Timeshare, a word that tends to bring shivers down the spines of many, it began with the sale of a dream which turned into a “Nightmare”. The original idea was actually very sound, you own a specific week in a specified apartment, it was guaranteed, then the rot set in.
It went through various changes, bringing in the points system and floating weeks, with these you owned nothing apart from the right to use, you became a member of a “Vacation Club”. At first, there was no problem, fixed week owners converted to points or floating weeks, availability was fair until they increased the number of members. Then the availability became a problem, more members than weeks available.
But one timeshare developer took it even further, they turned it into an “Investment Opportunity”.
The company was Resort Properties, which was renamed Silverpoint, the same company, same manager, same CEO, even their CIF Number (Spanish company registration & tax) was the same, yet they claimed it was a takeover by another company.
Both are part of Limora Investments Ltd, the company owned by the late Robert “Bob” Trotta, along with Azure, based in Malta. The company chart which can be downloaded from the PDF below, it is certainly a very tangled web.
Directors information and relationships.docx
It appears they were not satisfied with just selling weeks for people to use, they designed a “new product”, which became known as “Investment Packs”, the deal was very simple and it fooled many.
In essence, the scheme consisted of a “pack” of weeks, these ranged from 4 weeks upwards depending on “affordability”, the most common being 6 or 8 weeks. These weeks would provide an income in rental revenue, then after a period, usually two to three years these would be placed on the resale market. The promise was a minimum of 15% profit.
These packs were also rolled out in Malta at the Golden Sands Resort, peddled by Azure with sales staff and managers from Silverpoint overseeing it.
Needless to say, none of these sales ever materialised and for most neither did any rental income, yet they were still liable to pay the annual maintenance fees on all weeks. They also did not actually have a right of use for these weeks.
The first court case in Spain against these contracts was filed around 2011, it was not until 2015 that the Supreme Court, Spain’s highest court, ruled in favour of a UK consumer. They acknowledged the sale was for “timeshare” and not an “investment in property”. In other words, the consumer was lied to about what they were purchasing, believing they were making an investment in property. Spanish Timeshare Law and the EU Directives on Timeshare clearly state that it is not an investment and should never be sold as such.
Silverpoint further enhanced this “investment” idea in an attempt to circumvent the law and the rulings which enforced it, rolling out the “Company Participations Scheme”.
It is exactly the same as the “Investment Packs” apart from the “apartments” are turned into S.L. (Sociedad Limitada) Companies, the equivalent to a limited company. The company names reflected the apartment number and the resort such as Palm Beach 112 SL.
This company was registered with Spanish Company House, in many of these registrations, there was a sole Administrator, a name which is synonymous with Excel, Silverpoint and Vacation Finance Limited, Diana Aitchison.
The one thing in common for the vast majority of those who succumbed to the sales reps patter is they all ended up with Finance.
This was brokered by the “sales Reps” & Manager” of Silverpoint and Azure on behalf of Barclays Partner Finance. Some consumers found that it was Vacation Finance first which was then transferred to BPF. Whichever way, the loan agreement is with Barclays Partner Finance. Something was horribly wrong here.
Now, many are questioning BPF about these loan agreements, they either make a claim/complaint direct to BPF or they pursue a complaint with the Financial Conduct Authority.
This is where we now find that consumers’ interests are being denied.
The Financial Conduct Authority
This body was formed in 2013 along with the Bank of England’s Prudential Regulation Authority when the Financial Services Authority was disbanded. They are separate entities with some differing responsibilities, they also work closely together.
The FCA came to light in the timeshare world when Barclays Partner Finance approached the FCA with a problem. It transpired that many agreements brokered by Azure sale staff were not valid, apparently, Azure was not “Authorised” as a recognised broker. This meant the loans agreements could not be enforced in the event of a default in payments.
BPF applied to the FCA for a “Validation Order”, which would make these loan agreements legal and enforceable.
The FCA without any investigation into “Consumer Detriment” sided with BPF and issued a validation order. This now affected over 1,400 Azure clients. That decision was then contested in court.
Judge Timothy Herrington, of The Upper Tribunal, Tax and Chancery Division of The Royal Courts of Justice, presided over the case; this was held on 19 June 2018.
On 1 August 2018 Judge Timothy Herrington issued his judgment.
He ruled that the FCA did not take into account “Client Detriment” when they issued the validation order, his ruling was that the FCA re-evaluate that decision and take into account the client detriment.
He stated that the client detriment revolves around the following:
- Clients were not given sufficient information as to the terms and conditions of the loan agreement required by law;
- There were no major credit checks made as to the affordability of the repayments such as income versus outgoings reports;
- The length of the loan agreements were not explained, with clients under the impression that they were for two years;
- Clients were pressured into signing these agreements;
- False representations were made to clients relating to the financial impact of regulated agreements;
- Clients were subject to long high-pressure sales tactics to purchase the timeshares;
- Clients were sold timeshares that were not appropriate for them;
- Vulnerable consumers were treated inappropriately;
- Concerns about commission arrangements and disclosure thereof.
The FCA must now re-examine the original validation order and take into account the client detriment statements of the borrowers.
It is obvious from his ruling, he believes that something is very seriously wrong, everything he has said is what we have been saying for years. It is also known that he is keeping a close eye on this matter, which at present is still ongoing. It should also be mentioned that BPF appears to be settling some of these claims.
This is only one example of what we believe to be collusion between the finance giants and a regulatory body entrusted to protect consumers.
But this is not the end of it, once you have made a complaint to either Barclays Partner Finance or the Financial Conduct Authority, you then have to jump through so many hurdles and in the end both reject your complaint. They apologise and set out their reasons, none of which make any sense, but you do then have a right to appeal to the Financial Ombudsman Service.
This is another giant hurdle that you will have to negotiate, it is the inability of the FOS to listen to the consumer’s side of the story, the lack of knowledge of the so-called “investigators”, who invariably side with BPF.
Join us tomorrow for the final part which will show the Financial Ombudsman Service at its worst.
If you have any comments or questions on this subject, please use our contact page and we will get back to you.
