Case Study: Mr L against Barclays Partner Finance and Club Paradiso
Case Study | Timeshare loans and unfair lending
Club Paradiso and Barclays Partner Finance
Â We wanted to bring to your attention a particular case that we won recently for a client that truly highlights how unfair and irresponsible banks can be with their lending in regards to timeshare loans. This case study follows the story of a retired 75-year-old man (Mr. L) who was talked into various timeshare loans and as a result took on unaffordable loans and repayments that were financed irresponsibly by his bank lender. This particular client was sold a timeshare property by Silverpoint Vacations and we wanted to highlight the devastating financial implications of this sale on the owner from 2007 when the first timeshare was taken out and the lasting impact this has had on his life. Whilst no action could be taken out against Silverpoint themselves, due to the clients limited financial means, we were able to recover compensation from the bank that funded the purchase by way of a linked loan. This case study is so important to us, because it illustrates the need to hire a professional, qualified timeshare solicitor who will do a thorough job in researching your case and finding evidence that you have been treated unfairly. Enlisting the help of a trusted professional can get you the help and justice that you deserve.
Our client, (Mr L), came to us to help him out of the financial mess that his timeshare contract had left him with many years ago. In 2007, Mr. L attended a timeshare sales presentation with Resort Properties whilst on holiday in Tenerife, as many others have also done. He was told at the time that he would be able to purchase a timeshare property and make a good return on his investment in two yearsâ time once it was sold.
Relying on representations made by the timeshare salesman Mr. L bought 2 weeks of timeshare for Â£25,000 – Â£1000 of his own money for a deposit and the rest was financed through a finance agreement with BPF (Barclays Partner Finance). Unfortunately, as is the case with so many others, Mr. L found that he could not sell his timeshare as easily as he was initially led to believe and was forced to return to Tenerife in 2013 in an attempt to sell his timeshare. He was informed by Silverpoint (previously Resort Properties) that the resale market wasnât strong at that time but was told if he upgraded his membership it would make a sale far more likely and secure a greater financial return. Convinced by his sales rep, he paid a further Â£5000 out of his own savings to upgrade his timeshare. Mr. L again returned in 2014 with a view to arranging the sale of his timeshare. However, during another sales pitch, he was told that he could buy another membership (at a more desirable resort – Club Paradiso Resort) for Â£34, 975 and that this timeshare would be much more desirable to future buyers. He financed this purchase through two loans, one of which was a loan from BPF for Â£14,000, and the remainder of the balance by another lender. Since this, and despite the assurances of the sales representative, neither timeshare has sold and our client was forced to reduce his monthly fees payments to Â£5 per month and hasnât been able to pay his maintenance fees for either timeshare.
Our client is elderly, vulnerable and struggling financially as a result of his timeshare purchases and the false promises made by the timeshare sales representative. Â He instructed Athena Law to make a complaint to BPF on the grounds that they did not lend responsibly to him based on his circumstances in 2014 when he took out this loan. The loan agreement he signed with BPF was to be repaid over 10 years with an interest of Â£6,770 over the period. So, for the Â£14,000 a total repayment of Â£20,835 and monthly fee of Â£173.63 over 10 years.Â
At the point of sale, Mr. L was 75 years old and retired, he had an income of Â£12,000 per year. (His monthly income from various pensions and investments totaled Â£759 and left him with a disposable income of Â£190). Even though he Mr L did sign the customer compliance statement at the point of sale the bankâs calculator did not take into account what our client would have to spend on food and bills each month or any service charges from his existing timeshare. BPF asked no questions for how he would finance the rest of the amount for the timeshare and had they done so they would have found he had a separate loan in both his and his wifeâs name.Therefore, they had not researched the fact that he would not possibly be able to finance both repayments with his monthly income. Devastatingly, the loan that BPF financed would have left our client paying a loan off until he was 85 off his pension income. BPF also did not take into consideration our clientâs age.
Thankfully, our client decided to bring his case to us. We worked hard to uncover the details of his case and uncovered the irresponsible lending from his bank. BPF denied liability. Mr. Lâs case had to be proven, involving the production of financial records, comprehensive witness evidence and legal submissions to the Financial Ombudsman Service (âthe FOSâ).
After 18 months the FOS finally ruled on Mr. Lâs complaint. It held that BPF had not fully taken into consideration Mr. Lâs financial position at the time of the purchase of his timeshare and whether or not he could, given his age and income, afford to purchase the timeshare. Had BPF not made available the loan, Mr. L would not have purchased the timeshare.
Because of the hard work of our specialist timeshare solicitors, our client was released of the financial worry that had been weighing him down for years. BPF was instructed to:
- Refund all payments made by Mr L to date with 8% interest per year on such payments.
- Refund all annual timeshare maintenance Â fees Mr L had paid between 2014 and 2018 with Â 8% interest per year on such payments.
- Arrange for the loan to be cancelled
- Remove any adverse entries to Mr Lâs credit file
- Arrange to write off any outstanding maintenance fees or other amounts due, in other words to assume responsibility for his timeshare.
We are so pleased that after 2 years of hard work Mr. L is now free from his timeshare and has been fully compensated. Prior to instructing Athena Law he paid an unregulated paralegal company Â£15,000 (all he and his wife had left) to pursue a claim in Spain. No work had been done and this unregulated paralegal company (run by an ex timeshare salesman of course) went into liquidation. Fortunately, Athena also managed to recover all money paid to this company.