Your web browser is out of date.

Update your browser for better security, speed and to get the best experience on this website.

Update your browser
Water pool at Tenerife island 504126958 3465x2310

Fractional Ownership – Lenders Judicial Review fails!

A victory for many Club La Costa and Diamond Resorts members

The Financial Ombudsman Service upheld two claims for a mis-sold “fractional ownership” product, one involving Diamond Resorts (Europe) Ltd, and the other was sold by Club La Costa (CLC Resort Developments Ltd). The decisions published by Financial Ombudsman Service (FOS) followed substantial investigations into the complaints that had been raised and in the main, identified how the products of both companies could have been mis-sold to consumers.

These two companies are not alone in selling “fractional ownership” products, and other resort operators are known to have sold such products, including Silverpoint (Company Participation Schemes), MGM Muthu, The Resort Group, Marriott, and Heritage.

Lincoln green solicitors timeshare claims 239210917
Lincoln green solicitors timeshare claims 565344895
Water pool at Tenerife island 504126958 3465x2310
Lincoln green solicitors work with us 589630676

Barclays Partner Finance (Clydesdale), Shawbrook Bank, and Hitachi, along with both Club La Costa and Diamond Resorts collaborated with the judicial review to challenge FOS’s decision and hence stop clients from obtaining compensation.

The key questions that FOS had asked were “was there an unfair relationship between the knowledge that the seller had, in comparison to that of the consumer?” and “was the timeshare sold as an investment?” The FOS had decided that in both instances, the answer was “Yes.”

“The ombudsmen had the full facts and circumstances, as they had found them, firmly in mind. Breaching Reg.14(3) by selling a timeshare as an investment – whether doing so explicitly or implicitly, whether in a slideshow or in a to-and-fro conversation with individual consumers – is conduct that knocks away the central consumer protection safeguard the law provides for consumers buying timeshares.
The ombudsmen held the breach in each case to be serious/substantial and the constituent conduct causative of the legal relations entered into: timeshare and loan. As such, it is hard to fault, or discern error of law in, a conclusion that the relationship could scarcely have been more unfair.
It was constituted by the acts/omissions of the timeshare companies in the antecedent negotiations leading up to the contractual commitments. Those are acts/omissions for which the banks are ‘responsible’ by operation of law. The timeshare companies and lenders clearly benefited overall thereby and the consumers, as the ombudsmen found as a matter of fact, were disproportionately burdened. No error of law appears from the ombudsmen’s conclusions in any of these respects. I am satisfied their findings of unfairness were properly open to them on this basis alone.”

The case was presided by Mrs Justice Collins Rice who is a High Court judge, and her decision was that the lenders could not appeal the losses they had sustained in these two cases, which is good news for consumers.

We have always argued that the mechanics of the product being sold are far too complex for the average person to comprehend and that many of the key components are not disclosed to the consumer at the presentation to enable them to make an informed decision about buying the product.

We are aware that the FOS is dealing with a large volume of these cases and that between the various timeshare resorts selling these products on finance, there are potentially tens of thousands of consumers that may now be able to claim compensation.

If you are a “fractional ownership” owner with Club La Costa or Diamond Resorts, or any other resort, please contact us to start your compensation claim today.

We can help you recover your money

If you have been exposed to any of the above scenarios, please contact us to start your claim today...

Call us on 0300 303 3819

Would you rather discuss your claim over the phone?

No problem… Give us a call now.

0300 303 3819
Note: Any information you send us via this form will only be used for the purposes of processing your enquiry. It will not be used for marketing purposes or sold to third parties. View our privacy policy.