Fraudsters are offering to secure compensation for timeshare owners desperate to escape a holiday property contract – in return for a further fee.
ITRA – Righting the wrongs with Timeshare
Timeshare owners who have fallen victim to fraudsters offering to sell their contracts in exchange for a fee are being targeted a second time by the same crooks promising they can obtain compensation – for a further fee of at least £500.
Timeshares, also known as "fractional ownership", became popular in the UK in the 1980s when waves of Brits snapped up shares in holiday apartments at European coastal resorts, typically in Spain and Portugal. According to the latest European Timeshare Industry Report, Britons and the Irish form the largest market in Europe, with 589,653 timeshare owners out of a European total of 1.5 million.
Contracts written in perpetuity are difficult to break. Many retired timeshare owners are locked into paying high annual fees for an entitlement to holiday properties they do not want. In many cases, these are passed on to family members when the original purchaser dies.
The problem is exacerbated because timeshare contracts are notoriously hard to sell. The company that sold the timeshare may agree to buy it back, or a resale company might find a new buyer – but the price owners get is usually much lower than the one they paid. Worse, bogus resale companies are prolific, offering to find a buyer if owners give them an upfront payment, then disappearing with the cash.
This happened to Craig Williams and his wife Jacquie from Kinross, who have a timeshare at the Moness resort in Aberfeldy, Perthshire. The couple were cheated out of £500 in 2006 by a company called Yacht Trading. It failed to find a buyer for the Williams's timeshare and never paid back their £500. Yacht Trading was wound up in the high court in early 2008, following a government investigation.
Recently the Williams were again contacted by a timeshare-related company, this time called Asset Accountancy Services (AAS). The company claimed it was in a position to retrieve the money the couple had lost in the Yacht Trading scam.
"The salesman told us there was a £4.5m pot of money available to compensate people who had been conned and promised us £2,717.10, which was a lot more than we had lost," Williams said.
"I instantly thought it must be a scam, even though the guy on the phone was professional and gave us his company registration number to reassure us. He also gave my wife the number of the 'Legal Time Share Advisory Bureau' in Gateshead, which he said was some kind of government body for timeshare organisations. But when we rang it later, the woman on the line did not sound very authentic."
The Legal Time Share Advisory Bureau does not appear to have any kind of presence on the internet and when AAS called back, Williams challenged the salesman. "The man said it wouldn't have a website because it was a government body." He then asked the couple to buy £500 in vouchers from online payment service Ukash to cover administration fees, and to call the claims management company back with the voucher codes. Williams suspected they would never see the £500 again if they proceeded.
"At that point I said it all sounded like another scam. He asked who I was so I pretended I was a trading standards officer, at which point he began getting aggressive, especially when I wouldn't give him my name. He must have figured it out because at the end of the call he said: 'You're nothing but a twat. We've got your wife's number now so we'll make sure she gets lots of calls.' It was very threatening."
David Hunter, chief executive of Ukash, said: "We're aware and clearly concerned about fraudulent activity of this type but, for us it's impossible to differentiate between genuine and malicious transactions."
He said if consumers reported a fraudulent transaction to Ukash within eight hours, there was a 50% chance they could stop it going through. He advised people to check the Ukash security tips for more safety advice.
Double-scamming of victims is nothing new. In early March we reported on victims of telephone fraudsters selling bogus energy-saving devices, who were being targeted by the same people claiming to offer compensation. Trading standards warned that the bogus "claims management companies" were offering to secure up to £3,000 in compensation in return for an initial outlay of £300.
Asset Accountancy Services gives an estate in Colchester as its address, but according to Companies House the company has changed premises five times since November 2011. When the Observer tried to get in touch, the phone line was dead.
A spokesman for the Timeshare Association (Tatoc), a consumer association that can help with resales and timeshare problems, said Asset Accountancy was a name that had only recently cropped up. "We've had a few calls about this one now, but all these firms are completely bogus and consumers need to stay away," he said.
"They start off asking for £350 to £500 upfront, but then they will come back and claim they have retrieved £20,000 of compensation for a consumer before demanding £3,000 to £4,000 in order to 'pay the tax'. This is where the real sting takes place. "These tend to be companies who were involved in the original reselling scam, suddenly popping up as a legal recovery specialist a few years later – that's how they have their list of potential targets."
A new EU directive, which all member states had to adopt by February 2011, bans resale companies from levying charges until the actual sale has taken place or the contract has been otherwise terminated. This will help put a stop to widespread fraudulent activity from resale predators, but will do little to prevent bogus companies from contacting previous victims.
The directive also includes rules that might help protect buyers and their families being lumbered with timeshare contracts indefinitely. For example, traders must provide comprehensive pre-contractual information so consumers can make an informed choice prior to being bound by any contract, and there is a universal 14-day cooling-off period during which consumers can pull out of the deal at no cost.
Grace Kerr, a property lawyer at Birketts solicitors, said: "It's very difficult to break a timeshare contract written in perpetuity. The new EU directive will help as it offers greater protection for new purchasers, but existing owners have few options. They can try selling to someone else or handing back ownership to the timeshare organisation (some are better than others and will allow this, usually if the owner is over 75 or unable to use their timeshare), or renting their weeks to someone else, which might help ease the burden.
"Failing that, they could walk away and simply stop paying the fees, but this would be breach of contract and they would probably face legal action. That only leaves the option of claiming misrepresentation, if they can prove they were told the purchase was something it is not, such as an investment, which might work. If the timeshare property is in the UK, the Trading Standards Institute might be able to help."
Tatoc warns against directly contacting any company that promises to cancel your timeshare agreements at low cost. It advises timeshare owners to call its own helpline (Tel 0845 230 2430) to check first. Citizens Advice says anyone thinking of selling their timeshare should talk to one of its advisers, and also recommends Tatoc.
Craig Williams said that he had contacted us to ensure that no vulnerable people fall victim to the double-dip scam. "If I can help stop one granny from being scammed out of her money, it will be worth telling my story," he said. "I wonder how many people got caught out on the day we were cold-called."
Source: Guardian
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AT ITRA Our Aim Is?
Our objective is to support the consumer in timeshare disputes. We have discovered a pattern of abuse, deception and even fraudulent issues that have been systematically perpetrated by many of the major timeshare industry players to the detriment of owners.
To find out more about the International Timeshare Refund Action visit our website www.itra.net
