Department for Business, Innovation and Skills
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Commission adopts UK proposals on `holiday scams'
The European Commission today announced plans to crack down on bogus "Holiday Club" scams which have hit tens of thousands of British holidaymakers.
The Department of Trade and Industry has been pressing the Commission to help stamp out rogue "holiday clubs" by updating the 13 year old EU Timeshare Directive. The Commission's plans incorporate proposals put forward by the DTI, on behalf of the UK Government.
Many "Holiday Clubs" have adopted the sharp sales practices that have been banned in the timeshare industry. Instead of buying a week every year in a property, victims part with thousands of pounds to buy membership of a club promising cheap holidays for years ahead, which often turns out to be worthless.
Holiday clubs get around timeshare laws because holiday club membership is not linked to any rights in any particular property, so consumers are not protected.
The proposals include:
* A ban on Holiday Clubs taking money up front
* A 14 day cooling-off period
* Up front information setting out precisely what club membership entitles a consumer to, and exactly who their contract is with. This must all be included in their contract.
DTI Consumer Minister Ian McCartney welcomed the proposals and said:
"Since the mid-1990's we have had effective laws to outlaw scams with Timeshares. Scammers have found a way to get around the rules by selling a different product - holiday clubs.
"People are being conned into shelling out thousands of pounds on what turn out to be empty promises. Unscrupulous holiday club operators promise a lifetime of cheap holidays in exotic locations - but deliver nothing. Victims not only lose their holiday but also their hard-earned savings.
"Because these scams are on holidaymakers while they in a foreign country, this is a problem that requires Europe-wide action. We very much welcome this initiative from the new Consumer Commissioner, Meglena Kuneva. We will keep working hard with the Commission and the other member states to ensure that this proposal is adopted.
"Until then, our advice is for consumers to be very wary of holiday clubs. Don't sign up during a presentation, don't part with any money or credit card details until you have had time to think things over. If you are told this is a once in a lifetime, never-to-be-repeated offer, don't believe it."
Holiday club membership can take the form of a right to buy, or a promise to be offered discounted travel and accommodation which might be via access to a website - offering a range of travel and accommodation arrangements at a price which is probably achievable through normal means any way via a normal travel agent or by buying direct from the web.
Club membership costs up to £15,000. Buyers then find they have no guarantee on dates or quality of accommodation, and they are committed to paying an annual subscription fee even if they do not take a holiday.
Often enticements such as "free" holidays or promises of a win on a scratch-card are used by the marketers of these products to get consumers to sales presentations. These initial approaches can be either direct while the consumer is on holiday or via telemarketing.
Notes for editors
1. For background on holiday club scams, see the Office of Fair Trading [OFT] website:
http://www.oft.gov.uk/oft_at_work/consumer_initiatives/scams/bogus-holiday
2. The European Commission has published a proposal for a New Directive on the Protection of Consumers in Respect of Certain Aspects of Timeshare, Long-Term Holiday Products, Resale and Exchange - building on and replacing the 1994 Timeshare Directive.
3. The OFT estimates that as many as 400,000 UK consumers have lost an average £3,000 each to bogus holiday club scams.
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