Marriott Vacations Worldwide’s 2021 annual report suggests at least one major timeshare group is now confronting the issue of unlawful Spanish timeshare contracts, as owners increasingly win substantial compensation through the courts.
An industry with a bad reputation
The European timeshare industry has long carried a poor reputation. Many people still remember a time when touts regularly approached families heading to Spanish beaches, pushing holidaymakers into signing timeshare deals on the spot.
Timeshare was also linked to high-pressure sales operations in Portugal, Spain and the Canary Islands, sometimes associated in the public mind with UK criminal figures and money laundering. Hundreds of thousands of people signed expensive, long-term agreements, and their experiences were frequently reported in the media.
Eventually, the issue became impossible to ignore. Spanish authorities introduced laws intended to protect tourists from making major financial decisions while on holiday—likely in response to concerns about the impact on tourism.
New laws brought in
These changes led to rules stating that, from 5 January 1999 onwards, timeshare agreements could not run for longer than 50 years. “Floating weeks” and points-based memberships were also made illegal. In addition, timeshare companies were prohibited from taking any payment during the cooling-off period.
In theory, this should have made it easier for holidaymakers to avoid harmful financial commitments and reduced the risks tied to what was being sold.
However, many timeshare companies appeared willing to ignore the law, seemingly because complying would have affected earnings.
It is also true that Spain’s reputation for slow bureaucracy may have encouraged some operators to assume they could continue without consequences. Many decision-makers likely believed they would be long gone before they were ever forced to account for illegal practices.
Success opens the door
But the legal tide turned. In 2016, a Norwegian member of Gran Canaria-based timeshare entity Anfi sued over an unlawful contract and was awarded €40,000.
That case helped open the door to further successful claims, and M1 Legal—an established law firm specialising in timeshare cases—has continued to secure wins. Victims of the timeshare industry have now been awarded hundreds of millions of euros in total.
In fact, several major timeshare operations stopped sales and later filed for bankruptcy, including Diamond Resorts Europe, Silverpoint, Anfi, Club La Costa and Azure.
M1 Legal estimates the average compensation payout is over £20,000. The firm also reports a 98.6% success rate in cases against timeshare operations.
Lawyers still trying to delay justice
Despite this progress, lawyers acting for timeshare companies have continued to fight claims and attempt to delay outcomes, often refusing liability and relying on defences that victims view as obstructive.
"These were tactics that everyone knew would fail, including the timeshare companies themselves," according to Andrew Cooper, CEO of European Consumer Claims (ECC). "M1 legal, ECC's associated firm of lawyers, have been diligently working to overcome these delays one at a time. Each tactic defeated smooths the way for future claims, as that excuse is no longer valid. We are reaching the point now where even the most inventive timeshare company lawyers are struggling to find ways to hinder justice."
Marriott leading the way
Against that backdrop, it is notable that Marriott Vacations Worldwide (MVW) has acknowledged liability relating to "certain contracts entered into over after January 1999".
In its MVW 2021 annual report, the group states: "A series of Spanish court rulings that since 2015 have voided certain contracts has increased our exposure to litigation."
"This is a big step forward," Cooper says. "The MVW report admits that contracts in Spain did not meet Spanish timeshare laws. Publicly admitting this commits them to a position of needing to do something about it. As far as we are aware, no other timeshare company has made such a bold and honest public statement."
MVW’s report also refers to an "increased ability for owners of Spanish timeshares to void their contracts" and recognises that similar claims could "cause us to incur material litigation and other costs, including judgement or settlement payments."
The section concludes by warning the situation "may lead to a significant decrease in the number of resorts located in Spain in the Interval International (exchange) network, and the loss of members at who own... at those resorts."
Marriott provides rapid reward payments
Marriott Vacation Club International may have taken corporate policy decisions to avoid appeals used primarily to delay resolution. That view is supported by reports of some clients receiving payments soon after winning their cases.
Examples include a German couple with a Marbella timeshare awarded €81,208, and an owner from Palma de Mallorca who received €43,319. Both reportedly received their money within weeks.
"This is a huge break from traditional timeshare company behaviour," continues Andrew Cooper. "In the past, timeshare companies have fought for years, knowing they were wrong, but hoping that they could outlast their opposition. That was a realistic goal for them when they were dealing with individuals, but firms like M1 Legal will never give up. It seems like MCVI have finally accepted that."
Even if an end is in sight, Cooper suggests some resistance should still be expected from certain timeshare companies. "Don't get me wrong," he says. "Even Marriott are still challenging us in many cases. But as market leaders, their recent examples of facing the truth and obeying court rulings are giving us grounds to believe that the whole industry may be about to turn a corner."
"For people who have been on the fence about claiming compensation for illegal timeshare contracts. There has never been a better time."
Would you like to discuss issues around relinquishment or making a claim for timeshare compensation?
Then contact Timeshare Advice Centre today to find out more.
