PN 54/02     29 August 2002

In a crackdown on timeshare and holiday club sales that fall foul of the law, the OFT is calling for victims of such sales in Spain to come forward.

Under new powers implemented earlier this year, the OFT can now take action under Stop Now Orders against businesses based in the European Union that breach certain consumer protection laws and thereby harm the interests of UK consumers.

The OFT is now appealing for further information on timeshare and holiday club sales practices that breach the Timeshare or Doorstep Selling Directives. The OFT is particularly concerned about traders acting in resorts in Tenerife, such as the Playa de Las Americas, and elsewhere in the Canary Islands. Complaints already received include problems such as:

• lack of information about cancellation rights and threatening behaviour towards consumers who try to exercise their right to cancel
• misleading or false oral statements
• forcing holidaymakers to hand over large deposits during cooling-off periods, which is prohibited.

John Vickers, Director General of Fair Trading, said:

'Although there are many reputable timeshare companies, there are also unscrupulous operators. The new STOP Now powers mean that we can now take robust action against them when they break the law, if they are based in any of the 18 European countries that belong to the EEA.'

The OFT cannot intervene in individual cases, but evidence from consumers will help ensure that the OFT can take action to stop traders from breaching the legislation in the future. Any consumers with a complaint or information about Spanish timeshare or holiday club operators should contact the OFT by email at euroteam@oft.gsi.gov.uk, phone 08457 22 44 99 or write to International Liaison, Consumer Regulation Enforcement, OFT, Fleetbank House, 2-6 Salisbury Square, London EC4Y 8JX.

NOTES

1. Directive 94/47/EC, commonly known as the Timeshare Directive, gives protection to purchasers of the right to use immovable properties on a timeshare basis. The Directive, which applies to timeshare contracts concluded for at least three years in European Member States, includes a provision that purchasers must have a minimum statutory cooling-off period of 10 days from signing the contract in which they may withdraw without giving any reason. It also prohibits the taking of deposits before the end of the cooling-off period.

2. Holiday club deals, which include those concluded for less than three years, without the possibility of extension, fall outside the scope of the Timeshare Directive. However, depending on where the contract is signed and the nature of the deal, it may be subject to the Doorstep Selling Directive (EU 85/577/EEC). The Directive requires consumers to be given a cooling-off period of seven days on contracts concluded away from business premises.

3. Under the Stop Now Orders (E.C. Directive) Regulations, which transpose the EC Injunctions Directive (98/27/EC), the OFT can apply for a court order against traders who breach or are threatening to breach any of a number of laws harming the collective interests of consumers. It can seek written assurances and undertakings in lieu of court action. The publication of a list of 'qualifying entities', including OFT, in the Official Journal of 2 February 2002, meant that from that date, these powers could be exercised before the courts of all European Economic Area Member States which have transposed the Injunctions Directive. The Directive is expected to be transposed in Spain in autumn 2002.

4. The Stop Now Regulations cover the following areas: doorstep selling, timeshare, unfair contract terms, consumer credit, distance selling, package travel, package holidays and package tours, misleading and comparative advertising, sales of goods rights, TV broadcasting activities and advertising of medicinal products for human use.

5. In this press release the functions of the Director General of Fair Trading (DGFT) under the Regulations are for simplicity described as the functions of 'the OFT'. The Enterprise Bill proposes to replace the office of the DGFT with the OFT, to which would be transferred the DGFT's functions.