Warning – The Dangers of Dealing with Cold Callers

Athena saves consumers £20,000 in a day

For several years this firm has published numerous articles warning of the dangers of dealing with cold calling entities purporting to offer timeshare termination and compensation services.  

The writer has been a solicitor for 20 years and has specialised in timeshare dispute resolution for 10 of those years and unfortunately, he has witnessed the growing numbers of unregulated claims companies operating in this sector.  This article sets out his experiences of such companies.

The Cold Callers

The internet is awash with companies offering their services.  It is not an exaggeration to say that almost all of these companies are operated by ex-timeshare salesmen.  They are unable to rely upon their reputation hence aggressively market by cold calling.  If you receive regular cold calls you should keep reading.

I would ask how such companies can lawfully acquire very specific data enabling them to know not only that the person they are calling owns a timeshare but also where they own.  The answer is simple.  For a number of years now the timeshare industry in Europe has been retracting.  A number of the sales representatives working for timeshare companies have either chosen to leave their employment or have been made redundant.  On the way out of the door they have taken with them customer lists belonging to timeshare developers and have been exploiting those lists to operate what is commonly known as a recovery fraud.  They either use the lists to identify potential victims or sell the lists to other parties looking to undertake similar scams.  

In every case the companies involved are not regulated.  The reason they are not regulated is that the individuals operating these companies have no formal legal qualifications or training and are not fit and proper persons to be regulated by the Solicitors Regulation Authority or the Financial Conduct Authority.  Solicitors and FCA regulated claims management companies are absolutely prohibited from procuring potential clients via the medium of cold calls.  Such prohibitions do not apply to unregulated businesses, but those businesses should certainly not be undertaking either litigation, which is work reserved to solicitors, or claims against UK financial institutions as such work again is reserved to either solicitors or claims management companies regulated by the FCA.  

We are frequently instructed by clients who have engaged such companies and the below are some examples of our experiences.

Monster Travel/ABC Lawyers

Monster Travel and its sister company ABC Lawyers operated in Tenerife initially purporting to offer agency services.  They would cold call timeshare owners and invite them to meetings to “discuss” their timeshare ownership.  At those meetings they were promised that if they purchased “Monster Credits” they would receive a guaranteed exit from their timeshare and financial compensation.  In every case the promises were proven to be false.  Clients paid thousands of pounds for a product that was worthless.  They were left with their timeshare and related liabilities.  

One example of such case was a gentleman who had several timeshares and paid this company £85,000 to dispose of the same with a promise that the compensation would exceed more than he paid.  Needless to say, he recovered nothing. 

Monster Travel and ABC Lawyers subsequently went into liquidation. The losses to consumers were significant, running into the millions.  This firm represented hundreds of those victims in recovering compensation from credit card providers pursuant to section 75 of the Consumer Credit Act.  To date compensation in excess of £5m has been recovered by clients represented by this firm.  Unfortunately for consumers who did not use a credit card there will be no recovery.  As is always the case with companies such as this, the money has simply disappeared and there is no regulatory body to complain to.  

The Case of Mr and Mrs D

Mr and Mrs D consulted us having previously dealt with a cold caller from a company called Aegis Direct SL.  They were told they were on an “official register” and although they thought their timeshares had been surrendered or otherwise terminated, that was not the case and they were facing substantial future liabilities.  There followed the usual Zoom meeting, and the extent of liabilities were explained to Mr and Mrs D.  Mr and Mrs D, obviously being respectable people, were terrified of the thought of being pursued for management fees. The salesmen produced a spreadsheet to illustrate potentially enormous future liabilities.  They were concerned not only for themselves but for their family.  Mr and Mrs D were told that Aegis could resolve their problems through one of their “trusted third party providers” and that their timeshares would be terminated, and they would receive compensation.  Mr and Mrs D relying on these promises paid Aegis £12,500.   For several months they heard nothing, despite chasing.  They then received a communication from Aegis’s “trusted third party provider” informing them that their file had been passed to them by Aegis to undertake termination services, but they would not be doing any work because Aegis had not paid them and that they would accordingly close their file.  Mr and Mrs D were obviously concerned and sought the services of a reputable solicitor that specialised in this area.  They accordingly contacted us.

