Locked in for life
Timeshare holiday hazard
TIMESHARE holiday schemes have been exposed for giving a dastardly new meaning to “deal of a lifetime”, with consumers locked in to paying hefty fees for 80 years or more.
As many as 170,000 Australians fork out about $270 million annually on holiday timeshares and a Choice investigation has found consumers can lose as much as 90 per cent of their upfront payment, which can run to $25,000.
Timeshares — typically spruiked at shopping centres or theme parks — are actually managed investment schemes and hence regulated by the Australian Securities and Investments Commission.
Choice said scheme promoters are often giving financial advice yet are exempt from many parts of the nation’s consumer protection regimen.
“This is one area of the law where financial advisers have preserved the cowboy tactics of the past — high pressure sales techniques, high commissions and shocking consumer outcomes,” Choice spokesman Tom Godfrey said.
The Consumer Action Law Centre has received more than 50 complaints this year about timeshare schemes.
“It’s a significant cause of consumer distress,” Consumer Action chief executive Gerard Brody said. “I think lots of people don’t understand what they are signing up to when they purchase timeshare.”
Fran and Lindsay McIntosh bought into a holiday timeshare scheme in 1991. It was good while they had young kids. But now they can’t get out of the scheme, which involves annual payments — currently $840 — for 99 years. The usual length is 80 years. They paid $13,450 upfront.
“We have tried to sell through recommended resales to no avail,” Mrs McIntosh said. “I did ask what happens if we die and was advised the debt is taken over by next of kin.”