Bindi Shah only found out that she can’t get out of the 71-year Classic Holidays timeshare scheme she signed up to in 2014 when she recently called to ask.

The curt response from the Classic Holidays consultant was a far cry from how the whole thing started. She was handed a scratch-and-win card at a shopping mall that promised a free holiday as long as she attended a Classic Holidays timeshare seminar in the Sydney suburb of Parramatta.

There she was effusively promised discounts of up to 50% on accommodations around Australia. All she had to do was pay $22,000 up front to join the scheme, which she did, and then pay the annual fees. These have gone up steadily and now come in at around $3000.

The program seemed to deliver what it promised at first, though the 50% discounts never came through and the complicated points system made it impossible to know if she was really getting a bargain. Now Bindi, who is 63, is sure that not using the scheme is more cost-effective than using it, even though she has to keep paying the fees.

“In recent years, we have consistently found accommodation prices through Classic Holidays to be higher than those offered by public online travel platforms such as Booking.com,” Bindi says.

“Plus, the scheme’s restrictive cancellation terms compare unfavourably with the flexible 24‑hour cancellation options commonly available elsewhere.”

“Not only is it more expensive, but there are all these restrictions and conditions. There’s no flexibility at all. The value proposition of the scheme has deteriorated significantly.”

Bindi’s understanding is that her scheme runs until 2085 – far longer than she’d like to keep it. But when she recently contacted Classic Holidays to cancel it, she was shocked to learn that she couldn’t. This came as news to her. It would mean an additional $177,000 in fees by the time the scheme comes to an end, and that’s only if they stayed at $3000 a year, which is unlikely.

“Nowhere in the contract anywhere can I find that you can’t cancel,” Bindi says. “And when we originally signed up, there was no explanation that there was effectively a no exit clause for the membership.”

Regulations only go so far

This story of being stuck in a timeshare scheme is just one of many that ����Vlog has reported on. We also surveyed 351 timeshare members in 2021, around 30% of whom said they would have liked to cancel their membership but couldn’t.

In 2018 we handed a Shonky award to Marriott Vacation Club, a 40-year timeshare scheme whose costs for a one-week booking per year were 938% more over the life of the contract than similar accommodations available on online booking sites.

Marriott’s scheme may have been the worst of the bunch at the time, but we also pointed out that the value for money propositions from other timeshares schemes – including Accor Vacation Club, Classic Holiday, Ultiqa Lifestyle, Wyndham WorldMark South Pacific Club – were also extremely poor.

A timeshare scheme is a financial product and operators need to have a financial services licence, which all the major ones do.

It’s a credential that would seem to confer a sense of above-board legitimacy, but timeshare schemes operate on the dark fringes of the financial sector. Nonetheless, they are regulated by the Australian Securities and Investments Commission (ASIC), which has taken steps to provide better protections for timeshare customers in recent years. ����Vlog was involved in the consultations leading up to these changes.

In 2020, for instance, ASIC imposed new rules around fee transparency and hardship support. The regulator also made it mandatory to let prospective members know both in writing and verbally how these complicated schemes actually work and the risks they involve.

����Vlog has lodged five official complaints with ASIC about timeshare schemes since 2016. In 2021, we lodged a “super complaint” to ASIC, alleging at least eight industry-wide breaches of financial services laws.

But regulations only go so far when the deal is financially unsound to begin with. ASIC makes clear that two of the most concerning conditions of these schemes – that the only way to get out of one is by selling it, and that they pass on to your children – are enforceable, though the Classic Holidays contracts that ����Vlog has reviewed don’t contain these terms.

Passing it on to her children

Bindi has tried to persuade her children to use her Classic Holidays bookings, but they say it’s much easier and cheaper to just book directly with the property or through an online booking service. They don’t want any part of Classic Holidays, even though they’re apparently due to inherit the scheme along with the annual fees. This is a condition that timeshare members discover when they try to exit a scheme. It is not included in the Classic Holidays contracts that we’ve reviewed.

It has also been widely reported that timeshare schemes are very difficult to sell, but that wouldn’t be an option for Bindi anyway.

“The Classic Holidays consultant suggested that I could use one of their brokers to sell the membership for a fee. I told him that I felt it would be unethical to sell the scheme to someone else,” Bindi says.

“If they had said, ‘you know, you won’t be able to get out of this’ from the beginning, then we might have thought twice about it. How can you have someone having a managed scheme where there is no way out? It’s just unethical.”

We asked Classic Holidays to provide examples of documents provided to members saying they can’t exit the scheme and explaining that it goes into a member’s estate upon their death. We didn’t get a response.

