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Why can't all timeshare companies be like Marriott?

As more victims of timeshare companies are awarded large amounts of compensation, it looks like at least one major timeshare company is deciding to deal with the big problem of illegal contracts, according to the Marriott Vacations Worldwide 2021 report.

An unimpressive history

The timeshare industry in Europe hasn't exactly enjoyed a stellar reputation over the years. A few decades ago, it was a common sight to see touts from the companies approach holidaymakers heading to the beach to encourage them to sign up to timeshare deals.

The industry was also associated with celebrity gangsters who used high-pressure sales tactics to launder their money in Spain, the Canary Islands and Portugal. In the end, hundreds of thousands of people signed up to expensive contracts, and their stories were regularly reported in the newspapers.

After years of this, something had to be done, and Spanish authorities finally took action. They introduced new laws designed to protect tourists, no doubt worried about the negative impact it was having on the country's tourist revenue.

New laws provide protection

The laws stated that anyone signing up for a timeshare deal on January 5th 1999 and after would no longer be able to sign up for anything with a longevity of over 50 years. Point-based memberships were banned, as were floating weeks. Timeshare companies were also banned from taking any payments from customers during the Cooling Off period.

People should have been able to avoid being pressured to make significant financial commitments after the laws were introduced. However, plenty of timeshare companies ignored the laws, worried no doubt about losses they would face if they chose to play according to the rules.

It's also likely they felt protected to a certain extent by the problem with Spanish bureaucracy. Things often do not happen quickly or efficiently, and the decision makers in timeshare companies knew that when the law caught up with them, they would be long gone.

The first victory

It was in 2016 that a Norwegian member of Canary Islands based Anfi finally sued the company and was awarded the significant sum of €40,000.

This was followed by many more successful cases, and the law firm of timeshare lawyers, M1 Legal, has been obtaining big wins for its clients ever since. Victims of timeshare companies have now received hundreds of millions of euros in compensation. The tables have finally turned.

Some of the largest timeshare operations, including Silverpoint, Diamond Resorts Europe, Azure and Club La Costa first stopped their sales operations and then filed for bankruptcy or declared themselves as insolvent.

The average compensation award is over £20,000, according to M1 Legal. The firm also has a high success rate of 98.6% in the cases where it takes on timeshare companies.

Timeshare companies still fighting back

While progress has been made, many lawyers working for timeshare companies continue to do what they can to help the resorts delay the justice process. They have not admitted any liability, and they have continued to use a variety of tactics to delay cases.

Andrew Cooper, CEO of European Consumer Claims (ECC), says: "These were tactics that everyone knew would fail, including the timeshare companies themselves. M1 legal, ECC's associated firm of lawyers, have been diligently working to overcome these delays one at a time. Each tactic defeated smooths the way for future claims, as that excuse is no longer valid. We are reaching the point now where even the most inventive timeshare company lawyers are struggling to find ways to hinder justice."

A change of tune from Marriott

It's because of this that the recent admission of liability from Marriott Vacations Worldwide (MVW) is so important. It has admitted liability in regard to "certain contracts entered into over after January 1999".

This appeared in the MVW 2021 annual report, where it said: "A series of Spanish court rulings that since 2015 have voided certain contracts has increased our exposure to litigation."

"This is a big step forward," says Cooper. "The MVW report admits that contracts in Spain did not meet Spanish timeshare laws. Publicly admitting this commits them to a position of needing to do something about it. As far as we are aware, no other timeshare company has made such a bold and honest public statement."

The report acknowledges that there is "increased ability for owners of Spanish timeshares to void their contracts." It also admits that other lawsuits that may be brought against the company could "cause us to incur material litigation and other costs, including judgement or settlement payments."

The section concludes by suggesting that the situation "may lead to a significant decrease in the number of resorts located in Spain in the Interval International (exchange) network, and the loss of members who own... at those resorts."

Fast payments from Marriott

There are suggestions that policy decisions may have been taken at corporate level at Marriott Vacation Club International to avoid further delays in court.  Some clients have now received their compensation pay-outs faster, after being successful in their cases.

A German couple, for example, who had a Marbella timeshare, were awarded compensation of €81,208. Another client from Palma de Mallorca ended up receiving €43,319. In both cases, they received their money in just a few weeks.

"This is a huge break from traditional timeshare company behaviour," saysAndrew Cooper. "In the past, timeshare companies have fought for years, knowing they were wrong, but hoping that they could outlast their opposition. That was a realistic goal for them when they were dealing with individuals, but firms like M1 Legal will never give up. It seems like MCVI have finally accepted that."

But while the end may well be in sight, Cooper expects resistance to continue. "Don't get me wrong," he says. "Even Marriott are still challenging us in many cases. But as market leaders, their recent examples of facing the truth and obeying court rulings are giving us grounds to believe that the whole industry may be about to turn a corner."

"For people who have been on the fence about claiming compensation for illegal timeshare contracts. There has never been a better time."

Contact Timeshare Advice Centre if you would like to discuss your rights and options for making a claim against a timeshare company or finding out about relinquishment.