The Marriott's Vacations Worldwide 2021 report suggests that at least one timeshare company is finally facing up to the problem of illegal timeshare contracts now that victims have started to win large amounts of compensation.
If there is one thing you can say about the European timeshare industry, it's that it has never enjoyed a particularly good reputation. Many people still remember how it was common a few decades ago for touts to approach families making their way to Spanish beaches to sell them timeshare deals.
Then there was the association that timeshare had with celebrity gangsters from the UK who laundered their money with pressure sales tactics in Portugal, Spain and the Canary Islands. Hundreds of thousands of people ended up signing contracts that were expensive, and it was common to see stories of their ordeals reported in the media.
After a while, the problem could no longer be ignored. Spanish authorities finally introduced laws to protect tourists from making huge financial decisions on holiday, probably because they were concerned about the negative effect it could have on tourist revenue.
This led to the introduction of laws stating that from January 5th1999 onwards, people agreeing to a timeshare could not do so for a period longer than 50 years, and 'floating weeks' and point-based memberships were also made illegal. In addition, timeshare companies were prevented from taking any payment while in the Cooling Off period.
As a result of the laws, it should have been easier for people to avoid making huge financial commitments and the products being purchased less harmful.
But many timeshare companies were happy to ignore the new laws, perhaps due to concerns over their potential loss of earnings if they played by the rules.
It is also true that the well-known problem with Spanish bureaucracy probably gave some timeshare companies a feeling of protection over their illegal practices. Things rarely happen efficiently, and many people making the decision at timeshare companies felt that they would not be around any longer when they finally had to face up to their illegal actions.
But justice finally came, and in 2016, a Norwegian member of Gran Canaria based timeshare entity Anfi, sued the company over an illegal contract and was awarded €40,000.
This opened the door to other successful cases, and M1 Legal, an established law firm of expert timeshare lawyers, has been racking up the wins ever since. Timeshare industry victims have now been awarded hundreds of millions of euros, and the tables have turned.
In fact, many large timeshare operations began to stop sales operations and ended up filing for bankruptcy -- companies like Diamond Resorts Europe, Silverpoint, Anfi, Club La Costa and Azure.
M1 Legal estimates that the average compensation paid out is over £20,000. Success rates are also high, with the firm currently having a success rate of 98.6% in cases against timeshare operations.
Despite all the progress, lawyers working for timeshare companies have continued to fight to prevent the resorts from dealing with their obligations. They have still refused any liability, and pointless defences have been used to delay justice for victims.
"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."
Therefore, it has been ground-breaking that Marriott Vacations Worldwide (MVW) has now admitted liability regarding "certain contracts entered into over after January 1999".
In its MVW 2021 annual report, the timeshare giant said: "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."
The MVW report states that there is "increased ability for owners of Spanish timeshares to void their contracts." The report also admits to the fact that similar lawsuits brought against MVW may "cause us to incur material litigation and other costs, including judgement or settlement payments."
The section in the report concludes by predicting that the current 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 Vacation Club International may have taken policy decisions at corporate level to avoid making appeals designed to delay justice, which can be seen by the fact that some clients have received their payments very quickly after winning their cases.
This includes a German couple who had a timeshare in Marbella and were awarded €81,208, and another owner from Palma de Mallorca, who received €43,319. They both 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."
But even though an end might well be in sight, Cooper still suggests that resistance is to 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 claims for timeshare compensation?
Then contact Timeshare Advice Centre today to find out more.
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