EU agrees to crack down on bogus holiday club deals

DEPARTMENT FOR BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (2008/317) issued by COI News Distribution Service. 19 December 2008

Consumer Minister Gareth Thomas has welcomed yesterday's EU decision to toughen up rules around timeshare and to regulate other long term holiday products across the EU for the first time, boosting holidaymakers' rights when things go wrong.

The EU Council of Ministers yesterday adopted the new Timeshare Directive, following a review of the existing version. The UK Government had strongly lobbied to extend its provisions to cover holiday clubs, and to provide better protection for timeshare owners, particularly those who fall prey to bogus timeshare resale agents.

Gareth Thomas said: "This is good news for British holidaymakers because it will ensure equal protection across Europe against bogus and rogue sellers of holiday clubs who in recent years have given the whole industry a bad name.

"The new Directive addresses the UK's concerns with the long-term holiday product sector and sets rules within which genuine, honest traders can operate without facing unfair competition from the rogues."

The Office of Fair Trading estimated that in 2006 detriment for UK based consumers alone, deceived into buying long-term holiday club membership, amounted to over £1 billion.

The new Directive will:

* Regulate holiday club sales for the first time by preventing large payments up front for long contracts and allowing consumers who are dissatisfied with the service they receive the option of ending the contract each year when annual payments become due.

* Provide a cooling off period for buyers and require the provision of fuller and clearer information in respect of all of the products covered

* Ban up-front payments before the end of the cooling off period.

* Ban accepting payment for timeshare resale services before a sale has taken place.

BERR will be consulting in 2009 on regulations to implement the Directive

Notes to Editors

The EU review of Directive 94/47/EC followed lobbying by the UK government to extend its provisions to cover long-term holiday products (holiday clubs), and to provide better protection for timeshare owners, particularly those who fall prey to bogus timeshare resale agents.

The agreed text builds on and extends the current Directive by covering a wider range of timeshare agreements, timeshare-related services and other long-term holiday product contracts.

Member States have two years following publication in the Official Journal to implement in national law. Publication is expected in January 2009 following adoption by the Council of Ministers yesterday.