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House of Commons

Friday 7 February 1992

The House met at half-past Nine o'clock

PRAYERS

[Mr. Speaker-- in the Chair ]

BILL PRESENTED

Parliamentary Corporate Bodies

Mr. John MacGregor, supported by Mr. Secretary Heseltine, Mr. A. J. Beith, Dr. John Cunningham, Sir Barney Hayhoe and Mr. Peter Shore, presented a Bill to establish corporate bodies to hold land and perform other functions for the benefit of the Houses of Parliament ; to make provision for and in connection with the transfer of certain property rights and liabilities to those corporate bodies ; and for purposes connected therewith : And the same was read the First time ; and ordered to be read a Second time upon Monday 10 February, and to be printed. [Bill 69.]

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Orders of the Day

Timeshare Bill

Order for Second Reading read.

9.35 am

Mr. Andrew Hunter (Basingstoke) : I beg to move, That the Bill be now read a Second time.

This is the second time in four or five years that I have had the good fortune to come relatively high up in the ballot for private Members' Bills. As every hon. Member who enjoys such a position experiences, many suggestions are put to us. We have our own ideas, but on this occasion I did not take much persuading to settle for timeshare.

Like all hon. Members, over the years I have received a steady trickle of tales of distress, concern and anguish from constituents as a result of their experiences with the timeshare industry. It is not disputed that the ultimate solution to the problems surrounding timeshare lies within the European Community. The timeshare industry crosses national frontiers. An EC-wide solution is desirable and is very much on the cards. The assembly has produced a draft directive, the Commission has deliberated and the Council of Ministers is shortly to begin its consultation period. It will probably be two or even three years, however, before the European Community regulation is adopted by the Parliaments of the member states. It is desirable, therefore, that, at least for the time being, each member state should put its own house in order as much as it possibly can. The purpose of the Bill is very simple. It is to require all sellers of timeshare within the United Kingdom, and in some circumstances sellers of timeshare outside the United Kingdom, to allow the buyer a minimum 14-day cooling-off period in which to change his mind. This is a development in consumer protection which, in my judgment, is long overdue.

Before I describe the detailed provisions of the Bill, it may help if I outline the background to it and describe in a little detail the mischief that it seeks to correct. May I make one point abundantly clear at the outset : the Bill is not an anti-timeshare measure. That is far from the case. I do not criticise timeshare as a product. I wish to put firmly on record my thanks to the Timeshare Council, its chairman, Mr. Tom Critchley, and its legal adviser, Mr. Colin Jenkins, for their immense help to me in preparing for this Second Reading debate. I fear that I have tried their patience and taxed their tolerance, but I am most grateful to them for their encouragement and help.

Timeshare is a perfectly respectable arrangement. The way that timeshare sales around the world have rocketed since the invention of the concept in the 1960s and 1970s bears witness to its popularity. It is a logical progression from the package holidays that became so popular at that time. Without any doubt, timeshare has brought happiness to many individuals and families. Many thousands of people are perfectly happy with their timeshare properties. But others are not, and the Bill seeks to address the circumstances in which they find themselves.

Some timeshare owners wish that they had never bought timeshare and at the time of doing so certainly were not properly aware of what they were doing. I have not found it easy to obtain definitive statistics on the size

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of the United Kingdom's timeshare industry. The best advice that I have obtained suggests that about a quarter of a million people have become timeshare owners in the past four or five years, and the approximate rate of timeshare purchase is between 20,000 and 30,000 a year. Approximately 10,000 a year are sold in the United Kingdom under United Kingdom law.

I am sure that all hon. Members will have received at least one circular to tell us that we have won some mouth-watering prize--a car or a holiday in Florida--and that all we have to do is to attend a friendly holiday presentation. By a strange coincidence, I received such a card only two days ago. It makes interesting reading. It is addressed to my wife and me at our home address and it congratulates me on having been selected to receive two major awards. Apparently, I have come through to the third and final stage--that is the first that I knew of it--and I must win one of the two awards below : a Ford Fiesta, a laser personal computer, free holiday accommodation or even £1,000.

