Your moral obligation to claim timeshare compensation

Timeshare resorts have been issuing illegal contracts for years, hoping that protective consumer legislation enacted in 1999 would never be enforced. They were wrong, and now they are paying a heavy price...

Why did they do it?

"Timeshare is an emotional sale," explains Alby West, senior contracts adviser at European Consumer Claims (ECC). "The salesperson beguiles you with luxury and assures you that you deserve it, while you are surrounded by blue sky, palm trees and gently crashing waves. In this environment you are likely to overestimate your ability to afford it and say yes because you feel good. It's the same when you ask your boss for a raise; you make sure he is in a good mood.

"The protective legislation outlawed the practise of taking a deposit on the day or during the mandated cooling off period, which is currently 14 days," continues West. "This extra time means people can get away from the seductive sales environment and assess their true financial position. In a more logical frame of mind they often realise they can't afford the purchase, which saves them from making a potentially life altering mistake.

"Timeshare companies deliberately ignored this rule and many others in order to make more money, at the expense of the consumer.

Compensation awards

"The timeshare companies believed they were insulated by the infamous Spanish bureaucracy," explains West. "For a foreigner it would be a herculean task to pursue a civil claim over an illegal contract through the court system, especially with specialist lawyers defending against it.

In a timely example of free market Darwinism, claims firms sprung up to handle the compensation claim process for wronged consumers. "This was the turning point for the timeshare business," says Alby West. "Not only would they have to start respecting the law and issue contracts accordingly, but years of illegal contracts are now under the microscope. Each one is a potential claim and combined they represent hundreds of millions of pounds worth of exposure for the timeshare industry.

Andrew Cooper, CEO of ECC, believes that the timeshare industry, already under pressure from a cataclysmic drop-off in new member sales, may not be able to survive. "People are just not buying timeshare anymore. It is dated and expensive compared to the modern holiday market. Resorts rely on inflated annual membership fees to keep them afloat. But every compensation claim is not only a huge cost from the award itself, it also means that the escaped member is no longer a source of fees. It's difficult to read the situation any other way than the beginning of the end for the timeshare barons."

Should you claim?

Cooper is adamant that claiming compensation is the right thing to do. Not just ethically, but for self preservation. "Many people feel guilty," he says. "They know their resort broke the law, but they ended up having some decent holidays and they don't want to be responsible for putting the company out of business.

"The reality is that these resorts cynically and relentlessly steamrolled consumers' rights in order to make obscene profits. Maybe you personally have recovered from the expense of buying your membership, but for many people the impact was ruinous.

"The only meaningful punishment is to take back the illegal profits, plus more besides. We must make disregarding consumer rights prohibitively expensive.

Andrew Cooper warns that time may also be running out. "Resorts are drowning in compensation claims and many industry leading companies have been forced into liquidation. Often there is little warning and members who have not already started a claim could find themselves left with nothing at all. No money and no membership. For most people who have illegal contracts, claiming compensation as soon as possible is the safest option. Most of these compensation awards are pretty significant: Usually upwards of £20,000."

Do your research

Cooper adds one final note of caution: "When investigating whether you are eligible to claim compensation, or even which firm should handle the process, be careful who you approach. The vast majority of firms promising to help or advise on this subject are actually fraudsters. They will take your money, but they will never pursue your compensation claim.

"Your best source of information is to ask other owners who have already claimed successfully for their advice.

"There are also volunteer consumer associations who will help you and a website, timesharetrust.co.uk which provides guidance on how to do your own research.

"Or you can get in touch with our team at ECC, for a free, confidential chat."