Timeshare compensation claims, from insolvent companies?

With timeshare companies collapsing like dominoes, the rush to claim compensation for illegal contracts has never been more urgent. For people who have invested tens of thousands of pounds in membership and hundreds (or more) a year in maintenance fees, claiming compensation is increasingly being seen as a way out of the membership without losing everything spent so far. But what if your club is facing insolvency, does that mean you can no longer claim?

The short version is that barring some exceptions, insolvencies often have little effect on timeshare claims

Timeshare insolvencies

Timeshare is outdated. It’s expensive, restrictive and unnecessary.

That’s not to say it was a bad choice for the millions of timeshare owners who bought in decades past. It was actually a very smart decision in many cases. Timeshare ownership allowed people to stay in exclusive resorts and guaranteed them 5 star standards wherever they travelled in the world. However the industry struggled to evolve at anything like the same pace as the rest of the travel business.

In 2021, without spending tens of thousands of pounds to join a club, anyone can stay in what used to be an ‘exclusive timeshare’ through booking.com or Expedia; and guaranteeing standards is easy with user review sites like TripAdvisor.

New member sales of timeshare have trickled to almost zero, meaning a massive revenue drop; companies are now relying heavily on raises in annual maintenance fees to generate income

At the same time, resorts have been hit with hundreds of millions of pounds in compensation awards to former members as punishment for wilfully ignoring consumer laws for over a decade.

These dual financial onslaughts have left even the biggest and most established timeshare companies in serious trouble, and many of them have been forced into administration and/or insolvency.

What does this mean for compensation claims?

There are two opposing narratives here:

  • The claims companies’ position is that they are continuing to make claims against those errant timeshare resorts undergoing insolvency, administration, receivership or liquidation. They are still doing consultations for people with illegal contracts, and continuing to lodge new compensation claims with the courts and/or administrators.
  • The timeshare companies’ counter-narrative is often that no new claims can be taken against them while they are in administration (or associated processes). Companies like Club La Costa are even contacting members by email to try and persuade them that compensation claims are now futile.

Both narratives can’t be right can they?

As usual with timeshare, there is no universal answer.

It’s true that in the case of a minor, independent timeshare resort, adding an extra claim to an existing insolvency may not always be a smart idea (pending advice from experts).

The finances of a small operation are often pretty transparent. If they are out of money then sure, adding new a new claim may not be worthwhile. You may find that the finite resources left to the company will only stretch to paying you pennies on the pound.

Big companies, tangled webs…

However, the reality is that the main culprits for ignoring consumer law, thereby exposing themselves to colossal amounts of compensation awards are the biggest names in the timeshare industry; names like ANFI and Club La Costa (CLC).

When a huge company goes into receivership, administration or liquidation there are often accusations of financial impropriety, and money being moved between entities in order to avoid paying the creditors. In these cases, the professionalism of the insolvency practitioners (IP) comes into play.

With the substantial sums of money involved (ANFI and CLC both have tens of millions of pounds awarded against them so far) the best IPs are retained and the money is hunted down.

Generally, any attempts to hide or move money out of reach only results in delaying the inevitable. If a big company has money but moved to other entities under its control, then the IP will ferret it out and the creditors will receive what they are due

Red herrings and fake news

Big timeshare companies are under siege. Years of cavalier disregard for the law has caught up with them, and the fiscal consequences are threatening to wipe them out of existence. They are fighting for their very lives.

People (and organisations — they are made up of people after all) in desperate situations do desperate things.

Recently Club la Costa has attracted ridicule for attempting to portray an unremarkable legal development as a “major victory” against the legal firms and claims management companies suing them on behalf of their victims.

The major victory being touted was that a mercantile court in Spain had ruled that future claims against Club La Costa would now be heard by UK courts instead of Spain, but the claims would still be heard.

By use of admirably creative wordplay, CLC managed to give the impression — both via their representatives, the Resort Development Organisation (RDO) and in a direct email to all of their members — that no further claims were being accepted against CLC at all.

The RDO wrote a brazen article on their website saying exactly this, using the phrase “all new claims made against Club La Costa (CLC) will be automatically rejected.”

Those CLC members who gave this article more than a passing glance could see that the RDO did admit that in fact the claims would still be heard in the UK courts, as the main administration is being held in Britain.

Many people took the article at face value and a panicked wave of timeshare claimants began calling the Timeshare Consumer Association (TCA), as well as all the top claims and legal firms. “What about my existing claim?” people wanted to know. “Can I still lodge a claim against CLC, or is it too late?” demanded others

Don’t panic. Nothing has changed

“Its a real shame that formerly respected timeshare industry leaders are resorting to such transparent and baseless scaremongering,” says Daniel Keating, Information Officer for the TCA. “It further erodes what little credibility many of them had left.

“The RDO is also showing it’s true colours by getting behind this fake news.

“The truth is that for the consumer making a claim against these big timeshare companies, little has changed. You should always seek advice before committing to a timeshare claim. Much will depend on your own exact ownership history, the current status of your resort, and which loan companies are involved.

“You can generally get a no-obligation consultation from the well reviewed, trustworthy claims companies. The good ones will not take your case on unless they believe it will win. It goes without saying that you need to avoid the scam companies out there. A little research goes a long way and there is a website called timesharetrust.co.uk which shows you what to look for in your research

“At the TCA we keep a whitelist of these companies and categorise them as Black List, Grey List and White List companies (you can guess which list is preferable). People can check these lists with us at any time.

“If you would rather speak directly to our staff members, we are available by phone or email during business hours and are always happy to talk your situation through and point you in the right direction.”

Timeshare Consumer Association. Contact us on: T: +44 2036704588 or +44 2035193808 (ask for Daniel), E: enquiries@timeshareadvice.org (Address to Daniel).

WhatsApp (message only) +447586871055

TCA provides a central resource of consumer information on timeshare matters for the media and other organisations — We work towards encouraging responsible, honest, timeshare operators. We also publicly expose negative consumer practices and organisations which operate in a manner detrimental to timeshare buyers and owners.

An important part of our mission is to lobby UK and European Governments and regulatory bodies for improved consumer protection in the timeshare environment and collect information on frauds and mis-selling, for action by enforcement authorities.

We are staffed by former and current timeshare owners, as well as former timeshare industry staff. We know our way around the timeshare business

Timeshare Consumer Association Newsdesk here

Timeshare Consumer Association on YouTube here

Timeshare Consumer Association on Facebook here

Timeshare Consumer Association on Medium here

Timeshare Consumer Association on LinkedIn here

Timeshare Consumer Association on Quora here

Timeshare Consumer Association website here

We are a proud member of the UK Small Charities Coalition

First published on MyNewsDesk August 2021



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Timeshare Consumer Association

Timeshare Consumer Association

Friendly, impartial advice from timeshare experts: owners, ex timeshare owners, even ex timeshare industry insiders