Timeshare-Contracts & Holiday Certificates
Are you dreaming about relaxing and unwinding for a few weeks in a holiday apartment on Gran Canaria which is available to you, whenever you want it? Then you better watch out that your dream does not turn into a nightmare.
Numerous consumers have already fallen into a mean rip-off trick from dubious timeshare providers. The approach is almost always the same: a scratch-card, an alleged "first prize", a taxi ride followed by a sales talk that may take several hours.
Our advice: Do not sign! Do not pay any deposit!
- Definition: What is Timesharing?
- What does the EU Timeshare Directive regulate?
- Short-term contracts (contract period up to 1 year)
- Frequently asked questions about short-term contracts
- Rip-off with scratch cards in Gran Canaria: "first prize", a taxi ride & a hotel tour
- Short-term contracts: can I terminate timeshare contracts?
- Dubious providers of holiday certificates
- Timesharing: long-term contracts (term of more than 1 year)
- Frequently asked questions about long-term contracts
- What are long-term holiday product contracts?
- How can I terminate a long-term vacation product contract?
- The resale contract
- Resale contract: Beware of dubious sellers
Definition: What is timesharing?
Timesharing means as much as having the right to use a property for a determined time. And this is exactly what these contracts are about: the use of a holiday apartment for a certain period of time.
A distinction is made between timeshare-like short-term contracts (contract period up to one year) and long-term contracts (contract period longer than one year).
What does the EU timeshare directive regulate?
To strengthen consumer rights, the European Union has adopted the EU Timeshare directive. It applies to timeshare contracts (e.g. holiday apartments) and long-term holiday products (e.g. club memberships) with a minimum contract period of more than one year as well as exchange contracts.
The directive was implemented in the respective national law. As an example: contracts signed in Gran Canaria are normally amenable to the Spanish law.
This is how the EU Timeshare directive protects you:
- Right to be informed about the content of the contract.
- Right of withdrawal for 14 days & prohibition of advance payment after conclusion of the contract / receipt of the contract.
- Right of termination for long-term holiday products, e.g. club memberships.
Short-term contracts (contract period up to 1 year)
Short-term contracts include timeshare-like products such as holiday certificates, holiday vouchers, accommodation reservations, VIP certificates and vouchers with or without a Holiday Plus membership. Consumers buy the right to use a holiday apartment for a certain period of time.
The contract period is often a year or less. In this case, the EU Timeshare Directive does not apply.
Especially when it comes to short-term contracts, there are some companies that use dubious methods to push consumers into signing contracts. Their methods are often perceived as fraudulent by consumers.
In Gran Canaria, consumers are urged to buy holiday vouchers, accommodation reservations or VIP certificates. The sellers are deceiving the consumers by claiming: "We do not sell timeshare, only holidays".
Frequently asked questions about short-term contracts
Acommodation can only be accessed on the internet after all rates have been paid. Before that, holidaymakers cannot see which hotels are available.
Many consumers have experienced that the desired accommodation was not available at all or not at the desired time.
It often happens that holiday vouchers cannot be activated. Those who wish to activate their accommodation voucher must in many cases undertake to participate once again in a sales event.
If the contract period is one year or less, consumers are not protected by the EU Timeshare Directive. This directive regulates, among other things, the right of withdrawal, the prohibition of advance payments and the pre-contractual information duties.
The vacation is not always overpriced, but not necessarily a bargain either. Let’s take a look at the calculation without the catering:
A package tour to Gran Canaria in August for one person costs around 695 euros per week, and includes the overnight stay in an apartment of a four star hotel, the flight and the transfer.
The vacation certificates are on average 1,250 euros per week for 4 people.
That would make 312 euros per week and person, without flight and without transfer. The flight is at 290 euros per person, the transfer costs 74 euros. Resulting in a total of 676 euros. So in the end, we have a price advantage of 19 euros for the holiday certificate.
The problem: Often, only three star accommodations can be booked; if booking is even possible at all. These three star accommodations are mostly already available for 556 euros per person and week including flight and transfer.
