclays Partner Finance was released by His Honour Judge Timothy Herington on 16 June 2022. It has been four years since the case first appeared at the Upper Tribunal (Tax & Chancery) of the High Court in London, a case which involved around 1,400 clients.

It is all centred on the application for a “validation order” by Barclays Partner Finance on loan agreements entered into for the purchase of timeshare “interests” in Malta brokered by Azure Services Ltd, the sister company to Silverpoint both part of a wider group of companies which are part of Limora Investments Ltd, (owned by the late Robert “Bob” Trotta). Both companies are now in the process of liquidation with investigations into possible criminal activity involving “money laundering”.

BPF applied for the order as it became apparent that many loan agreements were not “enforceable” as the broker Azure Services Ltd was not authorised to broker such loan agreements. Remember as well, it was the same sales staff who were selling the “product” and the finance, all as a package.

BPF realised that in the event of any default in repayments, not one of the over 1,400 loan agreements could be enforced, a value of around £48 million. The Financial Conduct Authority granted the “validation order”, which now meant all loan agreements were enforceable in law.

That was the start of a long road for the three main groups involved, Azure and Barclays Action and Support Group, represented by Mr Ivor Williams, The Rebbeck Applicants, represented by Adriana Stoyanova, a lawyer for M1 Legal and Hogan Lovells International LLP. There were many others who were either legally represented or represented themselves.

In the first hearing held on 18 June 2018 at the High Court in London, Judge Herrington made it very clear that he was not happy with this case, that there was something very much amiss. The missing factor was the neglect of the FCA to take into account the “client detriment” factor when granting the order.

The FCA was ordered to go away and re-examine the BPF application and take into account the representations made by the clients in regard to “client detriment”. Very basically this means the client is likely to suffer financially if the agreement was legalised, for those who purchased not only from Azure but also from Silverpoint, are fully aware of the financial burden those purchases and agreements have had, validated or not.

As we reported previously, BPF made an offer of settlement to the FCA, which clears all loan agreements, and repays all interest with the full purchase price, for all those affected by the validation order. BPF has also gone one step further, they have included all loan agreements for products sold by Azure which were not included in the original validation order.

As the FCA and BPF have complied and settled the matter, that concludes the case brought before Judge Herrington and he has now brought these proceedings to a close by issuing his findings. The official PDF of Judge Herrington’s findings can be downloaded at the end.

The bulk of his findings are related to various legislation and what is relevant to the case, it also highlights the differences between various sections and how it affects the consumer. This is mainly in the area of claiming compensation, a point he makes clear in his findings that his concern was to “ensure that the right to claim compensation was not prejudiced by any decision made in these proceedings to dismiss the current references” (Page 11 Para 55). This is however a separate matter and is not part of his remit.

His Honour Judge Timothy Herrington

The most important point for all those who purchased from Azure is contained in the following (Page 2 Para 3):

“It should be noted that the Regulated Agreements were entered into in order to finance the purchase of timeshare contracts at a resort in Malta. All of the Applicants alleged that they were given a “hard sell” by the Azure Group and encouraged to take out regulated loan agreements to purchase the timeshares with the promise that the timeshares would rapidly increase in value which could quickly be sold for profit, and the loans repaid. They allege that these promises have failed to materialise, consumers have largely been unable to re-sell their timeshare packages and have been left significantly out of pocket and with outstanding loans. The consumers contend that misrepresentations were made to them during the sales process by the Broker and that the Regulated Agreements (and the underlying timeshares) were mis-sold.”

This is the first time we have seen anything from a UK court that recognises the failings of the timeshare industry and how they sell and finance these purchases. All applicants who purchased these timeshares from Azure gave the same story, the “investment pitch”. How they could make money from the rental and then subsequently from selling. It was sold as if it was real estate property, with promises of clearing the loan and making a profit. The same pitch was given to Silverpoint purchasers in Tenerife, the original home of the “investment packs”, all of which have been deemed illegal by the Spanish Courts including the Supreme Court.

Yet we see the FCA dealing with consumers’ complaints about the very same loan agreements and products on the basis that the loan agreement was brokered by an authorised entity. As far as they are concerned the fact the loan agreement was brokered to purchase illegal contracts is of no consequence.

The FCA and BPF also fail to recognise that Azure and Silverpoint are part of the same group of companies, all of which are under criminal investigation on an international level. We are not just talking about the fraud around the timeshare sales, this goes even further and money laundering is only the tip of the iceberg.

It has been a long and hard road for all the consumers involved in fighting this case, the main part is over, it is now the process of getting the original payments and the matter of compensation. If anything, they have achieved one very important victory, a judge has voiced his concern over the sale and financing of timeshare purchases.

We can now only hope that BPF and the FCA re-examine all finance agreements for all purchases from Silverpoint and that they recognise that the sales and the corresponding loan agreements they brokered are fraudulent. BPF are aware of this due to the number of complaints and claims they receive, they are also very much aware that no checks were made as to affordability, income or expenditure. BPF has never been able to produce a single “due diligence” report. In our eyes that makes them either very inept and nieve or very much complicit and it is about time they came clean.

The most overriding point that all concerned are missing are the statements from those who purchased, all say the same thing, and all have multiple purchases with long-fangled contracts which are worthless. They all name the very same sales staff from the first purchase to the never-ending upgrades to secure their “investment”. Surely they could not have all come together and concocted it all?

The story of BPF and other finance companies who have made millions from timeshare is one that is not going away soon, especially for Silverpoint clients. There are also other companies involved in finance for timeshare and other resorts whose sales offices brokered loan agreements, these are also subject to complaints and claims to the FCA. It could become very costly for the finance companies.

Judgement from His Honour Judge Timothy Herrington


If you would like further information on the process of making a complaint either directly to your loan provider or to the FCA please use our contact page and we will get back to you. AIT will explain the full process of doing it yourself (at no cost), this will include the probable time it will take and what obstacles you are likely to face.

AIT also reminds all our readers of cold call campaigns enticing you to sign up for claims and exits, the promises will entice you, just like they did for the purchase of your timeshare, this time you have the opportunity to do your own “DUE DILIGENCE”.

Tomorrow we bring you “How to Write a Timeshare Report and File Regulatory Complaints” by Fran Dygulski, with the Introduction by Irene Parker, another article from our friends in the US. These series of articles do show how timeshare affects consumers in the same way, the same problems with exits, complaints and above all the scams associated with timeshare. We know from experience that what happens on one side of the “Great Lake” will eventually manifest itself on the other side, so join us tomorrow for more facts with AIT.


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