Facts you need to know about timeshare schemes

• Timeshare operators are required to be members of the (AFCA). If you feel you’ve been misled by a timeshare operator, lodge a complaint with AFCA.
• If you’re in financial hardship, ASIC regulations allow timeshare operators to release members from schemes in cases where the scheme constitution permits hardship withdrawals.
• If the timeshare operator has arranged finance for the initial lump sum membership payment ($22,000 in Bindi’s case), you can cancel the scheme even after the cooling off period if the loan has not yet been provided.
• In 2022, the Federal Court found that the timeshare scheme Ultiqa breached financial advice laws by failing to take the best interests of target customers into account and leading them into schemes they couldn’t afford. If a timeshare scheme has arranged finance for your membership, you may be able to challenge whether the advice you received was appropriate for your circumstances. 
• If you’re trying to sell a timeshare scheme, be particularly wary of scammers posing as brokers or resellers. 

The post She’s 63 and wants out of her timeshare, but she’s locked in until 2085 appeared first on ����Vlog.

It’s just after 10pm on a cool Friday night in March and Allen MacDonald is getting nervous.

He’s just spent 40 minutes driving up and down a quiet street in Point Cook in the outer suburbs of Melbourne.

“I [was] starting to get a bit anxious, because it’s now 10ish at night [and] there’s just no one around,” he recalls.

He’d travelled down from Sydney earlier that day, considering himself lucky to have snagged somewhere to stay close to the popular Avalon airshow.

“You can’t get accommodation for kilometres. This popped up, so I thought: ‘Great!’,” he says of finding the Point Cook Landmark Coastal Wetland Park Villa listed on popular reservation site Booking.com.

In hindsight, there had been red flags, including no reviews left by previous guests.

But Allen’s problems only really began when, sitting in his hire car preparing to drive to the property, he took a closer look at his booking confirmation.

“All I had was the name of the street, there was no actual address to set my GPS to go to,” he explains.

Believing he might find a property with accommodation signage or someone waiting to meet him (the owner had only days before approved his request for a late check-in) he forged ahead.

But all he found was a dark street lined with anonymous suburban homes.

“I thought I’d missed it the first time, so I turned around and went back again. I just drove up and down two or three times thinking: ‘Well, this isn’t good’.”

Local example of a global problem

The platform Allen had used to secure his miracle-turned-nightmare stay, Booking.com, has a history of promising great deals that vanish into thin air.

We’ve previously highlighted how scammers the world over have taken advantage of platforms like Booking.com that let regular people turn their homes into accommodation businesses.

����Vlog’s UK sister organisation, Which?, last year said it had heard from hundreds of Booking.com customers who’d turned up to accommodation they’d paid for, only to find it didn’t exist.

The ABC has reported cases of the same con being pulled here, leaving travellers stranded in unfamiliar locations without anywhere to stay.

Allen believes the villa he paid almost $160 for in advance and then spent almost an hour searching for, was one of these fake listings.

He’s not alone. At least three other Booking.com customers appear to have fallen foul of the same listing in recent months, leaving negative reviews labelling it a scam and claiming it doesn’t exist.

Seen or been affected by a scam more people should know about? Email the author.

Villa listing stayed online despite concerns

When ����Vlog visited the property’s page on Booking.com, it had several common hallmarks of a fake listing scam.

These included negative reviews accusing the listing of being a scam and confusing, poorly-worded supporting information. The listing had no positive reviews.

But the biggest red flag is that while contact details are provided to guests, all calls and messages to the phone number and email address provided go unanswered.

In the ‘About’ section of its listing, the villa claims to have a 24-hour front desk.

But when he was scouring streets, Allen says he tried calling and messaging the mobile number included on his booking confirmation multiple times, getting no response.

Messages to the property owner via a listed email address and the Booking.com chat function also went unanswered.

����Vlog also found the property’s promise of round-the-clock service lacking – when we tried to call the number Allen was provided, it didn’t connect and emails to the address elicited no response.

Even Booking.com itself has struggled to get a response out of the property.

Two weeks after Allen first alerted the company to his issues with the property, Booking.com admitted to him that it also couldn’t contact the person responsible for the listing.

For Allen, the fact the platform then continued to host the property and allow people to book it beggars belief.

“I’m gobsmacked. I don’t understand,” he says. “I would rate [Booking.com] as a trusted platform…to have this going on is really disappointing and I think it damages their brand”.

The property remained on Booking.com for over a month after Allen first shared his concerns with the company about it being a scam.

