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Press Release

On 19 June 2018, a representative from Canarian Legal Alliance attended the hearing at the Royal Courts of Justice, Upper Tribunal, Tax and Chancery Division, to represent the interests of one of our clients. These clients had been sold timeshare in Malta by Azure Resorts and were financed by loan agreements with Barclay Partner Finance.

It transpires that these loan agreements were brokered by an unauthorised agent Azure Services Ltd. As such these agreements breached the Financial Services and Markets Act 2000. This affected 1,444 credit agreements with a total value of £47 million, in the period between 1 April 2014 and 24 April 2016. This made the agreements unenforceable, which entitled the borrowers to recover their money and have the agreements cancelled.

Therefore BPF applied to the Financial Conduct Authority in May 2017 to have a validation order issued to rectify this. The FCA on the evidence and information at the time issued the order to validate the loan agreements in February 2018.

This validation would then entitle BPF to retain money paid to them under the agreements, also allowing BPF to enforce payments by any consumer who defaulted. On 1 August 2018 Judge Timothy Herrington issued his judgement, in his ruling he stated the FCAshould re-examine the original order and take into account “client detriment”, a factor which the FCAhad not considered in the original order. In the case of our client, this “client detriment” is very clear, they were mislead into purchasing the timeshare as an investment with the promise of income rental and then resale, which never materialised. They were pressured into signing the loan agreement after hours of high pressure timeshare sales tactics, even though our client explained they could ill afford the timeshare.

They were not explained the terms and conditions of the agreement or the full extent of the cost, the product they were purchasing was not suitable for their needs and would not fulfill the promises given. They were also mislead as to the length of the loan agreement, being 2 years and not 15 years which it turned out to be.

There were no proper credit checks made with regards to affordability or the ability to afford the repayments, they were not asked to provide any proof of income (bearing in mind they were both in their 70’s and on pensions), or any proof of outgoings.

Once the validation order is overturned by the FCA, this will leave our client able to recover all money paid to BPF and have the loan agreement declared null and void.

This ruling may also have an effect on loan agreement for timeshares purchased via loans even by an authorised broker. As a law firm we have many clients who have gone through the same process, lengthy presentations, high pressure sales and no proper checks regarding the ability to afford the repayments. We believe this may give clients an avenue to have these agreements cancelled and be reimbursed the money paid.

August 9, 2018

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