Case reference number: CRE-E-24584
Case opened: 2009 following referral from a South East Regional Scambusters Team at Essex Trading Standards and the receipt of consumer complaints by OFT.
Case closed: September 2012
On 16 December 2010, the OFT issued High Court proceedings against Incentive Leisure Group Limited ('ILG') and Personal Travel Group Limited ('PTG'), Geo Demographic Market Research Limited ('GDMR') and seven individuals, for their involvement in activities which the OFT considers breached consumer protection law. The OFT issued proceedings to stop these companies and individuals using sales and marketing practices that the OFT considered to be misleading or otherwise unlawful. These practices were being used when selling and marketing holiday club memberships and other holiday based products.
The OFT was concerned that holders of timeshare products were invited to attend presentations on the promise of being able to dispose of their timeshares, with their maintenance charges, when in fact they were subjected to lengthy and high pressure sales pitches to be sold expensive holiday club memberships costing large sums, in some cases up to £12,000. Sales staff told these holders they could get back up to 95 per cent of these sums under a 'reclaim' scheme but did not explain the restrictions that applied, and often played on the holders' fears that their children would otherwise be liable for timeshare maintenance fees. Many consumers subsequently wished to cancel their holiday club memberships but were not allowed to do so when they tried.
ILG and PTG sold and marketed holiday club memberships and other holiday based products to consumers. GDMR placed adverts in national and local newspapers and in-flight magazines on behalf of ILG.
Keith Barker was a director of ILG, and is a director of GDMR and PTG. Kimberley Bambroffe was a director of ILG and is a director of PTG. Martin White was a director of ILG.
Jonathan Daniels, Mark Gales, Robert Knight and Lily Alderson were involved in the sale of ILG and/or PTG products.
As a result of its investigation, the OFT considered that the adverts placed by GDMR failed to disclose the identity of ILG and gave the misleading impression that consumers would be able to dispose of their timeshares and as a result no longer have to pay maintenance charges for them.
Instead, consumers who responded to the adverts were invited to attend presentations where they were subjected to lengthy and high pressure sales pitches which resulted in their being sold expensive holiday club memberships or their agreeing to join what appeared to be a pyramid scheme on payment of a significant fee.
Consumers were often told that this was their only chance to dispose of their timeshares, failing which their children would be responsible for ever increasing maintenance fees after their death.
Also as a result of its investigation, the OFT considered that consumers were promised a one off right to sign up to a 'reclaim scheme', under which they were promised up to 95 per cent of the value of their timeshare back. The OFT believes that this scheme may have been subject to terms and conditions which were not properly explained. As a result, it was unlikely that any sum as high as 95 per cent would be repaid.
The OFT also considered that many consumers subsequently wished to cancel their holiday club membership, but were told they did not have the right to do so. This is despite the rights given under the Cancellation of Contracts made in a Consumer's Home or Place of work etc Regulations 2008, which allow such contracts to be cancelled within seven days of when they have been made (subject to longer or shorter time periods in exceptional circumstances).
OFT issued High Court proceedings, in order to prevent these activities from continuing.
In April 2011, interim enforcement orders were obtained against PTG, GDMR and two individuals who are directors of PTG and were directors of ILG. At the same time, final enforcement orders were obtained against Martin White, Jonathan Daniels, Mark Gales, Robert Knight and Lily Alderson.
On 22 March 2012, a final enforcement order was obtained against GDMR, Keith Barker and Kimberley Bambroffe (the two directors of PTG). No order was obtained against ILG, because it went into creditors' voluntary liquidation in Gibraltar on 21January 2011 and was dissolved on 16 January 2012.
PTG went into creditors' voluntary liquidation in Gibraltar on 14 December 2011 but a final enforcement order was obtained with the agreement of PTG's liquidator, on 23 March 2012.
The content of all the final enforcement orders was agreed by GDMR, the liquidator for PTG, the individuals and the OFT, and was approved by the High Court.
Amongst other things, the orders prohibit the companies and the individuals from engaging in misleading sales practices when dealing with people who want to dispose of their timeshares, and the orders require consumers to be given cancellation rights in certain circumstances.
In particular, the orders prevent the companies and individuals from:
The orders have the effect that if in the future, PTG, GDMR and/or any of the seven individuals involved in the proceedings breach the terms of the orders, they risk being sent to prison.
Be aware there may be additional protection when buying with a credit card
Consumers may have additional rights of recovery when purchasing goods or services for a cash price that exceeds £100 but is not more than £30,000 with certain types of credit, for example by using a credit card. The additional rights are set out in section 75 of the Consumer Credit Act 1974, and they apply where there are commercial arrangements between the creditor and the supplier of the goods or services. Such arrangements always exist in the case of a credit card purchase, but they may also exist where for example finance is arranged by the seller.
A consumer may be able to make a claim to the credit card provider or finance company to recover money where he has used the credit facility to pay the trader.
The claim may succeed if it can be shown that the trader was responsible for a breach of contract or misrepresentation.
The credit provider may be jointly and severally liable for the trader's misconduct and as a result may pay back to the consumer the monies paid out to the trader.
If you paid for something using a Mastercard or Visa debit card, you may also have the option of making a claim through their 'chargeback' scheme. For example, you can make a claim from chargeback if there is a fault with something you bought that cost less than £100. However there are strict time limits within which you have to act, after which you will no longer be able to make a claim.
The OFT cannot guarantee that a claim made by a consumer under section 75 or a 'chargeback' scheme will succeed. Much will depend on the circumstances of each case.
The OFT does not provide advice or resolve individual complaints for consumers. Consumers who believe they have an interest in this matter should obtain genuinely independent legal advice.
Warning - unsolicited approaches to ILG or PTG customers
We are aware that some customers of ILG, PTG or holders of Reclaim certificates have received unsolicited emails or cold calls from people who claim to represent companies who are able to get refunds of fees that have been paid to ILG or PTG including through a class action.
We cannot confirm whether or not these companies are genuine. Therefore, we would suggest that consumers exercise caution when deciding whether to respond to these companies.
In particular, consumers should not pay upfront fees to these companies or travel abroad to meet anyone who claims to be a representative of these companies, without having thoroughly researched the matter first and received clear and written confirmation of the services that are being offered.
We believe that the most appropriate course of action is to obtain genuine and independent legal advice (for example advice from a solicitor). Consumers who paid using credit cards should also consider whether they might benefit from the additional rights set out in section 75 of the Consumer Credit Act 1974 (see above).
Team Leader: Judith Butler (020 7211 8353, email@example.com)
Project Director: Jason Freeman (020 72118262, firstname.lastname@example.org)
Senior Responsible Officer: Cavendish Elithorn (email@example.com, 020 7211 8170)
Media enquiries: Any media enquiries should be directed to a member of our Press Office
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