It could also be booked through Singaporean travel site Trip.com until earlier this month, when its listing was suspended after ����Vlog contacted the platform.

When it was still live on both sites, the property also featured in Google AI overviews of homestays in the Point Cook area.

The battle to get a refund

After giving up on his search for the property, Allen managed to find last-minute accommodation in a nearby hotel.

He sent a message to Booking.com two days later, alerting the platform to his issues with the property and requesting a refund of the sum he’d paid ahead of his stay.

Booking.com representatives initially suggested they may be able to reimburse him this and “any extra costs”, such as the backup accommodation.

However, within days, the company was walking this back, saying Allen had taken too long to contact its representatives.

In the same email, Booking.com admits it also hadn’t been able to reach the person responsible for the listing.

Allen says he tried to contact Booking.com on the night he was searching for the elusive villa, but couldn’t find a straightforward way to reach the platform.

Booking.com responds

Booking.com didn’t respond to our suggestions that it’s difficult for customers to contact, but told ����Vlog the Point Cook property had previously provided guests with successful stays.

However, none of these people left positive reviews on the listing’s page.

Following our queries, Booking.com stopped taking bookings for the property as a “precautionary measure”.

The company says it has “robust security measures” in place to protect guests and takes “the process of verifying accommodation listings extremely seriously”.

After earlier refusing a refund, it also eventually credited Allen’s account with the $159 he had paid for the Point Cook property, as well as some of the amount he spent on his last-minute hotel stay.

With regards to why the listing remained live after Booking.com said it couldn’t contact the owner, ����Vlog understands it’s not company practice to immediately remove listings if the person responsible isn’t responsive to attempts by Booking.com to reach them.

How to spot a fake accommodation listing

1. No reviews or only negative reviews: Check the latest feedback from other travellers. Fake listings often have an overwhelming number of reviews alleging the property doesn’t exist no reviews at all.
2. Unusual photos: Beware of listings with photos that all seem to be taken from other sites. Do a reverse image search to see where else images are being used.
3. Unclear descriptions or instructions: ‘About’ sections may be poorly worded or use unusual terminology, such as miles instead of kilometers.
4. It’s only been listed for a short time: Booking platforms work to take down fake listings. Beware of suspicious listings that have only been live for a short time.
5. Attempts to take you off-platform: Be sceptical if the vendor tries to direct you off the platform (onto private messaging apps, for example), especially when it comes to payment.

The post Is this Victorian holiday villa a total scam? appeared first on ����Vlog.

When Chris went on a family holiday to the Netherlands to visit relatives late last year, accommodation had to be arranged for his 75-year-old mum. With over five million potential places to stay around the world and gazillions of bookings on record, Airbnb seemed like the right choice.��

Chris and his family ended up plunking down around $6832 for a three-week stay in the small town of Haarlem, in an accommodation that came across as appealing on the Airbnb profile.��

Upon arrival, the difference between online appearance and reality was stark.��

“When my mother turned up at the property it was nothing like described,” Chris says. “Instead of being a quaint comfortable residential premise, it was a disused shopfront that had been converted to accommodate Airbnb guests. It had cameras inside and outside, exposed wires everywhere, a toilet within a makeshift kitchen, blood on the bedsheets of the cheap beds that had been installed, and a few other items of broken and filthy furniture scattered throughout.”

There was also a list of rules posted inside the accommodation that stipulated that if the property was used for drugs or sex work there would be extra fees.�� 

The place was all but uninhabitable, but his mum had no choice but to stay for one night before casting about for other options.��

When the Airbnb host was contacted and informed of the situation, they were apologetic but offered only a partial refund. Chris and his family refused the offer and instead filed an official Airbnb complaint – which included photos detailing the squalor of the accommodation.��

“Airbnb replied a few days later insinuating a full refund would be issued along with an apology,” Chris says. “Based on this representation, my mother took up a hotel for the three weeks, but her trip was ruined. A few days later, Airbnb refunded half the full amount. When challenged as to why only half was refunded they refused to elaborate.” 

Chris’s mum had paid for the hotel with money she assumed would be replaced by the Airbnb refund.

Texas disputes team says ‘take it or leave it’

At this point, Chris went into action on the Airbnb support line, refusing to cave in.��

“Eventually, after huge efforts, I was contacted by someone from the disputes team of Airbnb in Texas. They said they will not be providing any further explanation and told us not to contact them again, in as many words.” 

