Could Barclays Partner Finance timeshare loans become the next PPI-style scandal?
On 14 June 2021, Timeshare Advice Centre reported a significant development for timeshare owners who were ‘mis-sold’ Barclays Partner Finance (BPF) loans linked to a Maltese timeshare resort.
Barclays Partner Finance (BPF) was a preferred finance provider for the resort and, in relation to loans granted between April 2014 and April 2016, Barclays agreed to repay the interest element plus an additional 8%. Evidence of Barclays Partner Finance loan mis-selling has also been identified outside these dates, and this has been lodged with the FCA.
A solicitor collaborating with our associated firm of lawyers, M1 Legal, challenged the decision and argued that the capital element should also be refunded, together with the 8% interest.
Update: capital refunds and credit file corrections agreed
An appeal was submitted to the Upper Tribunal. However, before the hearing date, BPF agreed on a voluntary basis to refund the capital element and to remove any adverse entries on credit files relating to these loans.
The remediation process started on 15 September 2021 as a pilot scheme (with refund letters sent to 200 consumers). If all went smoothly, it was due to continue from 14 October to 26 November 2021 for the remaining consumers. It was anticipated that the process would be completed by 25 April 2022.
We understand the total Barclays Partner Finance timeshare refund is expected to be around £48 million, including the writing off of any remaining debts. The timeshare owners were represented by Adriana Stoyanova, a solicitor collaborating with M1 Legal, who raised the argument with the FCA several years ago. She has also said that, looking back at early rulings on PPI claims, this case appears to have followed a similar path: initial decisions focused on claimable statutes, with wider evidence of mis-selling emerging later and opening up further claim opportunities.
An internal check carried out on clients with finance loans attached to their timeshare purchase revealed that 46% were arranged by unregulated brokers (i.e. the timeshare sales companies or representatives).
This indicates that other finance providers may also be liable, which could lead to a substantial payout for owners at other resorts. In our view, there may be around £2 billion worth of mis-sold loans in this sector.
European Consumer Claims CEO Andrew Cooper said: “We urge all timeshare owners to find out about their rights as they could be entitled to huge sums in compensation. We have already assisted hundreds of owners with timeshare contracts which were found to be non-legally compliant and there are thousands more who could also be entitled to their money back.”
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