That side makes attractive reading. The smaller print on the back is worth looking at. It informs me that the company failed to contact me by telephone this week--that is not surprising as my number is ex-directory-- and congratulates me on having been selected as a major award winner and tells me to telephone a number, which I have done and parliamentary constituency duties permitting, next week I shall attend this presentation. I am assured that no purchase is necessary. All I have to do is to sit through a two-hour presentation at "our holiday exhibition centre."

I shall go with eyes wide open and a cynical mind to see what happens, but many people are taken in by the glamour and the promises of prizes offered to them. Anyone who is optimistic or naive enough to succumb to that invitation--evidence shows that a surprising number do--is likely to be subjected to many hours of high-pressure sales techniques, sometimes, I am told, for up to seven hours, during which time every trick in the book will be used to persuade people to sign a contract. A number of people sign, only to regret doing so the moment they are free from the hard-sell atmosphere of that so-called presentation. By then, all too often, it is too late. They may have been assured at the presentation that the contract includes a cooling-off period, only to find that it does not. At best, they may be released from the contract only if they agree to sacrifice the deposit that undoubtedly will have been demanded from them. At worst, they may be locked into a contract that they do not want and cannot afford. Needless to say, the free gifts that lure people to the presentation often turn out to be considerably less valuable than they were made to appear and are subject to such conditions that they are not worth having. That is the heart of the problem.

No fewer than 10,000 complaints a year about timeshare have been made to local trading standards departments. That remarkably high figure is the equivalent of one for each contract signed, which is not the same as saying that everyone who signs a contract complains, because many of the complaints will have been made by people who attended presentations and left angry and bitter. Of that total of 10,000, about a third related to the

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absence of a cooling-off period. All the evidence suggests, therefore, that a substantial proportion of United Kingdom purchasers of timeshare regret their purchase.

It may be argued that such people have only themselves to blame. If they are foolish or greedy enough to be taken in by obviously bogus offers of valuable prizes and too weak-willed to resist sales pressure, why, it may be asked, should the law step in to help them? The argument runs that people must be prepared to take the consequences of their actions and that it is not the province of the law to save them from themselves.

Caveat emptor is a sound principle. As a general proposition, I have much sympathy with that line of argument, but in the context of timeshare it is wrong. In too many cases the behaviour of timeshare companies has been unethical almost to the point of being fraudulent. That is not a situation to which the law can or should remain indifferent. There is no equality of bargaining power between the gullible who are ensnared by timeshare advertising and the sophisticated techniques and sales methods employed by timeshare companies. The simple proposition underpinning the Bill is that if the unscrupulous take advantage of the vulnerable, the law should step in.

The principle of a cooling-off period is well established. It features in three specific areas of consumer protection--doorstep selling, life insurance and consumer credit. There is, therefore, nothing new in the principle of what is proposed in the Bill. In concept, the Bill is simple. Basically, it contains one provision--a 14-day cooling-off period--for timeshare contracts and timeshare credit contracts. Although it is simple in concept, the Bill is lengthy. It contains 13 clauses and a schedule and seems to have grown almost week by week recently. There are a number of reasons for its being relatively lengthy. First, it is necessary to make its provisions watertight against evasion by the unscrupulous. Let us not be in any doubt that the Bill deals with some very unscrupulous people. Secondly, it is necessary to include provision for enforcement, which inevitably is lengthy because if one is creating a criminal offence one must spell out precisely what it is and what defences are available against it. Thirdly, many timeshare agreements are accompanied by credit agreements to finance them--credit that may be advanced by finance houses with close links with the timeshare company. It would be of little help to the disillusioned purchaser if he were able to cancel his timeshare agreement only to find that he could not cancel the associated financial agreement. Provision for cancelling associated finance agreements, therefore, must also be made and is to be found in the Bill.

