SUN-SEEKERS SECURE BETTER DEAL FROM SPANISH TIMESHARE CO

8 Apr 2005 11:15 AM

Following action by the OFT, Spanish timeshare company One World Holiday Club, has pledged to give British sun-seekers a better deal.

The company promotes a timeshare product called Club Atlantis on behalf of its parent company International Holiday Marketing Ltd as well as a software package providing discounted travel bookings and accommodation at the Miraflores Resort on the Costa del Sol. The OFT received numerous complaints that the company was selling the products unfairly by making misrepresentations such as:
* consumers would receive annual reimbursement for any unused entitlement
* consumers could sell the Club Atlantis product back to the company for the full purchase price at any time
* the annual fee would not increase without consent
* Club Atlantis products had to be purchased on the day of the presentation.

In addition consumers attending presentations for the Club Atlantis product were asked to sign documentation 'for Spanish tax and/or legal reasons' which effectively committed them to buying the Miraflores accommodation without their knowledge or understanding. If consumers attempted to cancel their Club Atlantis contract, their deposit would not be returned, as they were told that the deposit paid was in relation to the Miraflores accommodation contract which could not be cancelled - in effect denying consumers their cancellation rights.

International Holiday Marketing Limited, One World Holiday Club SL and director of both companies Paul Porter have signed undertakings that they will describe the products clearly and will not make misleading or inaccurate representations or use harassment, coercion or undue influence in marketing their products. They will also provide a seven-day cooling-off period for cancellations for products promoted by scratch card touts.

If the companies breach the undertakings the OFT could seek an injunction to enforce compliance with the relevant legislation.

NOTES
1. The Control of Misleading Advertisements Regulations (CMARs) 1988 came into force on 20 June 1988 implementing an EC Directive on misleading advertising. The role of the OFT under the regulations is mainly to support and reinforce the controls exercised by other bodies where they have been unable to take effective action. The OFT will step in only when these bodies have been unable to deal adequately with a complaint and where it is in the public interest that an advertisement is stopped by means of a court injunction.

The OFT can only act when a complaint has been received. To come within its scope an advertisement must be misleading (i.e. it must deceive or be likely to deceive the recipient and affect their economic behaviour, or for those reasons harm the interests of a competitor), and be published, in connection with a trade, business, craft or profession, in order to promote the supply or transfer of goods or services, immovable property, rights or obligations. The OFT can take action against anyone appearing to be concerned or likely to be concerned with the publication of a misleading advertisement.

'Advertisement' means any form of representations that is made in connection with a trade, business, craft or profession in order to promote the supply or transfer of goods or services, immovable property, right or obligations.

2. The Consumer Protection (Cancellation of Contracts concluded away from Business Premises) Regulations 1987, commonly-called Doorstep Selling Regulations (SI1987/2117) say that if consumers enter into a purchase contract for more than £35 during an unsolicited home visit, they are entitled to cancel that contract within seven days. The Spanish Doorstep selling provisions (Law No. 26/1991, 21 November 1991, Contracts Entered into outside Commercial Premises) also apply where negotiations take place outside the commercial establishment of the business, being entered into either by the business or a third party acting on its behalf.

The business should provide a cancellation form, although a letter from consumers to the business will also be a valid cancellation. If the business does not provide a cancellation form, then under English law it is committing a criminal offence and the agreement cannot be enforced. Certain kinds of contracts, for example, some insurance contracts, are excluded from this legislation. Different cancellation rights apply to credit agreements under the Consumer Credit Act 1974.

Some businesses which sell to consumers in their homes belong to trade associations which require their members to offer other cancellation rights.

3. The Injunctions Directive (EC/98/27) is a piece of European legislation allowing effective cross border action to protect UK consumers. Under the legislation certain consumer protection bodies, known as "Community Qualified Entities" (CQE), are empowered to apply to the courts or competent administrative authorities both in their own and in other Member States for orders to stop traders infringing the legislation implementing 10 specific consumer protection directives. For the order to be granted these infringements must be shown to harm the 'collective interests of consumers'.

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