The timeshare industry comprises of a variety of resorts located within and across a number of jurisdictions. The timeshare properties are held by a small number of security trusts including (but not limited to) Barclays International Trust, First National Trust Company, Continental Trust and Hutchinson’s Trust (“the Trustees”). It is commonplace for the Trustees to also sit as directors of the Resort Development Organisation (“RDO”). In addition to the Trustees, other individuals who either own or have an interest in major timeshare resorts and/or timeshare companies (for example Silverpoint, RCI and Diamond Resorts) also hold directorships in RDO. To complete the tale, other directors of RDO are associated with the re-sellers of timeshare products has been formed to protect the interests of those that own and, or, have a substantial financial interest in the industry.Those interests are in conflict with the consumers in the sense that the industry exists to make a profit, and that profit can only exist if monies are obtained from consumers.

The Industry has, through RDO, taken over the unincorporated association which controls the committees, and which ultimately appoints contractors and resort managers who maintain and develop the resorts. The unincorporated association changed its name to TATOC approx 14 years ago and that enterprise now mainly consists of ex-directors of Diamond Resorts.

Each major player within the timeshare industry is therefore either a member of RDO or TATOC or both organisations. Each minor enterprise operating in the timeshare industry has to join one of these institutions or else they are deemed by the major players to be an illegitimate company and, by the lack of association with them they ware the untrustworthy badge and that statue is inferred to the timeshare public.

The re-selling of timeshare is controlled. At present that sector of the industry has already crashed, whereby there is no resale value for the product the consumer has purchased.

Under the timeshare directive, it has been made a criminal offence for consumers to be charged a consideration (money) up front for any re-selling service. As all the resellers are affiliated to TATOC/RDO they may be in receipt protection if they are performing the practice of receiving a consideration. Consideration includes the practice of charging fees for advertising timeshare products, albeit often dressed up as “administration” or “marketing expenses”. This could involve millions of pounds each year which consumers cannot recover without incurring significant legal proceedings.

TATOC/RDO members have created an integrated web of companies, organisations and websites including but not limited to the Timeshare Task Force and the Spanish equivalent Mindtimeshare. These operations have made representations to such government departments like action fraud. Wearing the hat of legitimacy and in the event, any adverse consumer driven allegations are made to action fraud, the Timeshare Task Force for may be sweetening the allegations. In other words, the criminal justice system may be taking advice from organisations set up, funded and controlled by RDO.

The Timeshare Task Force is headed up by Kwick Chex. That organisation purports to be domiciled in the UK and claims to be a suitable vehicle to investigate and bring to justice fraudsters, even though its owner resides in mainland Spain, has 26 company failures at the back of him, and is palpably unqualified for the role.

The industry has a sub terrarium element that carries out the recycling of timeshare products in the form of Holiday Clubs. These holiday clubs have a structured point system which is entirely unregulated and those point systems have no underlying infantry. In short, if 1000 points buy you one weeks holiday they have 5 weeks holiday yet sell 50,000 points when consumers try to book holidays they are generally not available, yet those consumers have to pay maintenance fees for holidays that don’t exist. The main companies dealing in points systems have representation at TATOC/RDO.

As most timeshare is located within the jurisdiction of Spain, any and all issues which come to light from that jurisdiction are quickly dealt with by Mindtimeshare headed by Albert Garcia. In respect to Spain, the land registry department had a requirement that the use of the land had to be declared in the form of “A Deed of Adaptation”. These deeds were prepared (in the main) by the FNTC and most resorts made a declaration that they were fixed week resorts. Many resorts were and still are in breach of the deed of Adaptation, as they are multi-layered resorts. It is a real possibility that this could be exposed, many resorts have been clearing out the fixed week ownership, and transferring consumers to a points-based system, notwithstanding that such changes amount to a repudiatory breach of the original purchase agreements and the underlying trust deeds.

At present Silverpoint, Resort Solutions, Macdonald Resorts, Lion Resorts and others have persuaded the TATOC educated committees to vary the underlying constitutional arrangements of the unincorporated associations which govern resort clubs so that the underlying assets of the consumers are taken from them and given back to the very resorts that sold it to them in the first place and who are members of TATOC/RDO.

To give effect to their hidden agenda the RDO companies take advantage of an undemocratic voting system embedded within the constitution of each Club. The founding member’s take advantage of weighted voting rights to ensure that their wishes are implemented even if it is against the wishes of the consumers and contrary to the principal objects of the Clubs.

The Problem

The problem, in short, is that RDO and its members (which reflect less than 7 percent of the Timeshare resorts in Europe). They hold themselves out to be the legitimate industry and berate anybody who is either not a member, or does not wish to become, a member. In the UK they entirely control the resale market and represent the entire industry with respect to consultation on EU and UK government matters. The Citizen Advise Bureau signpost any and all consumer complaints to TATOC/RDO The TCA has made representations to the Citizen Advice about the quality of the advice given and been advised that as these two institutions are recommended by the Competition and Marketing Authority they cannot signpost anywhere else.

Therefore, if a consumer believes he has been wronged they are signposted to the very people who have wronged them. If the consumer believes they have been defrauded and make contact with Action Fraud they are referred to the Timeshare Task Force (TTF), who claims to advise them in the process. TTF is financed by TATOC/RDO. If the consumer complains to their MP, the MP refers them to the Citizens Advice who in turn refers them back to the industry. In our opinion, this is an obvious and dangerous conflict of interest.

Present Litigation

Despite this merry go round, some consumers have decided to join together and litigate matters.

At present, a 10,000 strong litigation has been levelled at RCI and that case is being headed by Edwin Co.

MacDonald’s Resorts have land grabbed nearly 12,000 fixed weeks in timeshare. This unjust enrichment has been supported by TATOC and declared groundbreaking. If the consumers do not join the MRL point system they are sent a bill which amounts to a liability of £2,000 per week that they own. If they do not pay that bill MRL instructs debt collectors to pursue consumers many of which are over 65.

Over 200 people are suing Club La Costa for the mis-selling of timeshare products.

Shakespeare Classic lines have now been engaged for a second time as hundreds of consumers are pursuing compensation.

The existence of widespread litigation, including class actions (which are rare in the UK), are never advertised by any industry institution, organisation or website. When consumers seek advice from the industry they are dissuaded from joining.

TATOC/RDO never tells consumers this litigation exists. The above list is a small amount of litigation which does exist at present.

Industry Exits

If a consumer wants to exit their timeshare they are advised to speak to the resort, the resorts then sell off their details to purported Para-legal companies headed by ex-timeshare salesmen, who then cold call consumers so as to obtain money. The consumers desperately pay those purported exit companies who in truth are not qualified. If their exit strategies fail, the consumer could be left holding the bill, still owning the timeshare (they wanted to be rid off) and facing debt collectors for the maintenance fees they did not pay.

In Death

The contracts purport to contain perpetuity clauses whereby the unincorporated associations which levy the maintenance fees contain clauses in them that if a consumer dies the membership passes to the beneficiaries who are bound to the same constitution and forever.

Conclusion

This is a very short appraisal of how this industry operates and continues to operate.

Then the consumers are signposted to some in the industry, they are sold a dream (which never arrives) and if and when they wish to leave they are tortured, robbed, scammed and harassed.

And all under the eyes of the UK authorities.

 


Posted on: 3rd May 2015