Victims of illegal timeshare contracts in Spain are winning significant amounts of compensation. Now, the problem is at last being faced in the Marriott’s Vacations Worldwide 2021 report.
A bad reputation
European timeshare has never really enjoyed a great reputation. Back in the 1980s and 1990s, it was common for touts to intercept families going to the beach in Spanish resorts. Later, the business developed an association with celebrity gangsters from the UK laundering their money in Spain, the Canary Islands and Portugal using sales operations where lots of pressure was put onto tourists. The tourists who ended up being persuaded to sign the expensive contracts number in the hundreds of thousands, and timeshare scandals were a constant in the tabloid media.
The problem became so big that it could not be ignored any longer. The authorities in Spain, concerned about the effect it was having on tourism revenue, brought in laws that were designed to protect customers from making huge financial decisions that could have life-changing effects.
Introduction of new laws
Laws were brought in stating that after January 5th1999, anyone signing up for a timeshare could only have a membership with a maximum duration of 50 years. The practice of selling ‘floating weeks’ became illegal, as did memberships based on points. Timeshare companies were also prohibited from taking payment during the cooling-off period.
As a result of these laws, it should have been more difficult for prospects to find themselves being pressured to make commitments that would be damaging to their finances. The products they bought should also not have been as harmful.
But the truth is, with a few exceptions, timeshare companies ignored the new laws, probably due to worries over the loss of earnings that would come from playing fair.
Timeshare companies that were operating illegally also felt protected by the well-known problems with Spanish bureaucracy, according to industry observers, where it’s rare for things to happen efficiently or quickly. The people making the decisions at timeshare operations in Spain felt that they would be out of the picture by the time they were eventually forced to deal with their illegal activity.
First successful case
It was only in 2016 that the first victim managed to win a timeshare case. A member of Gran Canaria based timeshare company Anfi sued the giant for €40,000 over an illegal contract, and that was when M1 Legal, a leading timeshare law firm, began to rack up wins against the main bad actors in Europe. Since then, victims of malpractice in the timeshare industry have won hundreds of millions of euros.
After a while, the large timeshare companies began to stop their sales operations and file for bankruptcy. One after the other, well-known names like Silverpoint, Club La Costa, Anfi, Azure and Diamond Resorts Europe began to topple.
The average amount of compensation award is estimated by M1 Legal to be over £20,000. On top of that, they currently boast a success rate in court of a huge 98.6% when taking on timeshare companies.
Still fighting
Ever since that first victory in 2016, lawyers for timeshare companies have been fighting hard to deflect the legal obligations of their resorts. They have not admitted any liability, and they have used pointless defences to delay justice.
“These were tactics that everyone knew would fail, including the timeshare companies themselves,” says Andrew Cooper, the CEO of European Consumer Claims (ECC). “M1 legal, ECC’s associated firm of lawyers, have been diligently working to overcome these delays one at a time. Each tactic defeated smooths the way for future claims, as that excuse is no longer valid. We are reaching the point now where even the most inventive timeshare company lawyers are struggling to find ways to hinder justice.”
Marriott is now taking a stand
But in a move that is truly ground-breaking, Marriott Vacations Worldwide (MVW), a market leader, has now admitted liability in regard to “certain contracts entered into over after January 1999”.
The giant timeshare company said in its MVW 2021 annual report that “a series of Spanish court rulings that since 2015 have voided certain contracts has increased our exposure to litigation.”
“This is a big step forward,” says Cooper. “The MVW report admits that contracts in Spain did not meet Spanish timeshare laws. Publicly admitting this commits them to a position of needing to do something about it. As far as we are aware, no other timeshare company has made such a bold and honest public statement.”
In the MVW report, it is noted that there is “increased ability for owners of Spanish timeshares to void their contracts.” In addition, the report admits that similar lawsuits against the company might “cause us to incur material litigation and other costs, including judgement or settlement payments.”
The section included in the 150-page report ends by making a prediction that the situation “may lead to a significant decrease in the number of resorts located in Spain in the Interval International (exchange) network, and the loss of members at who own… at those resorts.”
Fast reward payments from Marriott
In another sign that policy decisions may have been taken by Marriott Vacation Club International at corporate level to stop making pointless appeals in these cases, it recently made payments almost immediately to clients who have won their cases.
A German couple who owned a property in Marbella as well as an owner from Palma de Mallorca received compensation of €81,208 and €43,319 respectively. In these cases, the money was deposited in weeks by Marriott.
“This is a huge break from traditional timeshare company behaviour,” Andrew Cooper says. “In the past, timeshare companies have fought for years, knowing they were wrong, but hoping that they could outlast their opposition. That was a realistic goal for them when they were dealing with individuals, but firms like M1 Legal will never give up. It seems like MCVI have finally accepted that.”
But while the end may well be in sight, Cooper also warns that some resistance from timeshare companies is still likely. “Don’t get me wrong,” he says. “Even Marriott are still challenging us in many cases. But as market leaders, their recent examples of facing the truth and obeying court rulings are giving us grounds to believe that the whole industry may be about to turn a corner.”
“For people who have been on the fence about claiming compensation for illegal timeshare contracts. There has never been a better time.”
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