Unregulated Timeshare Claims Companies: Legal Risks & How to Protect Yourself

If you have owned a timeshare, you may be familiar with persistent cold calls from companies claiming they can cancel your timeshare agreement or secure financial compensation on your behalf.

You may wonder how they acquired your personal information. Often, the answer is that your data has been obtained illegally from timeshare developers, likely through former sales personnel.

The Serious Fraud Office has issued a warning regarding these companies and is seeking public assistance in investigating an organised crime network involved in a timeshare boiler room scam. Arrests have been made, and inquiries continue. Read the warning via the link below:

https://www.gov.uk/government/news/public-appeal-for-information-on-organised-crime-network

Authorities are concentrating on potential consumer protection and fraud offences, and the investigation is ongoing.

Nonetheless, these companies are clearly engaging in illegal activities. Typically, they make unsolicited calls pitching claims against UK financial institutions that may have financed the acquisition of a timeshare. As we will detail, offering such advice or services is a criminal offence.

Regulation of Claims Management Companies

Since April 2019, Claims Management Companies (CMCs) have been under the regulation of the Financial Conduct Authority (FCA).

According to Section 19 of the Financial Services and Markets Act 2000 (FSMA), no individual may carry out a regulated activity in the UK unless they are either:

a) An authorised person; or b) An exempt person.

Breaching this regulation, as outlined in Section 23 of the FSMA, constitutes an offence punishable by: (a) Summary conviction – imprisonment for up to six months, a fine, or both; (b) Indictment – imprisonment for up to two years, an unlimited fine, or both.

Therefore, if a cold caller claims to perform a regulated activity, they are committing a criminal act.

Regulated Activities and Related Offences

Some cold callers may claim they intend to refer compensation claims to an unspecified “trusted” partner. However, this does not protect them, nor does it protect any regulated company operating behind the scenes. The scope of regulated activities is extensive.

The Financial Services and Markets Act (Regulated Activities) Order 2001 (RAO) defines regulated activities as including:

• Identifying and seeking referrals for potential claims

• Advising, investigating, and handling claims

• Agreeing to undertake a regulated activity

If a cold caller contacts you about a potential claim, they are committing an offence. Providing misleading advice or agreeing to act on your behalf, even as an intermediary, is also illegal.

Any regulated business using these companies as proxies is complicit.

Territorial Considerations

Even if the cold caller operates from abroad, such as a boiler room in Spain, they are still committing an offence if the potential claimant resides in Great Britain, as specified by Article 89F of the RAO.

Exclusion for Legal Professionals

Solicitors are exempt from these regulations under Article 89N. If a solicitor is involved, they will not cold call, as direct marketing of this nature is prohibited by their regulator.

Protecting Yourself

The simplest advice is to avoid engaging with cold callers. If you are concerned about your timeshare or believe you have a claim against a UK financial institution, consult a regulated solicitor. Many firms, including Athena Law, offer initial advice free of charge.

To verify if a cold caller is associated with a regulated claims management company, check their credentials on the FCA Register using the link below:

https://register.fca.org.uk/s/

What If You Have Already Engaged an Unregulated Company?

If you have only paid a deposit, you have grounds to cancel your agreement without paying the remainder. If you have paid in full, you may be entitled to recover the entire amount. Your contract with an unregulated claims management company is legally void and unenforceable under Section 27 of FSMA.

If you made a deposit payment by credit card, you might be able to reclaim your funds through a credit card provider under Section 75 of the Consumer Credit Act 1974.

How Athena Law Can Assist You

If you have already involved an unregulated timeshare exit or claims company, do not lose hope. Reach out for a free case assessment to discuss:

• Cancelling your contract with the claims management company and recovering your money.

• Addressing any outstanding timeshare liabilities and steps for termination.

• Evaluating whether you have a valid compensation claim against a timeshare company or UK bank.

At Athena Law, our experienced solicitors are equipped to help you reclaim your rights and shield you from significant financial liabilities associated with timeshare ownership.

Mr. Stephen Boyd, a solicitor with over 20 years of experience, leads our team with a reputation for excellence in this area. Contact us for a free, no-obligation consultation to discuss your case and receive clear guidance on your next steps.