DEPARTMENT OF TRADE
AND INDUSTRY News Release (P/2007/110) issued by The Government News
Network on 7 June 2007
The European
Commission today announced plans to crack down on bogus
"Holiday Club" scams which have hit tens of thousands of
British holidaymakers.
The Department of Trade and Industry has been pressing the
Commission to help stamp out rogue "holiday clubs" by
updating the 13 year old EU Timeshare Directive. The
Commission's plans incorporate proposals put forward by the
DTI, on behalf of the UK Government.
Many "Holiday Clubs" have adopted the sharp sales
practices that have been banned in the timeshare industry. Instead
of buying a week every year in a property, victims part with
thousands of pounds to buy membership of a club promising cheap
holidays for years ahead, which often turns out to be worthless.
Holiday clubs get around timeshare laws because holiday club
membership is not linked to any rights in any particular property,
so consumers are not protected.
The proposals include:
* A ban on Holiday Clubs taking money up front
* A 14 day cooling-off period
* Up front information setting out precisely what club membership
entitles a consumer to, and exactly who their contract is with.
This must all be included in their contract.
DTI Consumer Minister Ian McCartney welcomed the proposals and said:
"Since the mid-1990's we have had effective laws to
outlaw scams with Timeshares. Scammers have found a way to get
around the rules by selling a different product - holiday clubs.
"People are being conned into shelling out thousands of
pounds on what turn out to be empty promises. Unscrupulous holiday
club operators promise a lifetime of cheap holidays in exotic
locations - but deliver nothing. Victims not only lose their
holiday but also their hard-earned savings.
"Because these scams are on holidaymakers while they in a
foreign country, this is a problem that requires Europe-wide
action. We very much welcome this initiative from the new Consumer
Commissioner, Meglena Kuneva. We will keep working hard with the
Commission and the other member states to ensure that this
proposal is adopted.
"Until then, our advice is for consumers to be very wary of
holiday clubs. Don't sign up during a presentation,
don't part with any money or credit card details until you
have had time to think things over. If you are told this is a once
in a lifetime, never-to-be-repeated offer, don't believe it."
Holiday club membership can take the form of a right to buy, or a
promise to be offered discounted travel and accommodation which
might be via access to a website - offering a range of travel and
accommodation arrangements at a price which is probably achievable
through normal means any way via a normal travel agent or by
buying direct from the web.
Club membership costs up to £15,000. Buyers then find they have
no guarantee on dates or quality of accommodation, and they are
committed to paying an annual subscription fee even if they do not
take a holiday.
Often enticements such as "free" holidays or promises
of a win on a scratch-card are used by the marketers of these
products to get consumers to sales presentations. These initial
approaches can be either direct while the consumer is on holiday
or via telemarketing.
Notes for editors
1. For background on holiday club scams, see the Office of Fair
Trading [OFT] website:
http://www.oft.gov.uk/oft_at_work/consumer_initiatives/scams/bogus-holiday
2. The European Commission has published a proposal for a New
Directive on the Protection of Consumers in Respect of Certain
Aspects of Timeshare, Long-Term Holiday Products, Resale and
Exchange - building on and replacing the 1994 Timeshare Directive.
3. The OFT estimates that as many as 400,000 UK consumers have
lost an average £3,000 each to bogus holiday club scams.
Department of Trade and Industry
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1 Victoria Street
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Textphone +44 (0)20 7215
6740
(for those with hearing impairment)
http://www.dti.gov.uk