Extra protection against timeshare fraud on the way?

New rules may force banks to refund fraud victims who did NOT pay by credit card

A Daily Mail UK newspaper report dated 22 February 2021 has revealed extra protections planned for consumers who fall victim to fraud.

Timeshare owners have been disproportionately targeted by criminals offering to help with compensation claims or relinquishments.  Unlucky victims often pay tens of thousands of pounds but get nothing in return

Up until now there has been very little protection given by the banks, unless the transaction was made by credit card.  

New regulations

The proposed regulations could bring hope to future victims as the Payment Systems Regulator (PSR) outline plans for banks to take more responsibility for money stolen by fraudulent companies.  

This would cover payments made by Faster Payments and online transfers in a similar way to how credit card payments are protected today.

A voluntary code of practise introduced in 2019 has only been effective in achieving refunds in 43% of cases where innocent victims lost money through scams but paid by these two methods

PSR aim to make the code mandatory, which would force the banks involved to scrutinise businesses using their platforms.  This means that in the future all electronic transactions should be refundable when an innocent victim is defrauded.

PSR has requested feedback by April 8th 2021 and many of the main banks have indicated a willingness to implement the proposals.

Steven warner, head of timeshare contract investigations at European Consumer Claims (ECC) comments: "It's obvious that current protections for bank transfer scams are insufficient.  Fraudulent timeshare law firms will usually push clients into paying by transfer instead of credit card to negate the chance of a refund being given.  Clients paying by transfer unfortunately have no recourse today."

Pay by credit card

"For now, the safest way to pay is still by credit card because of the protections guaranteed by the 1974 Consumer Credit Act," explains Daniel Keating, information officer for the Timeshare Consumer Association (TCA).  "You should be wary of any organisation who doesn't offer this payment option.

"Ideally, before you give any money to a company offering to get you a compensation payment or relinquishment from your timeshare, you should check them out with an independent authority.

"There is a very useful website called timesharetrust.co.uk which provides the resources you need to do your own research.

"And of course you are welcome to get in touch with us at the TCA for free, expert, independent advice on the contact details below."