Chris is sure he and his family are not the only victims of Airbnb’s poor customer service. Chris says it’s as if Airbnb’s policy is to “just pull up the drawbridge and not communicate or assist consumers”.��

Market researchers estimate Airbnb’s 2024 revenue to have been around $US11 billion, with somewhere around 490 million bookings worldwide. But its perceived worth on the capital markets far exceeds its revenue or actual assets, coming in at approximately $83 billion. This company has considerable resources, but how much they put into customer service is open to question.��

In the end, Chris’s mum was out of pocket around $2294 dollars.��

“All attempts to reach Airbnb and request an explanation as to why they had done this were met with automated chatbot responses and a complete cessation of communication,” Chris says. “It was genuinely quite bizarre, to be frank.” 

Full refund provided following ����Vlog involvement 

We contacted Airbnb in early March to discuss this case and were told that its “host reliability standards” require accommodations to be clean and free of health hazards, among other things.��

Susan Wheeldon, country manager for Australia and New Zealand, tells ����Vlog that Airbnb has reconsidered Chris’s case following our contact.��

“Issues like this are rare, but when they do happen, we take them seriously,” Wheeldon says.”In this instance the guest was initially provided with a partial refund and following a further review of the circumstances a full refund has been provided.”

The post Airbnb challenged over partial refund for dud property  appeared first on ����Vlog.

Plus our well-travelled staff weigh in with their own advice on searching for accommodation,finding the best price, ways to get extra perks, and more.

1. Don’t stick to one booking site 

Use several comparison websites to get a feel for pricing in the area you’re looking to stay.

These websites won’t always give you all the accommodation options, and the top listings won’t necessarily be the best deals available – they’re often accommodation providers who’ve paid extra to have their listings prioritised.

Booking sites are useful for research and to get a feel for prices and locations, but take their suggestions with a grain of salt.

And don’t forget to check sites like TripAdvisor and Google reviews so you can hear about real people’s experiences of the accommodation and see unedited photos of the rooms and facilities before you make up your mind.��

For Airbnbs and homestays, check other platforms like Stayz to see if they’re cheaper there.��

“Take a look to see if the Airbnb has an Instagram profile,” says ����Vlog audience and engagement editor Pru Engel.

“They’re a good place to see more photos of the house, and sometimes they offer specials through their social media, so you can pick up a cheaper deal that you might not find elsewhere.”

2. Go undercover to search

Your digital footprint can work against you when it comes to booking accommodation. Some sites can recognise what you’ve been searching and change their prices for areas and hotels that you’re interested in.

It’s called dynamic pricing or personal price hikes, and it’s allegedly a common online marketing method. It seems unfair and a little creepy, but it happens.��

The best way to beat them at their own game is to use ‘incognito’ mode when you’re searching so they can’t track you.��

You can also use different browsers and clear your cookies when you’re cross-checking prices to make sure you’re looking at the best price possible, not one that’s tailor-made based on your search history.��

“Always cross-check prices on separate internet browsers (or clear cookies) and compare prices between comparison sites and booking direct with the hotel,” says Tom from the ����Vlog marketing team.

Read more on how to avoid personal price hikes.��

3. Hit up the hotel for a better price

Once you’ve found a good price, contact the hotel directly to ask if they can beat it. They may have special deals or sales that the booking sites won’t show you.

Booking platforms charge them (and you) a fee when you book, so they’re often happy to give you a cheaper rate if you’re cutting out the middle man.��

Some travellers have even scored a free room upgrade as a thank-you for booking direct.��

“Recently, I used LastMinute.com.au to check availability and options in the area, but then found that booking directly through the accommodation’s website saved a significant amount,” says ����Vlog staffer Andrea.��

“Glad I checked their website first before completing the LastMinute booking form!”

4. Cash in your points

Make the most of systems like hotel loyalty programs or credit card points – you may be able to access special deals and use points to pay for your accommodation.��

If you’re booking directly with the hotel but you’re not a member, you may be able to sign up as you book to take advantage of their discounts and perks immediately.��

Some hotel chains also offer perks such as late checkouts and free upgrades, free Wi-Fi or parking to their members.��

Hotel chains often have different levels of hotels, from more basic through to luxury. Going for the less-luxe option will make your points go further.

“My husband travels a bit for work. He is a Marriott member, so he always books Marriott hotels when he travels for work and he earns points,” says ����Vlog editor Rachel.

“This means when we travel as a family we can use points to book accommodation.��They have a big range of hotels at different levels, so we can choose the cheaper range so the points go further.”

5. Be the first to know

Join booking sites’ mailing lists or member programs (they’re often free) to access early bird specials and other discounts. (Just be aware of how much data you’re consenting to them collecting.)

