Consumer Protection from Unfair Trading Regulations (“the Regulations”)
Timeshare Clients have generally contracted with resorts as E.U/British consumer and as such, the Regulations accordingly apply. Pursuant to the Regulations resorts are/were prohibited from undertaking an unfair commercial practice including those practices which:
- Materially distort the economic behaviour of the average consumer in relation to a product (regulation 3(3));
- False or misleading practice (regulation 5(2)). It is a false or misleading practice to provide false information or deliver an overall impression that deceives or is likely to deceive, even if the information is factually correct about the nature of the product, the main characteristics of the product and the price. This false or deceptive information must also cause or be likely to cause the average consumer to make a transactional decision he would not have otherwise taken (regulation 5(4));
- To make a misleading omission – if taking into account the circumstances of the commercial practice and the medium used to communicate it you as a trader omit, hide, disguise or delay material information so as to cause the average consumer to make a transactional decision they would not otherwise have made;
- Commercial practices which are aggressive. This includes practices which are likely to significantly impair the average consumer’s freedom of choice or conduct and causes (or is likely to cause) the average consumer to take a transactional decision that they would not otherwise have taken. The regulations provide a non-exhaustive list of factors to be considered including:
- the timing, location, nature or persistence of the practice;
- the use of misinformation
- Schedule 1 of the regulations also contains a list of 31 commercial practices which are in all circumstances unfair and thus banned outright. Our Clients are not obliged in relation to these blacklisted practices to produce any evidence of their effect or likely effect on the average consumer. The blacklist includes falsely stating that a product will be available for a very limited time in order to obtain an immediate decision.
The sales practices used by resorts and many timeshare sellers to persuade consumers to purchase timeshare include unfair commercial practices as set out above. Many of our Clients were given false information as to the benefits of owning a timeshare or Membership in a holiday club. They were also promised that the price that the product was being sold for is at discounted price which is only available on the day of the sales presentation and which requires an immediate decision. Therefore, in addition to operating unfair commercial practices resorts are also operating a blacklisted practice. Furthermore, during the sales process resorts make very significant omissions as to the true nature of owning a timeshare and/or holding of Membership in perpetuity or long term.
As a result of The Consumer Protection (Amendment) Regulations 2014, our Clients are entitled to a discount, depending on the seriousness of the unfair commercial practices, to a refund of anywhere between 25% and 100% of the purchase consideration. Further and in any event, our Clients are also entitled to damages to compensate them for the resorts breach of the regulations. If our Client is unable to unwind the transaction, they should, by way of a discount and/or damages, be put back in the position which they would be had the transaction never taken place. This would entail return of purchase consideration along with sufficient monies to purchase an annuity in order to fund annual maintenance fees. Our Client in some circumstances may be willing to mitigate their losses by accepting a cancellation of their timeshare interest.
Last modified: 24th March 2016