Over the past 5 years ITRA has with the support of its members and sponsors invested in seeking financial restitution on behalf of timeshare owners, past and present who maintain and believe that they have been fraudulently misrepresented by various organisations in respect of the purchase and ongoing use of their timeshare so as to render it virtually valueless and untenable.
ITRA are now pursuing the coordination of a claim to the courts on behalf of timeshare owners who can justify due cause for full compensation, distress and damages on the grounds that their timeshare purchase was not of merchandisable quality.
Having realised the extent of the problems faced by timeshare owners, in June 2007 ITRA arranged a meeting with Counsel to discuss the merits of forming group litigation order (GLO) against the parties who have deemed to mislead and cause distress to timeshare owners.
Having studied the findings of our preliminary investigations, Counsels opinion was that the case had merit and that further enquiries should be pursued.
The report has established that there are a number of reoccurring themes shared by distressed timeshare owners which are listed below
In light of this confidence, ITRA appointed a specialist law firm to conduct further investigation and pursue the GLO on their belief that their costs would be covered by winning a compensation claim, on a fully insured and funded No Win – No Fee basis.
ITRA IS ASSESSING POTENTIAL CLAIMS FOR...
Problems with obtaining a selected balanced exchange from exchange companies
The worldwide exchange system offered by the exchange company that was associated with the developer in the original presentation and sales agreement was the client’s principal reason for purchasing.
There were strong allegations and evidence that the exchange company unlawfully utilised the weeks in the inventory bank for their own benefit, thus reducing the availability of prime inventory to its members.
Year on year escalating maintenance fees (way above that of inflation)
A secondary factor for the client purchasing from the developer or his agent, was the superior quality of the resort and the economics of the realistic annual maintenance fee charged. It was the understanding of the purchaser that annual management fees would only rise in line with inflation.
In the majority of resorts, management fees have been unjustifiably hiked to many times the cost of inflation to a point where there has become a clear breach of contract.
Exorbitantly high interest rates charged by finance companies introduced by marketers.
Historically, actual interest rates were usually hidden from the purchaser but were around 28% (roughly four times greater than a conventional bank loan) It would appear that since new finance legislation was introduced three years ago, the main current lender to timeshare and Points purchasers dropped their rates to 18.9%. Still exorbitant and most of the owners we have interviewed cannot recall the interest rate they were charged.
Problems with the disposal and transfer of weeks and points.
A number of developers were pursuing a course they called “depopulation”. This was a scam operated by certain developers during the height of the escalating property/market prices whereby it benefited the developer to the detriment of the member, and was one of the main factors that contributed to the decline of the resale market.
Developers put barriers in front of owners who wished to resell their timeshare; they raised management fees and reduced resort quality and service. Some resorts introduced transfer fees of as much as £1500 to change ownership title deeds or documents. This action created an almost impossible situation for the owners and resale agents who were often contracted to sell.
Thousands of owners were being put into a situation where they refused to pay maintenance fees and the resorts then repossessed the unit free. This was the game plan because with every 52 weeks possessed at no cost they had clear title to sell the freehold unit for many thousands of pounds.
Depopulation was also the reason for the almost enforced conversion of week’s owners to points by some developers. When developers converted owners to points they got the best of both worlds; The developers got their “bricks and mortar” stock back to resell as real estate and in exchange the owners received “points” which were backed by cheaper units often located in east Asia. In addition the owner often had to pay for the “privilege” of the exchange and became levied with even higher management fee charges!
UPDATE 2009 – Since the downturn in overseas property sales, resort developers have now suspended this tactic in favor of the more lucrative one of forcing maintenance fees from owners whether they wish to continue using their timeshare or not, with many resorts there is no escape and in some cases even dying is not an option with the liability seen to be passed to owners heirs. We have even seen evidence of resorts sending claims from collection agents for outstanding maintenance fees for weeks that have already been repossessed.
All resorts have different constitutions so it is necessary to study each one to ascertain whether or not there has been any breach of agreement or indeed fraudulent issue.
Participation of Trustees
Finally, there is the issue of the trustees who hold the inventory to the owners order. Further investigation may disclose, that it would not have been possible for all these activities to have perpetuated without their knowledge and participation. This is an issue that will be answered in time.
The first legal action that we have instigated is open to all timeshare and points owners who are or were RCI Europe members and who have been dissatisfied with the exchange promises that were made at point of sale.
Do you Qualify to Claim?
If you believe that any of the issues included mentioned above apply to you, please do not hesitate to contact us. click here