If you’re flexible on travel times, keep an eye on hotel websites and booking sites for sales so you can jump on a good deal when you see it.��

You can set alerts on some sites so you’ll be notified when there’s a hot deal going at your favourite hotel or holiday destination.

“I’ve joined to get Genius Level pricing on Booking.com, and often their prices are actually less than the hotel website,” says Andrea.

“Another tip is to check if there’s an option to use a promo code for a cheaper price – then use Google to find a code for that platform. I just saved $50 on Agoda doing this,” says Uta, a health insurance expert with ����Vlog.

6. Hedge your bets with free cancellations

Look for accommodation options that offer free cancellations (but remember to read the fine print!). That way, if you find a better deal elsewhere before you travel, you can jump ship with no financial loss.��

Just bear in mind that even though you won’t be out of pocket, the accommodation provider could be. This isn’t so much of an issue with large hotel chains, but smaller operators could be significantly impacted if they can’t re-book the room.��

Last-minute cancellations can cut both ways, though: if the accommodation provider pulls the pin at the last minute, your careful holiday planning could be thrown out the window. That can mean you’re stuck paying a higher price or settling for a less ideal location or room type if you have to book something else on the fly.

“The downsides of booking with Stayz and Airbnb private hosts is that they can cancel your booking even at the last minute with few repercussions,” says Pru.

“For this reason, I religiously read reviews before booking anywhere.”

The post Booking secrets to help you get the best accommodation deals appeared first on ����Vlog.

But over 2000 Airbnb customers noticed they had paid a lot more than expected and let the ACCC know.

After the regulator took the accommodation booking behemoth to court, Airbnb agreed late last month to refund $15 million to about 63,000 Australian customers who thought they had paid in Australian dollars rather than US greenbacks.

Airbnb will pay another $15m in penalties for the misleading conduct.

What did Airbnb do wrong?

“Consumers were misled about the price of accommodation, reasonably assuming the price referred to Australian dollars given they were on Airbnb’s Australian website, searching for accommodation in Australia and seeing a dollar sign,” says ACCC chair Gina Cass-Gottlieb.

“By paying in US dollars, these consumers were charged more than they expected to pay, and were deprived of a chance to make an informed decision about whether to make the booking because of this misleading conduct regarding the price.”

Being misled by an overseas digital business is hardly a new experience for many Australians, but it would be nice to think that high-profile companies like Airbnb wouldn’t allow things like this to happen.

 “We took this case to send a strong signal to large digital platforms like Airbnb that they must comply with the Australian Consumer Law and not mislead consumers,” says Cass-Gottlieb.��

How do I get an Airbnb refund?

Airbnb has 45 days as of 20 December 2023 to contact affected customers and explain how to get their money back.

The average compensation per customer is expected to be about $230, but the amount will vary depending on the cost of the booking, the exchange rate on the day and any charges paid to Australian financial institutions as a result of paying in US dollars.

It’s supposed to work like this:

• Affected customers will be contacted by Airbnb and Deloitte Australia – which is administering Airbnb’s compensation claims program – by 5 February 2024.
• Consumers will receive an initial communication from Airbnb via email and text message by that date, inviting them to log on to their Airbnb account.
• Affected customers will then be able to access the Deloitte claims portal via a link in their Airbnb account.
• Compensation will be the difference between the price a customer expected to pay in AUD and the price they actually paid due to the USD/AUD exchange rate, plus any foreign transaction fees.

Hang up on scam calls 

In a turn of events that will surprise nobody, scammers are already cold calling people and offering to arrange Airbnb refunds, presumably by having the customer – if they were one – reveal their personal banking details.

Such information should only be provided through the Deloitte claims portal, accessed from an official Airbnb account.

The ACCC’s advice regarding the Airbnb refund scam is straightforward.

“If you receive a call from anyone offering to help you with a refund, hang up immediately. Never give personal information to anyone calling you out of the blue and never give access to your computer or bank account and never click on a link in a text message or open an attachment in an email if you were not expecting the text or email.”

The post Airbnb to refund $15m after charging Australians in US dollars  appeared first on ����Vlog.

On this page:

• Tips for hassle-free accommodation
• Your rights on holiday
• Travelling overseas?
• Accommodation trouble-shooting guide

No one wants their hard-earned holidays ruined by hotel booking dramas or a room that doesn’t pass muster. So what rights do you have if things don’t go to plan with your holiday accommodation?