Rip-off with scratch cards in Gran Canaria: "first prize", a taxi ride & a hotel tour
The trick is always the same: holidaymakers are approached on the street in Gran Canaria, Puerto de Mogán or Playa del Inglés and given a scratch card. What a coincidence: the ticket is a win. It is a trip, a t-shirt or a smartphone.
In order to redeem the ticket and get the prize, the holiday-makers only have to take part in a “short” tour of a luxury hotel complex. The taxi to the hotel 30 kilometers away is already waiting.
As soon the holiday-makers arrive, they are involved in sales talks that last between three and seven hours. In the end, they often are persuaded or even urged to conclude a contract for a stay in a luxury apartment.
Do not pay a deposit
Many victims of this practice report that they were completely exhausted at the end of the sales talk and signed the contract out of desperation or fear. But once the signature has been given, things get serious: The providers require an advance payment of around 1,000 euros, sometimes they even demand the entire amount. This can be over 5,000 euros.
If the holidaymakers do not have the right means of payment at hand, it can happen that they are personally directed to the nearest ATM.
In some cases it has even happened that consumers have been separated from their partner: while one – accompanied by the employee of the accommodation provider – drives back to the hotel to get the appropriate means of payment, the other iis held on the spot. Then it’s time to pay: in cash, by EC or by credit card.
Short-term contracts: can I terminate timeshare contracts?
The answer is no. Timeshare contracts do not provide for any right of cancellation, termination, withdrawal or revocation.
Although the contract does not provide for any right of withdrawal, termination or cancellation, withdrawal may be possible on the basis of the Consumer Rights Directive.
The following sentence is sufficient to formulate the revocation: "I hereby revoke contract no. ... dated ..." The revocation must be received by the accommodation provider within 14 days after the signing of the contract. The dispatch should take place by email with a confirmation of transmission and a read receipt. This way, the holiday-maker is able to prove that the revocation was actually sent.
You should definitely try to get back the money you already paid. You have the best chance to get it back if you paid by credit card. Because then a payment complaint (a so-called chargeback) can be submitted to the credit card company or the bank. The facts must be described as precisely as possible and the term "timeshare" must explicitly be mentioned.
Attention: The deadlines within which the payment claim must be received by the credit card company or the bank differ.
If you paid cash or with an EC card with a PIN number, thinks do not look good. Usually, in this case the money is gone.
If you have agreed to a payment in instalments, no further instalments should be paid, even if the accommodation provider threatens legal consequences or debit collection. In the worst case, you will only lose your deposit.
But it is possible that your deposit can be recovered via the European Small Claims procedure. It is worth a try. However, the European Small Claims Procedure is subject to a charge in Spain. In addition, all documents must be submitted in Spanish, what may imply additional costs for you.
By the way: A prior revocation to the accommodation provider is also required for the European Small Claims procedure.
Dubious providers of holiday certificates
The names of the companies change frequently. So far, the following companies have been noticed with the practices explained above or with similar business practices:
- Anfi Vacation Club S. L.
- Anfi Dreams
- Direkt Travel Global S. L., kurz: DTGlobal SL
- Enduria Travel S. L. (inzwischen insolvent)
- Ferienexpert S. L.
- Liberty Holiday 2017 S. L.
- Vacon Marketing SLU
- Vacon Travel Service
- Viajes Vacon
Timesharing: long-term contracts (term of more than 1 year)
For part-time contracts with a term of more than one year, you pay a certain sum of money and acquire rights to use one or more overnight accommodations for more than one period of time. Due to the long contract period, the contracts fall under the EU Timeshare Directive.
Timeshare contracts can be concluded for holiday homes, apartments, hotel rooms, caravans, mobile homes or houseboats, but also for long-term holiday products (club memberships), exchange contracts and resale contracts.
Frequently asked questions about long-term contracts
When you sign a timeshare contract, you pay a one-off fixed amount for the use of the holiday accommodation. However, there are still annual operating and maintenance costs that you cannot foresee.
