“working together” march 2010 new timeshare directive: preparing for 2011

“Working Together”

March 2010

NEW TIMESHARE DIRECTIVE:

PREPARING FOR 2011


March 2010

IN THE BEGINNING THERE WAS

TIMESHARE


March 2010

THE NEW TIMESHARE DIRECTIVE

AND TIMESHARE WAS

GOOD


March 2010



March 2010

OUR BELIEF

The future of timeshare is crucially dependent on a better understanding,

relationship and trust between timeshare consumers and ALL aspects of the

timeshare industry

And that begins at point of sale


March 2010

LEGISLATION

1992 - UK TIMESHARE ACT

1994 - EU DIRECTIVE (94/47/EC)

1997 - TIMESHARE REGULATIONS

2003 - REVISION TO TIMESHARE ACT

2006 – EU COMMISSION CONSULTATION PROCESS

2007 - PROPOSAL ADOPTED BY COMMISSION

2008 - (OCTOBER) EU PARLIAMENT ADOPTED NEW DIRCTIVE AT FIRST READING

2009 - (FEBRUARY) NEW DIRECTIVE CAME INTO FORCE (2008/122/EC)

2011 - (FEBRUARY 23rd) IMPLEMENTATION OF 2008/122/EC


March 2010

TARGET OF NEW DIRECTIVE

IT'S ESSENTIAL TO RECOGNISE:The principle target of the consultation

paper and subsequent legislation

IS NOT

the reputable, well established, timeshare product or the reputable timeshare

industry and businesses


March 2010

PRINCIPLE TARGETS

Holiday Clubs (DTMC & LTHP ) Scam resale companies

ALSO: Timeshare catch-up (sales & marketing) Exchange

ALSO: Harmonisation


March 2010

THE STRUCTURE OF DIRECTIVES

“Having regard to”Prevailing economic/political/legislative environment

“Whereas:”Background – driving motivation – objectives

“Have adopted”Detailed articles

AnnexesDetailed information and forms


March 2010

OBJECTIVES OF NEW DIRECTIVE

BACKGROUND

DRIVING MOTIVATION

AND OBJECTIVES

“Whereas:”

Why was there a need for the New Directive


March 2010

WHY NEED A NEW DIRECTIVE

“Timeshare has evolved and new

holiday products similar to it have appeared on the market”


March 2010


“These new holiday products and

certain transactions related to timeshare, such as resale contracts and exchange contracts, are not covered by Directive

94/47/EC.”


March 2010


“experience with the application of Directive 94/47/EC has shown that

some subjects already covered need to be updated or clarified, in order to

prevent the development of products aiming at circumventing this Directive


March 2010


“The existing regulatory gaps create appreciable distortions of competition

and cause serious problems for consumers”


March 2010

HELPLINE COMPLAINTS AUGUST TO JANUARY

Resale (Specif ic Company)

Resale (General)

Sales & Marketing (Non-Timeshare)

Exit Routes

Scam Legal

Sales & Marketing (Timeshare)

Timeshare resort or Club

Maintenance fees

Miscellaneous

Cash Back failure

Unsolicited calls

“Bonus Week” holiday offers

Takeover

Rental

Timeshare Exchange

Business call

Foreign language


March 2010

HELPLINE TOTAL-CASES AUGUST TO JANUARY

Resale (Specif ic Company)

Resale (General)

Sales & Marketing (Non-Timeshare)

Exit Routes

Scam Legal

Sales & Marketing (Timeshare)

Timeshare resort or Club

Maintenance fees

Miscellaneous

Cash Back failure

Unsolicited calls

“Bonus Week” holiday offers

Takeover

Rental

Timeshare Exchange

Business call

Foreign language


March 2010


WHAT THE NEW DIRECTIVE

MUST DO


March 2010

WHAT THE DIRECTIVE MUST ACHIEVE

“productivity in the timeshare

and long-term holiday product

industries should be encouraged by adopting certain common rules”


March 2010


“certain aspects of the marketing, sale

and resale of timeshares and long-term holiday products, as well as the

exchange of rights deriving from timeshare contracts, should be

fully harmonised”