Tips for hassle-free accommodation

• Look at the terms and conditions of the company you’re booking with and find out if there are any penalties if you decide to cancel (see trouble-shooting guide below for more details).
• Paying by credit or debit card can provide you with added protection in the form of chargebacks, but be wary of additional fees.
• Book your travel insurance at the same time as you book your accommodation, as policies may cover unforeseen cancellations.
• Find out if there’ll be any extra potential costs, such as if the business charges for Wi-Fi or for parking.
• Specify at the time of booking any additional requirements you may need, such as a quiet room or a cot for your child.

Your rights on holiday

When making a reservation to stay somewhere, most of your entitlements will be outlined in the accommodation business’s terms and conditions.

But in all cases, the also backs you up with certain rights when you purchase goods and services like accommodation, and these can’t be taken away by business contracts.

This law entitles you to remedies when something goes wrong with your accommodation, protects you against unfair contract terms and is applicable for travel within Australia or purchases made from businesses within Australia, such as a local travel agent.

Your ACL consumer guarantees require that accommodation services (including Airbnb) be provided:

• with due care and skill
• so that they are fit for any specified purpose
• within a reasonable period of time (if no time was set when booking).

In addition, the hotel or accommodation itself must:

• be safe and of acceptable quality
• match the description provided when you booked it
• be advertised in a manner that is not false or misleading.

Travelling overseas?

While the ACL protects you within Australia, if you’re booking accommodation or travel with overseas companies, your entitlements will be dictated by the consumer regulations in that jurisdiction.

This list of resources from our sister consumer organisations in the UK, New Zealand and the US will tell you how to tackle common holiday hiccups and inform you of your rights in each country (luckily, most are similar to those we have here in Australia).

United Kingdom

New Zealand

United States

Accommodation trouble-shooting guide

The post Holiday accommodation and your rights appeared first on ����Vlog.

In the wake of a May 2022 federal court decision that found holiday timeshare scheme provider Ultiqa violated financial advice laws, the business has now been slapped with a $900,000 penalty in a case brought by the Australian Securities and Investments Commission (ASIC).��

“Ultiqa prioritised sales over appropriate advice and ultimately consumers’ best interests,” says ASIC deputy chair Karen Chester.

“The penalty against Ultiqa, the first against a timeshare provider, sends a further significant message to the timeshare industry. When sold alongside financial advice, it is both fundamental and legally required that the advice is in the consumers’ best interests.”

Five official complaints to the regulator 

����Vlog has lodged five official complaints with ASIC about timeshare schemes since 2016.��

In 2021, we lodged a ‘super complaint’ to ASIC about the industry as a whole, alleging at least eight industry-wide breaches of financial services laws.

In the May 2022 ruling, the court held that Ultiqa had failed to act “efficiently, honestly and fairly”, in part by not properly supervising its sales staff, who often relied on pressure tactics to sign up customers.��

The sales tactics were, in effect, a form of financial advice – advice that was often inappropriate to the customer’s financial circumstance.

An Ultiqa sales manual that came to light in the May case instructed that if prospective customers indicated that they wanted to leave the sales seminar, salespeople should “do everything you can do to amuse, interest, excite, relax, humour, flatter and if necessary cajole your clients into staying”.

‘They got nothing for their money’ 

Most Ultiqa customers took out loans from a company affiliated with the timeshare provider to pay for their schemes. Upfront costs ranged from $10,000 to $25,000, with ongoing yearly fees of up to $800.

“Despite these significant costs, many could not even book holidays in their timeshares due to a lack of availability – meaning they got nothing for their money,” says Chester.

Many timeshare schemes keep customers locked in contracts lasting as long as 99 years, with no means of escape.

In May 2021, we published the results of a survey that indicated widespread dissatisfaction among timeshare members.��

Seven in 10 of the 351 members we heard from said their long-term schemes would pass on to their children, who would then be stuck with the yearly fees. Almost one in three said they’d like to leave their schemes, but couldn’t. A further one in 10 said they were thinking about leaving.

����Vlog welcomes decision

“We welcome the decision of the Federal Court, which highlights the predatory sales practices of the timeshare industry,” says ����Vlog head of policy Patrick Veyret.��

“The industry is founded on pressuring people into expensive and lengthy schemes which are incredibly poor value. The timeshare industry is now on notice. It must clean up its harmful sales practices or face further regulatory action.”

The post Ultiqa timeshare scheme hit with $900K penalty for violating financial advice laws  appeared first on ����Vlog.

Pressure sales tactics have long been standard procedure at holiday timeshare seminars, with attendees pushed to sign up on the spot, hand over up to $25,000, and commit to hefty yearly fees.