In addition, if construction measures are due in order to maintain the good rating of the holiday resort and to remain listed in the catalogue, the contractors often must contribute to the associated costs.
The cost of travel to and from the destination and meals are not included in the price. Package holidays, individual tours or last-minute tripsare often less expensive.
Long-term timeshare contracts are difficult or impossible to terminate. Here you need individual advice on what rights and options are available to you to get out of the contract.
The resale of a timeshare contract or a long-term vacation product is - if it is at all possible - linked to great financial losses. Such contracts are therefore not suitable as capital investments.
In principle, it is the law chosen by the involved parties that applies. If the provider is based in Spain, he can, for example, choose Spanish law. In the event of disputes, it will then be more complicated to enforce the claims that would apply under German law.
No. As a contractor, you are not protected against a possible insolvency of the provider of your timeshare contract, your holiday club membership or your discount club membership.
What are long-term holiday product contracts?
Long-term holiday product contracts have a contract period of more than one year and are therefore covered by the EU Timeshare Directive. After having concluded such a contract, consumers pay a certain sum and are entitled to discounts or other benefits for their accommodation.
You’ll become a member of a holiday or discount club and as a club member you can get your accommodation at lower prices.
If you always want to stay with the same provider, you could think about such a contract. However, you should, in advance, take a close look at the terms of the contract. Sometimes it may occur that the discounted overnight stay can only be used if breakfast or dinner is taken in the holiday complex. These meals then have to be paid on top. In this case it is a pure calculation whether such a contract is worthwhile or not.
How can I terminate a long-term vacation product contract?
If the contract for long-term vacation products does not include a right of termination, you can still try to terminate it on the basis of the EU timeshare directive.
The following applies here: In the case of contracts for long-term holiday products with annual payments by instalment (for example holiday club memberships) you have – after paying the second instalment – the right to terminate the contract within two weeks after receiving the request to pay the next instalment.
The resale contract
Resale contracts are concluded between a consumer and a trader. Due to the contract period of more than one year, such contracts are covered by the EU Timeshare Directive. Against payment of a certain amount of money, you – as the owner of a resale contract – will be supported by the trader to buy or sell a timeshare right or a long-term holiday product.
Resale contract: Beware of dubious sellers
Unfortunately, in this field you’ll find many black sheep who use resale for their own purposes. Since there is hardly any market for “used” timeshare rights or “used” long-term holiday products, consumers often register with sales exchanges on the Internet or they advertise in daily newspapers. This often brings dubious providers on the scene.
The tricks of the dubious companies
- Consumers are led to believe by supposedly reputable traders that there are interested parties who want to take over their contract. However, they are told that they will have to make back taxes or other payments before the sale.
- The sale is allegedly handled by a trustee, into whose account the customer hast to transfer a processing fee. Only after the receipt of the fee the purchase price will be transferred to the escrow account.
- Purportedly reputable notaries aim to handle the resale of the contract. And they’ll do so against payment of a fee.
- Consumers will receive a mail who was allegedly sent by the public prosecutor. The letter asks them to make payments related to the timeshare company's bankruptcy.
- The consumers are asked to make payments of tax arrears by alleged government employees. The letterhead looks as if it actually comes from an authority.
- Consumers receive mail at their home address. They are lured to the holiday destination. Reason: The contract is easier to sell on locally. Usually, however, consumers return back home with additional contracts instead of having sold the existing one.
Caution is advised as soon as you are asked to make advance payments. Once you have paid the money, it is lost without ever having received anything in return!
In order to submit a complaint against an RDO member company (Resort Development Organisation = Timeshare umbrella organization), consumers can fill out the RDO Complaint Registration form and send it to the email address: email@example.com. The list of members was published on the RDO website.
Prerequisite: Consumers must be able to prove that they tried to solve the problem with the member company on their own.
Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Innovation Council and Small and Medium-sized Enterprises Executive Agency (EISMEA). Neither the European Union nor the granting authority can be held responsible for them.
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