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‘The holiday that left us £52,000 in debt and ruined our retirement’

timeshare
timeshare

Thousands of people who were mis-sold timeshares more than a decade ago fear they may never get their money back, leaving investors up to £50,000 out of pocket.

An estimated half a million Britons invested in timeshare schemes in the last 30 years, paying £1,000 a year for access to a holiday home.

However, a High Court judge ruled last year that lenders had breached consumer rules by not informing investors of the risks and ordered banks to pay up. Thousands remain out of pocket nine months later as banks blame “complex” cases for delays.

Timeshare investors paid an average lump sum of £20,000 in exchange for the right to stay in a holiday home for a set number of days each year, according to the Timeshare Consumer Association (TCA). They also had the option to part-own a property in what was known as fractional timeshare schemes.

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Timeshares were very popular in the 90s and early 2000s. However, they fell out of favour as the sector became synonymous with aggressive sales techniques.

Many buyers ended up taking out unsecured loans with banks to meet the upfront cost. These had far higher rates than typical loans such as mortgages, averaging at around 9pc to 10pc.

The purchaser also paid an estimated £1,000 annual maintenance fee on the share, which increased by 5pc each year. This meant someone who invested £20,000 faced paying as much as £53,682 over 15 years.

In the past decade, thousands of timeshare investors have complained to the Financial Ombudsman Service over high fees, expensive loans and the inability to book holidays at the properties.

Last year, the High Court found that two lenders – Shawbrook and Barclays Partner Finance (formerly Clydesdale Financial Services) – had breached consumer protection rules because investors did not fully understand the risks they were taking.

As many as 25,000 people were estimated to be affected.

The ruling opened the door to banks refunding timeshare victims, with Shawbrook estimating it could pay out £11.4m in compensation.

‘Ruined our retirement’

Michael Hardstaffe, 83, from Evesham, Worcestershire and his wife
Michael Hardstaffe found that he was unable to book a holiday in the timeshare he had signed up to for the entire first year

There are an estimated half a million timeshare owners in the UK, according to a parliamentary research paper. Around half of them have timeshares in Spain.

Michael Hardstaffe, 83, from Evesham, Worcestershire, has spent years fighting for £52,000 in compensation after Barclays Partner Finance and Shawbrook Bank provided him with loans for timeshares in the early 2010s.

He says it has ruined his retirement.

Mr Hardstaffe and his wife bought a fractional contract in April 2012 for £12,750 under a loan agreement of £18,394 from Barclays Partner Finance, then Clydesdale Financial Services.

He then purchased additional points at a total cost of £16,763 between 2013 and 2014. This was via loan agreements with Shawbrook Bank totalling £33,573.

With the points, the couple were told they could book future holidays – but there is no timeframe in which they must do this.

“We took out the loans thinking we’d secured holidays for 15 years,” he said. “But in the very first year there was no availability at the properties we wanted.”

Many timeshare companies operate a points-based system where the person buys points in exchange for a certain number of weeks in the property over a period of years.

“I bought this ten years ago when I was fit and healthy. It’s a long time to wait for things to be put right,” Mr Hardstaffe said.

“The problem is, after eight years, what we were planning to do with our retirement has changed.”

Keith Dewhurst, of the TCA, says the most common complaint the group receives about timeshares is that it is almost impossible for the person who bought them to actually holiday in the property.

Sellers can find themselves paying an annual fee only to be told there is “no availability” at the property that year.

Mr Dewhurst says this is because the companies will allow thousands of people to buy the points and book up the homes.

“If it was sold as an investment and there is evidence of that, then the banks should refund them,” he said.

Yet despite this, many victims are still without compensation.

The High Court judgment last year concluded that banks should refund customers on a case-by-case basis – meaning some may never get a penny back.

The Financial Ombudsman Service (FOS) said the judgment had enabled it to resolve more than 800 cases, of which 39pc had been upheld. It has also issued 1,700 “provisional assessments” since the judgment – the first stage of an investigation after a complaint.

Barclays blamed the delays on “complex cases”. A spokesman said: “We are sorry for the delay in resolving these complaints, which are taking longer to process than anticipated due to their complexity,” a statement said.

“Some cases, including this one, involve multiple timeshare contracts, each of which require information from the timeshare retailer to calculate the redress due. Any customers who are concerned about an outstanding case should contact us directly.”

A Shawbrook spokesman said it is working closely with the Financial Ombudsman to resolve Mr and Mrs Hardstaffe’s case. It could not provide a resolution deadline.

“We are sorry that Mr and Mrs Hardstaffe are still waiting for their complaint to be resolved,” a spokesman said.

“The High Court, in its 2023 Judicial Review, determined that each complaint of this nature should be assessed individually. Not all customers who complain will be due compensation.

“Mr and Mrs Hardstaffe’s case is currently being assessed by the FOS. We’re working closely with FOS to resolve any outstanding complaints as quickly as possible and to make redress offers where due.”

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