Many come to regret falling prey to the timeshare hard sell, and end up stuck in schemes they don’t want and can’t use. Some are locked in for up to 99 years and will see their schemes pass on to their children.

����Vlog has been exposing deceptive practices in the timeshare industry since 2016. Since then, we’ve lodged five official complaints with the Australian Securities and Investments Commission (ASIC), alleging unlawful conduct in the industry.

‘Super complaint’

In 2021, we lodged a ‘super complaint’ to ASIC, alleging at least eight industry-wide breaches of financial services laws. (A super complaint highlights a longstanding systemic issue within an industry.)

At the same time, we published the results of our timeshare customer survey, based on the input of hundreds of timeshare members – a significant portion of whom said they wanted to exit their schemes but couldn’t.

Verdict – Ultiqa breached financial advice laws

One of our earlier complaints to the regulator focused on the quality of financial advice given by salespeople for the timeshare scheme Ultiqa Lifestyle.

ASIC followed up and has now won a case in Federal Court against Ultiqa Lifestyle Promotions, the part of the business that set up financing for new members.

The Court found that Ultiqa salespeople breached financial services laws by failing to make sure the advice they gave prospective timeshare members was in their best interests.

ASIC hails ‘important decision’

“This is an important decision for consumers and ASIC’s first financial advice action against a timeshare provider,” says ASIC deputy chair Karen Chester.

“Pressure sales tactics used, and even documented in their sales manuals, encouraged sales agents to ‘corner’ consumers into investing in a timeshare scheme that many could not afford.��

“Despite paying tens of thousands of dollars in upfront costs and ongoing fees, many could not even book holidays in their timeshares due to lack of availability – meaning they got nothing for their money.”

Ultiqa sales manual: ‘Do not let them leave’

During court proceedings, sections of the sales manual used at Ultiqa’s timeshare seminars came to light, offering a glimpse into a sales culture that characterises the industry as a whole.

One section reads: “Once your client is on the Sales Deck they come to the grim realisation that this is a sales environment and what is going through their mind is ‘How can we get out of here?’, and, if you give them the chance, they will. DO NOT GIVE THEM THE CHANCE! Do everything you can do to amuse, interest, excite, relax, humour, flatter and if necessary cajole your clients into staying.”

Many who stayed and signed up are still looking for a way out of their schemes, with no help from their timeshare providers.��

Timeshare industry ‘now on notice’, says ����Vlog

Based on our ongoing research and investigations, the findings against Ultiqa highlight common practices.

“These sorts of practices are rife across the timeshare industry, so this decision sends a huge warning to other timeshare salespeople and operators,” says ����Vlog CEO Alan Kirkland.

“The timeshare industry is now on notice. Its sales practices and contract terms need to change – otherwise operators should expect more court action.”

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The Australian Securities and Investment Commission (ASIC) has taken legal action against timeshare scheme Ultiqa Lifestyle for providing financial advice that went against the best interests of its members.

It’s the first time the regulator has started civil penalty proceedings against a timeshare operator for offering advice that was inappropriate to the recipient’s circumstances.��

ASIC deputy chair Karen Chester says, “The timeshare industry is on notice to ensure existing compliance and advice practices comply at all times with the obligations on all financial advisers.”

From October 2017 to March 2019, authorised representatives of Ultiqa sold people into schemes with upfront costs from $10,000 to $25,000 and ongoing fees of up to $800 per year, according to ASIC.

Many members didn’t know what they were getting into.

“Timeshare schemes are complex financial products,” Chester says. “They can be difficult to understand and compare with other products, and involve long-term financial commitments. Consumer harm can [result] and has resulted when consumers are not aware of the upfront costs, ongoing fees or the nature of their investment – like how easy, or not, it is to exit [the scheme].”

ASIC also alleges that Ultiqa’s conduct amounted to a breach of its obligations as an Australian financial services licensee to act “efficiently, honestly and fairly”.

‘Many potential breaches of law’

“Since 2016, ����Vlog has written five complaints to ASIC about potentially illegal conduct within the timeshare industry,” says ����Vlog director of campaigns Erin Turner.

“����Vlog has observed so many potential breaches of law that we question whether the timeshare industry should be allowed to operate with existing business practices.”

In 2017, ����Vlog filed a complaint with ASIC after Ultiqa pressured a couple into purchasing a timeshare contract with finance that could have lasted until 2081, despite the individuals telling the operator they were financially stretched.

In May this year we reported that 70% of the 351 timeshare members we surveyed said their long-term schemes will pass on to their children, who will have to pay the yearly fees.