March 2010


“Member States should not be

allowed to maintain or introduce

in their national legislation

provisions diverging from those

laid down in this Directive”


March 2010

WHAT THE DIRECTIVE MUST DO

“The different contracts covered by

this Directive should be clearly

defined in such a way as to

preclude circumvention

of its provisions”


March 2010



March 2010

TIMESHARE CATCH-UP

Boats and planes etc Trial products Third party deposits Points products Close gaps to avoid circumvention Better consumer information Harmonisation


March 2010

MAIN ARTICLES

2) DEFINITIONS

3) ADVERTISING

4) PRE-CONTRACTURAL INFORMATION

5) THE CONTRACT

6-8) RIGHT OF WITHDRAWAL

9) ADVANCE PAYMENTS

12) IMPERITIVE NATURE

13) JUDICIAL REDRESS

15) PENALTIES


March 2010

DEFINITIONS - ARTICLE 2

“TIMESHARE”‘timeshare contract’ means a contract of a

duration of more than one year

under which a consumer, for consideration, acquires the right to use one or more

overnight accommodation

for more than one period of occupation


March 2010

DEFINITIONS - ARTICLE 2

TIMESCALESIn calculating the duration of a timeshare

contract or a long-term holiday product contract, ...... any provision in the contract allowing for tacit renewal or prolongation

shall be taken into account


March 2010

PRE-CONTRACTURAL INFORMATION (4)

In good time before the consumer is bound by any contract or offer, the trader shall provide the consumer, in a clear and comprehensible manner, with accurate and sufficient information, as follows:

1) For timeshare – Annex 1 (3 parts, 3 pages)

2) The information referred to in the annex shall be provided, free of charge, by the trader on paper or on another durable medium which is easily accessible to the consumer.

3) Language – can be requested in any official language of the EU

NB: From Article 3 “The information referred to in Article 4(1) shall be available to the consumer at any time during the event.”


March 2010

PRE-CONTRACTURAL INFORMATION (4)

LOOK AT ANNEX 1 VERY CAREFULLY: The rights acquired Full details of the product and properties The facilities Costs – including all fees (utility charges,

maintenance fees, additional charges .....) Exit route Much more

The consumer must sign to acknowledge receipt.


March 2010

ADVERTISING – ARTICLE 3

1. Member States shall ensure that any advertising specifies the possibility of obtaining the information referred to in Article 4(1) and indicates where it can be obtained.

2. Where a timeshare, long-term holiday product, resale or exchange contract is to be offered to a consumer in person at a promotion or sales event, the trader shall clearly indicate in the invitation the commercial purpose and the nature of the event.

3. The information referred to in Article 4(1) shall be available to the consumer at any time during the event.

4. A timeshare or a long-term holiday product shall not be marketed or sold as an investment.


March 2010

CONTRACT – ARTICLE 5

Language – articles 4 & 5 – can be requested in any official language of the EU (4 possibile justifications). May need more than one

Annex 1 forms part of the contract Draw specific attention to articles 6 and 9 and be separately

signed (withdrawal and deposits) Include a standard withdrawal form (annex 5) Consumer must receive a copy of contract at the time of

conclusion


March 2010

WITHDRAWAL – ARTICLES 6 - 8

Right to withdraw

In addition to the remedies available to the consumer under national law in the event of breach of the

provisions of this Directive, Member States shall ensure that the consumer is given a period of

14 calendar days to withdraw from the timeshare, long-term holiday product, resale or exchange contract,

without giving any reason.


March 2010


Withdrawal period - standardised across EU

14 calender days from completion of contract or .......

14 Days from the date the consumer receives the contract if later or .........

3 months + 14 days if any failure on pre-contractual information or .........

12 months + 14 days if no withdrawal form provided


March 2010


In addition, Member States shall provide for appropriate penalties in accordance with Article 15,

in particular in the event that, on expiry of the withdrawal period, the trader has failed to comply with the information requirements set out in this

Directive.

