Timeshare Contracts & Vacation Certificates

Spending a few weeks in a holiday apartment in Gran Canaria, Tenerife or Madeira. Maybe every year in the same place and at the same time. Timeshare contracts or holiday vouchers are supposed to make this possible. For many holidaymakers, however, this dream is sometimes turning into a nightmare.

For years, people have been contacting the European Consumer Centre Germany because they regret buying holiday vouchers or want to get out of a long-term contract. The hurdles are high and the money paid is often lost.

Timeshare is the right to use a holiday home for a certain time of the year. Be aware that you are only buying the right to use the property, not the property itself.

Holiday vouchers are not a classic form of timeshare contract. The main difference is the duration of the contract. Only if the contract is for more than 1 year is it legally called timeshare.  

Short-term contracts include holiday vouchers, holiday certificates, accommodation bookings and VIP certificates. These contracts usually allow holidaymakers to spend one or two weeks in a holiday home within 11 months.

This is a well-known scam. Holidaymakers are approached on the street in Gran Canaria (Puerto de Mogán or Playa del Inglés) and asked to draw lots or to take scratch cards. As luck would have it, they win. To claim the prize, the holidaymakers simply have to take part in a 'short' tour through a luxury hotel complex. A taxi is waiting to take them to the hotel, which is 30 kilometres away.

Once there, they are persuaded, often even pressured, to sign a contract for staying in a luxury apartment. The sales talks usually last several hours.

Sometimes the scam changes. But they share all one thing in common:

• A guided tour of an exclusive hotel complex or a visit to a special beach.
• The so-called 'once-in-a-lifetime opportunity' or 'special offer'.
• During the contract negotiations the pressure is on.

Once you are in the sales pitch it is hard to get out. Most of the timeshare companies use methods that many holidaymakers perceive as 'scams'.

Some victims also report that they have signed the contract only to walk away because they were already exhausted.

Timeshare providers usually require an immediate deposit of around 1,000 Euros, sometimes the full amount. This can be 5,000 Euros or more. If the holidaymakers do not have the required means of payment, they may be directed to a cash machine in person. The remainder has to be paid later in instalments.

The victims are unilaterally disadvantaged by the general terms and conditions of these kind of contracts. In particular, there is no possibility of cancellation, withdrawal or revocation.

Although many of the victims rightly believe that they are not bound by the transaction because of the uncomfortable feeling they have after having signed the contract, many of them do not declare their withdrawal - because the contract excludes it.

Those who withdraw from the contract are confronted with new methods, such as shortening the duration of the holiday and waiving further instalments. This is how the company tries to keep the holidaymaker. Withdrawels are also almost never accepted.

When it comes to holiday vouchers and short-term contracts, prevention is better than cure: Do not get into a taxi. Get up and leave leave when you are supposed to pay the deposit. If you get caught up due to the holiday spirit, you are likely to lose money.

In general, if a consumer is treated in this way, it is questionable whether there is a contract at all. Unfortunately, it is not easy to prove this. The European Consumer Centre Germany has received a number of timeshare complaints where people were made to sign on the spot that they had been properly advised. Furthermore, contracts are becoming more sophisticated.

Nevertheless, we assume that there is a right of withdrawal. The reason for this is that people are approached in the street and asked to sign the contract, outside closed business premises. This method is known as "doorstep selling". This is no travel service for which the right of withdrawal is excluded There is no booking made, only personal data are given for further confirmation.

A simple sentence is enough to write the withdrawal: 'I hereby cancel the contract no. ... dated ...'. The withdrawal can be sent by e-mail with confirmation of delivery and read receipt. However, being right and getting it right are two different things: you must expect that the company will refer to the text of the contract and reject the withdrawal.

The names of timeshare companies change frequently. To date, the following companies have been identified as using the above or similar practices:

• Anfi
• Canaria Travel International S. L. U.
• Atlantic Travel Service S. L. U.

The EU Timeshare Directive applies in the European Union to strengthen consumer rights. It regulates timeshare contracts (e. g. for holiday homes) and long-term holiday products (e. g. holiday club memberships) with a minimum contract period of more than one year, as well as exchange contracts.

Directives always have to be transposed into national law first, which then forms the legal basis. It is only directly applicable if no corresponding national law exists. In the case of timeshare in Gran Canaria, this would generally be Spanish law.

If you purchase a long-term timeshare contract, you receive the right to live in a fully furnished holiday flat every year for a certain period of time. The duration of the contract is more than one year. These contracts are subject to the EU Timeshare Directive.

If you want to buy a timeshare you have to pay between 5,000 and 25,000 euros. 

In addition to the purchase price you  will have to pay the annual management and maintenance fees. This can range from 500 to over 1,000 euros. You must bear the costs, even if you spend your holiday elsewhere or stay at home. 

If building work is required to maintain the resort's good rating, you will often have to contribute to the cost.

And if you have an exchange contract, you will have to pay exchange fees.

Even if the salesman promises the moon, the disadvantages of a timeshare contract cannot be ignored.

• A timeshare is not a financial investment because you cannot sell it at a profit.
• Being the owner of the contract, you are not protected against the insolvency of the timeshare company, the holiday club or the discount club operator.
• You also bear the location risk. What may have been a quiet place has become a party mile. But you still own your timeshare there.
• You have no rights in the event of defects. The travel or rental laws that apply to other trips, e. g. to package holidays, holiday homes or hotel accomodation, do not apply to timeshare contracts.

If you want to stay with the same provider for a long time and are prepared to bear the additional costs and risks each year, you may consider taking out a timeshare contract. However, prior to signing a timeshare contract, you should read the terms and conditions carefully, especially as timeshare contracts are often written in a confusing and complicated way.

There is usually no cancellation option in a timeshare contract. You own the contract forever and your heirs may even be liable for the costs after your death.

A withdrawl is only possible within the first 14 days, as the timeshare contract provides all buyers with the right to withdraw from the contract. There is even a ban on advance payments during this withdrawal period. 

But even if the withdrawal is excluded, it is still worth looking at the contract carefully. This is because a timeshare contract must contain specific and concrete details, such as an exact and authorised duration, the exact weeks of use, the seller and so on. If these details are missing, you have a good chance that the contract will be terminated, sometimes even with compensation. However, be prepared to go to court. There is usually no money to be recovered out of court, even if there are providers who are co-operative and willing to terminate the contract.

As there is no market for 'second-hand' timeshare contracts, the owner of such contracts often register themselves on online sales platforms or advertise in daily newspapers. This often brings dubious operators onto the scene.

The tricks are similar. Whether the victim should believe that there has been a court case with a favourable outcome or that there is a prospective buyer, the victims are always contacted unsolicited (so-called 'cold calling') and asked to pay fees or additional payments for purposes that do not exist.

It is not always obvious that it is a scam. Callers often present themselves as official representatives of trustworthy organisations showing business documents that are not immediately recognisable as fake. However, it is helpful to consider the following: How do these companies get my personal data? Anyone who contacts you without asking in advance is dubious. 

Victims of cold calling should always seek advice and never pay anything. Once the first sum has been paid, the next bill will follow soon. This can quickly add up to many thousands of euros lost without ever receiving anything in return.