Almost 30% said they’d like to leave their schemes but can’t, and another 12.5% say they’re thinking about leaving.

In late October we reported that Classic Holidays, Accor Vacation Club and Ultiqa had elected not to extend the right of hardship relief to their members.

“Timeshare salespeople are providing financial advice,” Turner says. “That means they have a legal obligation to act in the best interest of their customers. Despite this, timeshare operators typically only recommend one product – their own.”

Although Ultiqa stopped selling interests in January 2020, the scheme remains active.

The post ASIC takes timeshare operator Ultiqa Lifestyles to court  appeared first on ����Vlog.

Major holiday timeshare providers Classic Holidays, Accor Vacation Club and Ultiqa have elected not to extend the right of hardship relief to their members. Their decision forces people trapped in their schemes to continue paying fees for a service they don’t want and can’t use.

Hardship relief would allow timeshare members to get out of schemes in cases of permanent job loss, ongoing financial hardship or illness. (Without adding the ASIC definition to their constitutions, schemes may still allow hardship relief on a case by case basis, but it won’t be mandatory.) 

But being let out of a long-term legacy timeshare scheme for hardship reasons can only happen if the member’s interest is sold to someone else, a difficult proposition at all times and a near impossibility in the current COVID-19 climate.��

Tough market behind operators’ decision

Due to an exemption from ASIC regulations, the boards of some timeshare schemes, particularly long-term legacy schemes, have the option of not amending their constitutions to include hardship provisions.��

Classic Holidays, Accor Vacation Club and Ultiqa all sent notification to their members in recent weeks saying the respective timeshare boards had voted not to extend the hardship option because, in effect, they wouldn’t be able to find new members.��

“Classic is not currently selling interests in the Club and does not anticipate it will commence reselling interests in the Club in the foreseeable future,” Classic Clubs Limited (the responsible entity for Classic Holidays) says in its notice.��

Accor Vacation Club’s notice says the scheme “has determined, based on existing trends and a decrease in demand for timeshare products, that the responsible entity is likely not capable of achieving the resale of memberships in a timely fashion at the same rate that members may seek to withdraw from the club”.��

Ultiqa Lifestyle told ����Vlog in a statement that it “has elected not to change the constitution to incorporate hardship arrangements but does have a robust hardship policy in place and is happy to work with our members if at any time they suffer hardship”.

(In February 2020, Ultiqa stopped selling new members into the scheme, saying “the current economic environment, compounded with proposed regulatory changes, means that it is no longer viable to continue sales activities.”)

Members disappointed, but not surprised 

Under ASIC guidelines, the schemes had until 30 September 2021 to make that decision and communicate it to affected members.

Many of the affected members we’ve heard from are not happy about their scheme’s decision, or surprised.��

One Classic Holidays member, who recently ended his membership, simply told us, “I am not surprised they are taking steps to close off the hardship option.” 

Another Classic Holidays member says, “My husband and I have owned the timeshare since 1988 and now wish to conclude our membership. We are no longer able to travel due to health reasons. We are 80 and 76 years old. We have refused to pay the fees for the last four years and do not want to be involved with this company. We are prepared to give it away for no remuneration.” 

An Ultiqa member says, “We received the letter and were quite pleased when the first paragraph said they were going to help, but further paragraphs said no. As usual they are very determined not to help in any way.” 

We also heard from a number of Accor Vacation Club members.��

“Accor acknowledges that there is a distinct lack of interest in buying timeshares, particularly during COVID,” one member told us. “It therefore sees the solution is to deny any help to people who are unable to continue with the membership for financial or other reasons and continue to demand that they pay their annual membership fee.” 

Another Accor member who’s unhappy that hardship relief is off the table says, “We would like to escape but believe it is not possible.”

Accor to let members’ children off the hook 

With the schemes electing not to add a hardship relief clause to their constitutions, we asked Classic Holidays and Accor to outline any relief that may still be available to members in hardship circumstances.��

Classic Holidays declined to answer the question.��

An Accor Vacation Club spokesperson told us “we will continue to discuss any extenuating circumstances of health or financial hardship, and review any relief available to such members, on a case by case basis”.��

“After listening to feedback from our members and their concerns regarding passing on the obligation and rights of the membership to family members upon death, we have changed the club constitution to remove the responsible entity’s discretion to cancel memberships upon request following the death of a member. This therefore allows the beneficiary of a membership to decide whether or not they wish to continue with the membership,” the spokesperson added.��

In other words, while current members are stuck in their schemes regardless of any hardships they may face, Accor can no longer force the children of members to keep paying for the scheme after their parents die, according to the company.

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