It was only a matter of time before the European timeshare industry collapsed. Or was it that the foundations of the industry never intended to hold it up long-term? For many years, Timeshare provided, in many cases, a far superior standard of accommodation for the many brits travelling abroad. Holidaymakers had become fed up with the poor standards of package holiday accommodation and instead were enticed into purchasing luxury timeshare apartments in the sun. Despite the many horror stories we hear, thousands of Brits enjoyed this way of holidaying for many years.
So, where did it all go wrong?
The method by which Timeshare is sold has always been contentious. Long-winded, high-pressure sales tactics wore down the most resistant of stalwarts. However, despite this, consumers were getting more or less what they paid for. A fixed week in a resort and apartment of their choice. For many, this guaranteed certainty and a standard they were happy with.
In the early 2000s came the introduction of Clydesdale Financial Services(trading as Barclays Partner Finance), which brokered a deal with Resort Properties in Tenerife. This deal opened the floodgates to mis-selling previously never seen before in Europe. Seizing upon the opportunity to make millions, Shawbrook Bank and Hitachi Personal Finance also threw their hats in the ring.
The owners of timeshare resorts saw their profits quadruple overnight. So instead of potential victims walking away because they didn't have the money to purchase, they were now signing up for £20,000 loans! As a result, timeshare resorts all over the canary islands and mainland Spain went from sales of 1 million a month to 4 million a month.
What was in it for the finance companies?
As with all product-based loans, such as furniture and cars, a hidden commison is built into the purchase price. This is the fee that the banks charge the seller. The fee, however, is never disclosed to the buyer.
For example, if you purchased a Club La Costa membership and took out a loan with Shawbrook Bank for £20,000, the hidden commision included in your loan will have been around 10%/£2000. This is the fee that the bank keeps for the benefit of providing the finance facility. The remainder is then sent to the timeshare company. Interest rates on these loans are the other way that the bank profit. In the early days of the infamous Barclays Buy Now Pay Later loans, the interest rate was 19.9%.
It is obvious now that the banks were turnng a blind eye to what was happening abroad. No intervention from regulators or authorities meant that the timeshare companies and financers could carry on with impunity. This impunity was also fuelled by third-party protagonists that were paid by the timeshare industry to drive the propaganda machine.
Timeshare owners were taking out loans to fund illegally sold timeshare investments on the understanding that the finance payments would be covered by rental returns and eventually paid with the sale of their Timeshare. However, unbeknown to victims at the time, they were being given back their own money from the money they had borrowed, and there was never any intention by the resort to fulfil their promise of reselling their Timeshare.
Club La Costa, Diamond Resorts, Resort Properties, Silverpoint, Anfi and Azure Resorts all capitalized on this cash cow opportunity with both hands. Unfortunately, despite the thousands of complaints and claims submitted over the past ten years, it is only now that timeshare owners are being compensated for their loss. The closure of Azure Resorts, Club Paradiso, Silverpoint, Fortina, and Club La Costa has drawn even more attention to the plight of the many victims that have been suffering for far too long.
Greed, Ignorance, Contempt and Arrogance led to the collapse of Timeshare in Europe. There is no doubt that timeshare owners are claiming back what is rightfully theirs. But who was responsible for letting this happen, and why do the authorities seem so scared of getting involved?
Many people seeking compensation have indeed passed away while waiting, and many more have lost even more money by trusting in fake claims firms.
The lack of urgency by the banks is nothing more than contempt and dereliction of duty. They appear unperturbed by decisions by the Financial Ombudsman and still seek to avoid any liability unless forced by consumer champions like us to pay compensation.. If you took out a loan to purchase a timeshare, we are the people you want in your corner.
Call us today to make a Successful No Upfront Fee Claim.
Get In Touch