On reviewing the history and the documentation in their possession we were able to readily identify that Mr and Mrs D in fact had no timeshare liabilities. They had been the victim of a recovery scam. Each and every one of their timeshares had either been surrendered or transferred to a third party.  A detailed opinion was provided to Mr and Mrs D to reassure them what they had been told by Aegis was in fact nonsense.  

Fortunately, Mr and Mrs D had paid Aegis by credit card and so this firm is presently assisting them in recovering the money they paid to Aegis, which would otherwise have been lost. 

The story of Mr and Mrs D is typical of who unregulated companies in this industry operate.

RSB Legal

RSB Legal were prolific scammers operating in conjunction with linked companies.  These companies were operated by individuals who formerly worked with or were associated with another scam outfit called Eze Group.  Please read the article regarding the conviction of Eze Group directors via the link below:

https://www.nationaltradingstandards.uk/news/father-and-stepdaughter-ordered-to-pay-back-over-400000/

Once again RSB Legal purported to provide legal services.  Needless to say they did not provide the promised services and simply went into liquidation leaving their promises unfulfilled and consumer creditors out of pocket.  RSB went into liquidation on 23rd May 2018.  Astonishingly, having been a prolific cold caller, the statement of affairs filed with the liquidator revealed that RSB had no assets and had lodged consumer creditor claims of £900,000.  

The Liquidator’s most recent statement of update to creditors makes interesting reading.  “At the time of my appointment I was advised that the company had 8 creditors.  It has come to light that there are more than 85 other creditors.  These creditors are all consumers”.  It goes on to say “My investigation has revealed that funds have been withdrawn by a former director in excess and can be challenged in accordance with the Insolvency Act 1986.  £240,000 has been recovered to date.  The work required was significant, involving liaising with Government Agencies to ensure that the available assets were not dissipated and negotiations with the director’s solicitors to overcome objections to the payment of funds.  A settlement was reached out of Court to avoid further delay and costs”.  

It appears in the RSB case there will be at least some payment to creditors although it will not be a full recovery as of course the Liquidator and Solicitors costs will be significant. 

Warning Signs to Look For

  • If you are cold called by an individual who knows that you are a timeshare owner, you will not be dealing with a regulated business as regulated businesses cannot procure custom via cold calling.
  • If cold callers discuss using a “trusted legal services provider” or indeed any third-party provider, you are merely dealing with an unregulated middle man, in reality a salesperson. They use terminology such as “third party legal services” or “paralegal”, because they will not be referring you to a solicitor. They will be referring you to a connected company, run of course by ex-timeshare salesmen.
  • These companies will be typically registered in Spain or the Canary Islands although some companies have been incorporated in the United Kingdom.  You can search a company’s information in the UK via the link below.  If a company has only been in existence for a short period of time and does not have significant assets and reserves you should avoid them at all costs.
  • If a lot of promises are made on the phone but they are always reluctant to put preliminary advice in writing.  A legitimate lawyer will have no concern about putting their advice in writing. This is our profession and that is what we are paid to do.  Unregulated claims companies prefer advice to be oral for obvious reasons! If in doubt, ask any company you are speaking with to put their advice in writing so that you can take independent legal advice.  You will find that they will be reluctant to do so. 
  • If you have the misfortune to deal with one of these companies, you will quickly find that all you will receive is at best generic updates.  They will tell you they are engaging with the resort, yet you will not receive a copy of letters sent.  You will still receive management fee bills with no legal argument having been made to support giving notice to terminate your timeshare.  Further, you will have received no advice.  You will not understand what legal arguments are being deployed.  Often, they will not have corresponded with the timeshare developer at all. The reason no advice is given is that of course these companies are unable to provide the promised services.  You are involved in a legal dispute where the individuals behind the company you are working with simply know no law.

How we can Help

If you have deal with or are dealing with a timeshare cold calling company, please contact us to fact check any advice you have given.

At the time of writing this article the writer spoke to three consumers during the course of the day and gave them free advice which frustrated potential frauds against them. It saved these people in excess of a combined £20,000.

If you have already engaged a cold calling company please contact us should you have any concerns regarding the termination of your timeshare or progress of any claim. Initial advice will be given without charge or obligation.

Stephen Boyd - Timeshare Lawyer

Stephen Boyd, Partner

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