Rise in timeshare scams forces the EU to legislate!

By Claire Soares
Friday, 8 June 2007

If you thought timeshares and the rogue traders who sold them had been consigned to the Eighties, think again. Property markets have opened up in EU accession states such as Bulgaria and Romania and a modern equivalent - the holiday club - has emerged.

Business is booming, and so too are the scam artists and the complaints of cheated customers. In the UK, between 2003 and 2006, the number of complaints almost doubled, and the trend is being repeated across the Continent. Now the European Union wants to close the loopholes and clamp down on fraud.

The EU's commissioner for consumer affairs, Meglena Kuneva, outlined plans yesterday for legislation on holiday clubs. The proposed law says: "Whatever they are called, consumers who sign up for 'long-term holiday products' will be granted the same rights." That includes holiday clubs as well as accommodation such as boats and caravans.

For Mark Miley, 38, a nurse from Derby, the move by Brussels comes too late. He and his girlfriend, Julie Emberson, are struggling to pay off more than £4,000 of debt after their holiday dreams went wrong. They signed up for a three-year trial period with a holiday club that offered them a steady supply of discount holidays in the sun in return for an initial fee of £3,495.

Disaster struck a few days later, when Mr Miley lost one of his main nursing contracts. He wrote to the club to explain and it was only then that they mentioned there was a limited cooling-off period. And he had missed it. The pair were saddled with the debt. Mr Miley said: "It's weighing on us a lot. We've only managed to pay £60 back so far and the interest has been mounting up. We're at more than £4,000 now. And what makes it worse is that, even though we're still having to pay the sign-up fee, there's no way we can afford to take advantage of the cheap holidays."

Holiday clubs only began after 1994 when consumer protection laws were introduced to regulate timeshares in the wake of the 1980s boom. There is little the Derbyshire couple can do other than pay up.

The UK has more timeshare owners than any other European country, with the most recent data showing UK residents make up a third of all timeshare owners. Across the EU, the number of timeshare units is increasing by about 2 per cent a year, with some 1,500 resorts in all. Traditional destinations such as Spain are still popular but new EU-entrants such as Bulgaria, the Czech Republic, Hungary and Poland are also luring timeshare clients.

Marketing insiders note that potential buyers experience an extremely hard sell - something Mr Miley can testify to. He was sucked in after his girlfriend received a phone call, saying they had won a holiday for two to Tenerife and all they had to do to claim it was attend a presentation.

"I didn't think we were the sort of people to sign up for this. But we were there for three hours, never left on our own to discuss things and every question we asked, they had an answer for," he recalls.

For that very reason, the new EU rules would extend the cooling-off period in which clients can change their mind from 10 to 24 days and make it illegal for sales people to withhold vital information from prospective buyers.