EC prepares to act on timeshare scams

Standardisation of ‘cooling off’ periods and extension of the scope of consumer protection were among possible changes to the Timeshare Directive under discussion at a workshop held by the EC’s Health and Consumer Protection Directorate-General last week.

Its ideas for changes designed to combat ‘timeshare-like scams’ have been published for consultation as part of a review of eight consumer protection directives.

’Consumers should have every confidence that they will not be taken for a ride if they opt for a timeshare formula or similar products’, said Health and Consumer Protection Commissioner Markos Kyprianou. ‘I want to make sure that unscrupulous traders do not take advantage of potential clients – many of whom sign up to these products after falling in love with a holiday resort’.

After strong growth in the 1970s and 1980s, the European timeshare market slowed the early 1990s with the growth in sales halving from approximately 30 per cent to 15 per cent. Since 1996 the rate of increase has dropped further and now stands at less than 5 per cent - in strong contrast to the rest of the world and in particular the 10 new EU member states and eastern Europe, the USA, north Africa, South Africa, the Middle and Far East, and Mexico, according to the EC.

European timeshare industry sales were an estimated £1.6bn in 2001, with £1.3bn being spent on new timeshare and £280m on resale timeshares. About 217,000 households acquired about 260,000 timeshare weeks, or the equivalent in points. Latest figures suggest 80,000 timeshare transactions were completed in 2005.

The EC said it receives regular complaints about timeshare, timeshare-like products and travel discount clubs. Most come from UK citizens, although it says information from other sources shows that citizens from other Member States are also significantly affected: in particular those from Germany, Sweden, Finland and, to a lesser extent, France and Italy.

Most consumer complaints relate to timeshare-like products, travel clubs and other new products developed since the Timeshare Directive was introduced, said the EC.

In reviewing current timeshare laws ‘the Commission’s key goals remain to enhance consumer and business confidence in the internal market through a high common level of consumer protection, the elimination of internal market barriers and regulatory simplification through the application of the principles of better regulation’, it said. ‘In this area this could be achieved by undertaking measures with the aim of:
• Extending the protection that consumers enjoy when purchasing classic timeshare products to the timeshare-like products and travel discount clubs;
• Ensuring appropriate protection of consumers entering into resale contracts and exchange systems;
• Harmonizing fully the consumer protection provisions throughout the EU (right of withdrawal, administration and management systems etc) where appropriate;
• Ensuring effective enforcement;
• Enabling consumers to make informed choices; and
• Enabling legitimate timeshare businesses to flourish across the EU and protect them from unfair competition’.

...this is a good move forward in protecting the consumer against timeshare scams

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