Latest timeshare company schemes to circumvent or delay paying compensation to their victims explained
In the wrong
Timeshare companies have been consciously and deliberately operating in violation of clearly defined consumer laws for over a quarter of a century.
Spain (among other countries) prohibited the sale of points or floating weeks. Contracts were limited to 50 years.
It also became illegal for a timeshare company to take any money on the day or during a ‘Cooling Off’ period. The reason was no secret. Hundreds of thousands of people had been cajoled into making a detrimental financial decision whilst on holiday, which they later regretted.
Timeshare is an emotional sale. Prospects are presented luxury and convinced that they deserve it. In a holiday mood, buoyed by sea, sun and gently undulating palm fronds, people are primed to buy. The law was designed to protect people from being taken advantage of in this way.
Timeshare companies knew that if they allowed people to return to the cold, leaden-skied reality of home before making up their minds, almost nobody would ever buy a timeshare.
So resort bosses ignored the law and carried as before, hoping to get away with the illegal sales for as long as they could.
The dam bursts
This gamble paid off for the timeshare resorts, and for quite some time.
During the next 17 years, resort lawyers delayed, obstructed and otherwise managed to fend off all legal challenges. Individual claimants were often defeated by the necessity of having to travel to Spain, deal with a justice system mired in red tape, and do so in an unfamiliar language.
Gradually claims companies took over and they were perfectly equipped to handle the cynical legal filibustering. In 2016 the first case was won by ANFI claimant Tove Grimsbo who was awarded €40,000 in compensation.
From that first victory all others followed. Every major European timeshare company was finally brought to account and between them they currently owe hundreds of millions in court awarded compensation. The financial impact has been so great that timeshare sales operations in Europe have almost all gone out of business.
Gruelling delays
Timeshare company lawyers work relentlessly on finding new and innovative ways to avoid paying their victims. These delays are little more than symbolic. The unavoidable truth is that timeshare companies deliberately ignored the law to make money at the expense of their customers. No amount of legal manoeuvring can protect them from the consequences of those actions.
Every inventive new tactic has patiently been defeated by the diligence of claims lawyers. Justice can not, in the case of timeshare mis-selling at least, be avoided forever. Only slowed temporarily.
The situation today, in 2024, is that timeshare companies have almost exhausted their options.
Their Canutian attempts to hold back the tide currently rely on two unconvincing strategies.
European Court of Justice ruling
Timeshare resorts have spent fortunes trying to force motions through various courts to avoid payments on the basis of where the companies who issued the original membership contracts are registered.
In the last 12 months, inventive timeshare company lawyers have achieved another delay in the process with a ruling in the European Court of Justice (ECJ) that could theoretically help them avoid compensation payments in Spain on jurisdictional grounds. This may affect certain Club La Costa and Diamond Resorts Europe contracts.
Since this ruling some Spanish courts have been dismissing claims based on jurisdiction.
It is, however important to note:
- Claims lawyers unanimously agree that the ruling is flawed and that Spanish jurisdiction does in fact apply. Expert opinion from leading Spanish legal academics also confirms that these cases fall under jurisdiction of the Spanish courts. A number of appeals have been filed on behalf of current claimants and the general expectation among industry experts is that the appeals will succeed.
- Even in the worst case scenario of these appeals somehow failing, the result would only be to change the jurisdiction where the case will be heard. There is zero expectation of clients being denied justice because of this ruling. In some cases this could extend the timeframe for completion of the awards process. It would also mean extra legal costs, however reputable companies like European Consumer Claims (ECC) would cover those costs. The clients would see no extra expense.
Sunset clause
Certain heavily exposed timeshare companies, for example Marriott Vacations, have been lobbying politicians and courts in Spain to introduce what is known as a ‘Sunset Clause.’
If they managed to get such a clause implemented it could potentially set a date limit for people to begin claims against timeshare companies for mis-selling. This would not affect anyone who has already begun their claim.
Again, prospective claimants should note
- Spain is infamous for its slow and ineffective bureaucracy. No such Sunset Clause law has yet been passed and nothing happens quickly in ‘Mañana Country.’
- If it did get passed, nobody knows what that limit would be. It could be six months, it could be six years. Or less, or more.
The consensus is that, as always, the sensible course of action for those who believe they have been wronged by a timeshare resort is to get in touch with a reputable claims company sooner rather than later.
Expert comment
“The wheels of justice might turn slowly in Spain,” notes Greg Wilson, CEO of ECC. “But once they gain momentum, they are not easily obstructed.
“The legal system at all levels in this country has demonstrated a clear commitment to punishing those who ignored consumer laws in order to profit at the expense of not only the victims themselves, but also the the national tourism industry as a whole.
“For many reasons, anyone who was mistreated in any way by a timeshare company would be well advised to act swiftly in terms of seeking redress.”