On exercising withdrawal consumer shall bear no cost or be liable for any value of the service

performed prior to withdrawal


March 2010

DEPOSITS – ARTICLE 9

Any advance payment, provision of guarantees, reservation of money on accounts, explicit acknowledgment of debt or any other consideration to the trader or to any third party by the consumer is prohibited:

* For timeshare, long-term holiday product and exchange contracts before the end of the

withdrawal period.

* For resale, before the actual sale takes place or the resale contract is otherwise terminated.


March 2010IMPERITIVE NATURE AND INTERNATIONAL CASES - ARTICLE 12

1) where the law applicable to the contract is the law of a Member State, consumers may not waive the rights conferred on them by this Directive


March 2010IMPERITIVE NATURE AND INTERNATIONAL CASES - ARTICLE 12

2) Where the applicable law is that of a third country, consumers shall not be deprived of the protection granted by this Directive, as implemented in the Member State of the forum if:

* any of the immovable properties concerned is situated within the territory of a Member State, or,

* in the case of a contract not directly related to immovable property, the trader pursues commercial or professional activities in a Member State or, by any means, directs such activities to a Member State and the contract falls within the scope of such activities.


March 2010

REDRESS – ARTICLE 13

Provision is made for action to be taken within national laws by one or more of the bodies below to ensure that the provisions of the Directive are applied.

Public bodies and authorities or their representatives Consumer organisations with a legitimate interest in

protecting consumers Professional organisations with a legitimate interest

in taking such action Out of court redress – Article 14


March 2010

PENALTIES – ARTICLE 15

Member States shall provide for appropriate penalties in the event of a trader’s failure to comply with the

national provisions adopted pursuant to this Directive.

Those penalties shall be effective, proportionate and dissuasive.


March 2010

OTHER LEGISLATION

National contract law Unfair commercial practices Directive 2005/29/EC Consumer Credit Legislation

* Directive 2008/48/EC and council of 28/4/2008

* CCA 74 last updated in 2006 Contracts negotiated away from business premises

Directive 85/577/EEC 1985 (updated 2007)


March 2010

CAUTION

The word “Investment”


March 2010

CAUTION

If you sign a consumer up to RCI/II/DAE … membership as part of a timeshare purchase you may have to comply with the requirements of the

Directive as though you were the exchange company


March 2010

BE AWARE

THERE ARE ALREADY LOOPHOLES Scam legal companies

who claim they can recover money say they are holding money class action scams

Rental offers Takeover offers Illegal actions


March 2010

NEW TIMESHARE DIRECTIVE:

PREPARING FOR 2011


March 2010

PREPARING FOR 2011

THE CHALLENGE ISN'T:“How are we going to manage/survive

these changes”

THE CHALLENGE MUST BE:“How are we going to maximise this

opportunity”


March 2010

PREPARING FOR 2011


March 2010

PREPARING FOR 2011

Embrace the change – it IS going to happen

It has been done to PROTECT the consumer and the reputable timeshare industry

Take every new requirement and make it into a marketing POSITIVE

Quality companies have nothing to fear.


March 2010

PREPARING FOR 2011

START NOW Study and dissect the Directive Do a comprehensive gap analysis Make urgent plans to close all gaps Communicate and train Put it in place Challenge what you have done


March 2010

CAN WE HELP?

We are happy to work with any Resort Committee, Developer or Management Company who would like information,

assistance or an evaluation to assess their readiness for the new Directive, and to

identify requirements

This was really helpful to us all, even me who’s not part of the sales team.


March 2010

THE ANSWER

YOU HAVE TO DO THIS (FEB' 2011) YOU SHOULD WANT TO DO THIS DO IT WITH ENTHUSIASM BE PROUD OF YOUR ACHIEVEMENT MAXIMISE THE NEW OPEN, HONEST

AND INFORMATIVE APPROACH TO CONSUMERS AS A MARKETING POSITIVE


March 2010

THE ANSWER

YOU CAN'T FIGHT EVOLUTION

THE ONLY ANSWER IS TO EVOLVE

“working together” march 2010 new timeshare directive: preparing for 2011

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