Buying a timeshare is a minefield, with companies using unethical selling techniques to tie people into deals on the spur of the moment

Holiday Which? editor Patricia Yeats

While there appears to be a greater awareness that timeshare scams exist, fraudsters are devising increasingly ingenious schemes to combat this growing awareness.

A new report by the Consumers' Association magazine Holiday Which? calls on the government and European Union to crackdown on rogue operators and tighten-up on inadequate legislation.

Holiday Which? also said that people were misguided in thinking that they were good investments. Most people only get back 20% of the price paid, when they sell their share, says the report.

Sucked-in

How to avoid being tricked

Whatever you are told, your presentation will be about timeshare or something similar. If you are not interested, don't go - don't worry about offending their feelings. Any free holiday is likely to come with strings attached Be wary of money-back guarantees Don't take money or credit cards with you. If they refuse to give you any written information, walk away. Pay nothing and sign nothing, even if you are offered a discount. If you do sign, don't wait until you get home if you want to cancel. Write to the address on the contract using recorded delivery and keep a copy. Source: Consumers' Association

Common cons include enticements such as 'free' holiday offers using scratch cards, a disregard of current cooling-off rules, and 'cheap' loans that turn out to be expensive on return to the UK.

"Buying a timeshare is a minefield, with companies using unethical selling techniques to tie people into deals on the spur of the moment," said Holiday Which? editor Patricia Yeats.

But, even when a timeshare company is legitimate, says the report, other problems can arise.

High management fees, and problems selling make buying a timeshare for some people a stressful and expensive process.

Better protection?

The Timeshare Directive offers a degree of cross-border protection to consumers.

If you sign a timeshare contract in the EU or European Economic Area (including the Canaries, pus Cyprus and Malta, " it must conform to a number of rules such as a minimum 10-day cooling-off period.

However, the directive has only limited powers, primarily because the legal definition of a timeshare is currently very narrow.

Legally it only covers contracts of more than three years and a minimum period of a week.

This means that companies have started selling timeshare schemes of under 35 months - with the option to extend for more years - and 'time' on narrow boats and cruises, said the report.

Share schemes and property bonds are also not covered by existing legislation, and neither are boats or cruises.

Nasty shock

Common cons

'Free holiday' offers with inconvenient departure dates at short notice promises of a cooling-off period after a sale that are then denied if the buyer wants to cancel Charging �3,000 for an internet password that gives access to thousands of available - yet only a few, if any, of these actually exist. Holiday clubs that guarantee all your cash back if you want to sell your membership - only for the contractor to wriggle out of it. Paying �10,000 for timeshare with the promise of �1,000 back each year plus a free holiday. This works for a couple of years and then the company disappears with �8,000. Points clubs where 'inflation' erodes the value of the points Paying for holiday-club membership with 'cheap' loans that turn out to be expensive on return to the UK. Source: Consumers' Association

One attraction of timeshare investing is that the cost of future holidays is paid upfront with a lump sum.

However, there are often high additional charges.

The most common way for people get stung is with high maintenance fees, which are paid to a management company that runs the resort.

The timeshare owners or tenants have little or no control over fee hikes.

Holiday Which? is also concerned that people may assume that investing in a timeshare is a good investment.

Tony Mitcham, who was interviewed by Which?, bought a Florida timeshare in 1982 for �9,500, and sold it for �2,400 two years ago.

However, the contract he signed did not specify a limit on how much the charge could rise annually, and by 2000, he was paying �660 in maintenance charges for his two weeks.

Mr Mitcham said that including purchase, maintenance and other fees, his timeshare cost about �500 for each week over 18 years, before flights or car hire.

Ms Yates said: "We would welcome a tightening in the law and an extension to the Timeshare Directive to include holiday clubs and timeshare of less than three years duration to safeguard the rights of existing timeshare owners."

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