Brussels, 07/06/2007 (Agence Europe) - Timeshare holidays are all the rage in the EU. But beware of the pitfalls! This formula provides consumers with the right to stay in a holiday property at a specified period of the year, for three years or longer, and exists as a directive since 1994. The directive guarantees consumers a minimum level of protection and, according to the European Commission, deserves a further protective boost in order to take into account the major upsets that have occurred in a market that brings prosperity and substantial benefits to the European economy. The newly proposed directive aims to tackle loopholes in the current rules and prevent dream holidays turning into nightmares.
Consumer Commissioner Meglena Kuneva summed up the character and aims in this initiative, “The existing directive has worked well within its own limits. However, these holiday products remain a high-pressure sales environment and many new products have come onto the market that are not covered by existing laws. Consumers are being denied their rights, and the practices of rogue traders bring legitimate business operators into disrepute. With these new rules we want to create a level playing field for business, providing clear and simple rules for the reputable part of the industry, and to give consumers real peace of mind when they sign up for their dream holiday deal."
Addressing the press, Kuneva explained that the 1994 directive applies exclusively to accommodation in property for more than one week or more than three years. She said that these restrictions allow operators to avoid legislative imperatives by proposing a product for a period of five days or three months.
The text contains minimum requirements that give buyers the right to information in a prospectus before signing a contract. It prevents 'pressure selling' by allowing for a cooling-off period (right of withdrawal) of at least 10 days; it prohibits operators from taking deposits from buyers during the cooling-off period and imposes an obligation on the operator to provide written contracts. The commissioner stressed that “thanks to this directive, 80% of consumers are satisfied. Most of the 2256 complaints submitted in 2006 at European Consumer Centres involve areas that are not covered by legislation, with damages estimated to be in the range of £1.2bn a year in the United Kingdom”.
With the new directive, the Commission proposes to extend the field of application for the rules in force to new contracts and to new products, such as timeshares. Short term contracts (for less than three years) will be covered, as will timeshare-like holidays on cruise boats, canal boats and caravans. - Timeshare resale and exchange clubs will also be covered, for which consumers pay a very high access charge (€3,000 for example) to obtain the password for accessing a web site on which “enormous discounts” are promised (often misleading) on holiday accommodation, flights and rental cars. Resale of timeshare products will also be covered - many timeshare owners are approached by commercial agents who ask for a fee in return for selling their timeshare. Exchange of timeshare products will be covered too - some timeshare owners pay an additional fee to join an exchange club, where they can swap their week in, for example, the Canaries for a week in the Alps. Additional information requirements should ensure they get a realistic picture of the offer and products that are described as time-shares ranging from weekend to 35 month contracts. “The high level of access charges to reserve preferential tariffs often aim to trap the elderly”. She said that so much was promised that did not correspond to reality and that often complaints reflected this disappointment. She explained that uniform rules in the EU were needed as these activities are increasingly cross border. The Commission was convinced that it would not just be consumers who benefited, operators would too because they were finding it difficult to maintain their brand images even if they were honest.
With 15,000 properties offering accommodation to 70 million a year, with turnover of €10.5bn in 2003 and employing 40,000, the sector is flourishing. Time shares are very popular in many EU countries. The United Kingdom, followed by Sweden, Germany, Italy and Spain are at the top of this list. The Commission said they had high hopes about the contribution of tourism to the European economy. This explained the importance of increasing consumer confidence by legislating in these crucial services. (an)