Misleading Timeshare Indemnity Certificates
As discussed in our previous article on timeshare contracts, on 1st April 2019 Claims Management Companies (CMC) became regulated by the Financial Conduct Authority (FCA), thus allowing consumers appropriate redress should they be dissatisfied with the services provided. The goal of the new regime set by the FCA is it improve standards and better the professionalism within the industry. We have now seen an increase in the closure of rogue CMCs, due to how they operate.
However, despite the FCA’s new approach, there are still some CMC’s out there operating unethically. Such companies have been granted temporary permission by the FCA to continue trading. However, these particular companies are likely to come under critical observation and examination further down the line as they will receive a high number of customer complaints. Such untrustworthy companies or individuals will provide convincing documents, making their work seem professional and trustworthy. These people are what is known as ‘fake lawyers’; they claim they will terminate your timeshare contract when, in reality, they are scamming you. This is all too common in the UK, and victims to this often find themselves in more debt than they were before they even decided to terminate their timeshare contract.
Some unethical CMC’s or individuals offer timeshare termination services which are accompanied by an Indemnity Certificate. However, do not be fooled, as such ‘plastic indemnity certificates’ are worthless. These unlawful companies or individuals will write a standard letter to the timeshare resort, stating that they represent you. The letter will demand the termination of your timeshare contract; however, it will not include any reference to your legal rights. Once the CMC decides that their services are over, they will tell you that your ‘plastic indemnity certificate’ will cover you for any advancing legal costs. This is not true; you have come away still locked into a timeshare agreement. Reputable timeshare lawyers will only issue an indemnity certificate if a policy and underwritten certificate support them. Just because the CMC has provided an indemnity certificate, it does not mean your timeshare contract has been cancelled. You will need a letter from your timeshare resort to confirm this.
If you think you may have been issued a ‘plastic indemnity certificate’, or are in the process of ending your timeshare contract but are unsure of the way your CMC operates, then it is essential to consider the following:
- Question the value of the ‘indemnity’ which would cover legal costs. Establish if there are any restrictions on making a claim.
- Read your terms and conditions very carefully. How is “termination” or “exit” of your timeshare contract defined?
- What action has been or will be taken to dispose of your timeshare agreement? Will a copy of the termination letter to the resort be provided to you, which will detail the legal arguments for facilitating termination? If not, why not?
- What is the value of the company issuing such a certificate? Do they have the necessary assets (as can be ascertained by a quick check with Companies House) to cover your legal costs should you be pursued by the resort for maintenance fees?
- Have you been cold-called by the CMC or individual? The FCA does not approve such sales techniques, and they will investigate this further.
- Establish if you have an alternative means of exit. Check with your resort if you purchased an ‘exit clause’. On occasion, contracts were purchased with the inclusion of an exit policy (usually five or ten years) which will be detailed on your purchase documentation. It is essential to keep in mind that some timeshare resorts have “no-cost” exit policies which allow owners to leave due to age or ill health, make sure you research whether this applies to you.
If you feel you are a victim to such scams, please call us immediately, and we can offer advice. It is crucial to be extremely vigilant and to research when deciding who to choose to help you end your timeshare. You should always choose a professional timeshare lawyer. Here at Stephen Boyd, we have represented thousands of timeshare owners over the years, with a team of highly qualified and experienced lawyers.
If you have had dealings with a Claims Management Company and have concerns regarding the service provided, we can help. We will review your case free of charge, and ensure we fully understand your situation. If you paid the CMC or unlawful individual by credit card, we would be willing to act on a no win no fee basis in pursuing a claim against your bank/credit card provider. As part of our service, we will also assess your underlying timeshare problems and endeavour to give you the most cost-effective solution to these problems. Please do not hesitate to get in touch with us, and a member of our friendly team will advise you on the next steps to take. Email Stephen.firstname.lastname@example.org or call 0161 839 8847 today.