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Consultation on the Timeshare Directive

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BIS Department for Business Innovation and Skills - Expert Author

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Issued 12 July 2010

The Government is moving to strengthen consumer protection around holiday timeshares with its new consultation.

The Department for Business is seeking views from businesses, consumers, enforcement authorities, and other interested parties on the transposition of the European Commission’s new Timeshare Directive into UK law. This will introduce common rules across the European Community by February 2011 and set the conditions for fair trading in timeshares.

Action at a European level was necessary because of the cross-border nature of the sale of these products, and the exposure to detriment that consumers can face in this market.

Consumer Minister Edward Davey said:

“Tourism plays an increasingly important role in the economies of Europe and introducing common rules will benefit vulnerable consumers and the people who currently fall prey to bogus operators while they are on holiday. Implementing these regulations will boost consumer confidence in the genuine timeshare industry, and help eliminate the rogue traders that bring the industry into disrepute and cause consumers problems.

We intend to provide a simpler, more easy to understand framework within which genuine operators in the UK can thrive.”

The proposed regulations include a range of provisions to improve UK consumer protection in a number of areas. For example:

Long-Term Holiday Products, also known as Holiday Clubs cause by far the most consumer detriment in this sector and are covered by regulations for the first time. 

Timeshare coverage is extended to any overnight accommodation, which includes, for example, timeshare in caravans and boats and rights to access accommodation in a pool of accommodation.

Timeshare Resale is an area rife with operators who seek payment up-front on the bogus promise of a sale. This is covered by regulations for the first time.

Timeshare Exchange is covered for the first time and important pre-contractual information, such as any restrictions on the choice offered under the exchange scheme, must be provided.

Notes

1)           The full title of the consultation is: CONSULTATION ON THE PROPOSED TIMESHARE, HOLIDAY PRODUCTS, RESALE AND EXCHANGE CONTRACTS REGULATIONS 2010. You can find the consultation here: http://www.bis.gov.uk/Consultations/timeshare-holidays-exchange-resale?cat=open

2)           The consultation is open for 12 weeks and closes on 1 October 2010. The Government shall aim to respond by the end of October 2010.

3)           The consultation is on the transposition of the European Commission’s Timeshare Directive, which was adopted by the UK in February 2009. This looks at:

·              Long-Term Holiday Products, also known as Holiday Clubs - contracts of more than one year in duration by which a consumer acquires access to promised discounts on accommodation and other travel services. Sellers will have to provide standardised information about the product as part of the contract.  The contract will then be subject to a 14-day “no-strings” cooling-off period during which no payment is permitted.  And the seller can only take yearly payment throughout the contract agreement, with the consumer able to terminate the contract as each payment becomes due.

·              Timeshare - contracts of more than one year in duration by which the consumer acquires the right to use overnight accommodation for more than one period of occupation. Pre-contractual information provision is extended and substantially standardised and the cooling-off period extended from 10 days to 14 days Europe-wide. The ban on up-front payments is retained.

·              Timeshare Resale - contracts by which the trader assists a consumer to sell or buy timeshare or a long-term holiday product. The new regulations require the trader to provide important pre-contractual information, a 14-day cooling-off period, and disbars the trader from accepting any payment until the sale of the timeshare is complete or the contract is otherwise terminated.

·              Timeshare Exchange - contracts by which, via membership of an exchange scheme, consumers in exchange for providing temporary access to their timeshare rights acquire the right to access other overnight accommodation or other services. Most memberships are sold at the same time as a timeshare purchase and the consumer will have the 14-day cooling-off period attached to the timeshare sale in which to reconsider. When exchange membership is bought separately from a timeshare purchase the consumer has a separate 14-day cooling-off period.


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© Crown Copyright. Material taken from the BIS Department for Business, Innovation and Skills. Reproduced under the terms and conditions of the Click-Use Licence.



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Article Published/Sorted/Amended on Scopulus 2010-07-13 23:28:17 in Legal Articles

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