Misselling victims’ 9-MONTH wait for banks to cough up timeshare payouts
TENS of thousands of pensioners who were missold timeshares are at risk of ‘never seeing justice in their lifetime’ as the compensation claims drag on for months, a law firm representing them warns.
In May last year, a High Court ruling paved the way for victims who had been missold timeshares before 2010 to receive compensation from major banks, including Shawbrook and Barclays Partner Finance (formerly Clydesdale Financial Services).
Today, Praetorian Legal, a law firm which represents these timeshare owners, is calling on the Chancellor to force banks to pay up.
In a letter to Jeremy Hunt, seen by Money Mail, lawyer Gary Smith warns that ‘it is a grave injustice for many thousands of victims in urgent need of the compensation they are owed’.
He estimates that around 25,000 victims should receive a total of £500million in compensation — and up to £150,000 each in the worst cases.
However, nine months later, victims are still waiting and have ‘faced severe financial hardships in their senior years’.
Mr Smith says that several victims have died without seeing justice.
Timeshares proved hugely popular in the 1980s and 1990s — and a decade ago more than half a million people in the UK still owned them. But they fell out of favour as the sector became notorious for its aggressive sales techniques.
The schemes gave investors the right to take a holiday in a property, often abroad, for a set number of days a year.
In return they paid a lump sum upfront and annual maintenance fees. Investors also had the option to part- own a property in what was known as fractional timeshare schemes. These investments typically involved expensive loans from banks working with timeshare firms.
But in some cases, investors’ ability to repay the debt was not properly assessed, leaving many trapped in contracts with properties they couldn’t offload.
Former secretary of state for business and trade Vince Cable this week described the delays as ‘ yet another scandal’ from the banking sector and another case of ‘ cynical disregard’ for the rights of misselling victims. ‘There is also an uncomfortable parallel with the current Post Office scandal,’ he says.
‘Intolerable foot dragging means that those whose rights have been established by the courts are denied compensation to which they are due.’ Banks claim delays are due to complexity involved in resolving cases. A Barclays spokesman says: ‘We are sorry for the delay in resolving these complaints, which are taking longer to process than anticipated due to their complexity.
‘Any customers who are concerned about an outstanding case should contact us directly.’ A spokesman for Shawbrook says: ‘We welcomed the court’s clarifications of the applicable law and its finding that each complaint must be carefully considered on its own individual facts, and a “one- size fits all” approach is not appropriate.’ Thomas and Agnes Woods from Rattray, Aberdeenshire, are desperate to draw a line under the timeshare nightmare that has cost them £48,000 over the past 24 years. In 2000, the couple took out a loan to buy a fractional timeshare to take family holidays with their three children in destinations including Spain, the Lake District and America.
Initially, the couple paid £4,000 in four monthly instalments for a set of points which could be redeemed for a one-off week’s holiday. The scheme would also require them to pay an annual management fee of £2,000.
They chose to spend that week in Spain, but on arrival, they say, timeshare sales representatives insisted they attend a five-hour meeting where they were pressured into spending thousands of pounds more to buy another set of points for a holiday at a later date. They then agreed to pay a second instalment of £4,000.
The couple say they were told that they could not buy the points outright and were encouraged by salespeople to take out loans.
‘It sounded like a good deal — it’s so easy to get caught up in it all,’ says Agnes, a former ambulance service worker.
At first, the family took two holidays a year, but a few years on found the high costs were crippling their finances.
Agnes says: ‘In 2017 we were desperate to get out of the scheme. There was no way to avoid paying the £2,000 annual management fee so we joined the lawsuit led by Gary Smith.’
The couple say they appealed to the Financial Ombudsman Service, and it was in touch in November to say that they were due compensation. ‘The Ombudsman said it would be paid out by December 8 but we’re still waiting,’ says Agnes.
A Financial Ombudsman Service spokesman says it has resolved more than 800 cases and issued a further 1,700 provisional assessments.
He says: ‘The final decisions of our free and independent service are legally binding when accepted by a consumer — businesses must follow our direction, including with other similar cases.
‘If they do not we will refer them to the regulator. Our priority now is to settle any other cases quickly and fairly.’