Clause 1 consists of definitions. It defines the contracts to which the Bill would apply. Hon. Members may like to note that it would apply to any contract governed by United Kingdom law, whether or not it was made in the United Kingdom or abroad, and also to any contract where one of the parties was located in the United Kingdom, whether or not the law of the contract was that of the United Kingdom. The latter point is perhaps more important than it may seem at first because many timeshare contracts specify that they are to be governed by non-United Kingdom law--the Isle of Man law in particular and, to a slightly lesser extent, that of the Channel Islands. Timeshare companies will not be able to use that as a device to get around the provisions.

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It has been suggested that the Bill should go further and should specify that, even if neither of the parties to a timeshare contract is located in the United Kingdom and the contract is not made under United Kingdom law, United Kingdom courts should nevertheless not enforce such a contract unless it contains a cooling-off period. I understand that point and the Bill provides two main ideas for debate. The first involves the length of the cooling-off period and the second involves the question of jurisdiction.

Hon. Members may wish to raise the question of jurisdiction and I am sure that if the Bill reaches its Committee stage we shall return to it. I stress that I have an open mind on that question. I understand those who seek the widest possible jurisdiction, but attempts to widen the Bill's jurisdiction raise a number of jurisdictional difficulties. I am prepared to consider suggestions, but I am advised to say now that it may not be possible for the Bill to deal with extra-United Kingdom contracts which have been entered into.

Clause 1 also defines what is meant by timeshare, be it timeshare accommodation, timeshare rights, a timeshare agreement or a timeshare credit arrangement. It is of course a complex and technical part of the Bill and is intended to ensure that the Bill does not inadvertently catch transactions such as leases, student lets or repeat holiday bookings which are not timeshares. I was especially mindful of the dangers of ensnaring student lets, hence the stress in the Bill of a period of not less than three years which should eliminate that difficulty.

Clauses 2 and 3 are the meat of the Bill. Clause 2 lays an obligation on anyone who sells timeshare by way of business--the offerer in the language of the Bill. He or she must give the purchaser--the offeree--notice of his right to cancel the agreement before the agreement is made. Clause 2 also makes it a criminal offence not to do so. The cooling-off period must be specified in the notice. It must be at least 14 days from the day the agreement is made.

Clause 3 parallels clause 2. It contains provisions for timeshare credit agreements with one important difference. Failure to provide notice of cancellation rights in this case will not be a criminal offence. The main reason for that difference in treatment is that no criminal offence is created under the cooling-off provisions of the Consumer Credit Act 1974. Therefore, it would be hard to justify adopting a stricter approach for the purchasers of timeshares alone. It is fair to say that the need for a cooling-off period is now widely and generally acknowledged. The debate is about how long that period should be. The greater the reluctance to acknowledge the need for a cooling-off period, the shorter the period advocated. I certainly understand why some of the most reputable sellers of timeshare argue powerfully that a seven-day period would be adequate. Conversely, in the debate within the European Community some people have championed an upper end of 28 days and some favoured 21. The draft directive has both--a 14-day cooling-off period for "home" contracts and a 28-day period for "away" contracts.

I have not arbitrarily plumped for 14 days. The basis of that decision was a desire to follow the length of time recommended by the Director General of Fair Trading in his 1990 report on timeshare and 14 days is now consistent with EC thinking. No doubt the debate will be continued in Committee. I believe that the onus of proof lies with

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those who believe that the Director General of Fair Trading's recommendation is wrong, but I have an open mind.

Clause 4 contains certain supplementary provisions to clauses 2 and 3. The offeree has no cancellation rights if he is acting in the course of business. A blank notice of cancellation must accompany a notice of cancellation rights. That notice must be in such form as may be prescribed. Agreements are not invalidated by contravention of clauses 2 and 3. The latter provision is to enable the purchaser to continue to enforce the agreement if he wishes to do so. It does not, of course, affect his cancellation rights.

Clauses 5 and 6 make provision for the purchaser's right to cancel a timeshare agreement or timeshare finance agreement respectively. The basic right is contained in subsection (1) of both clauses. The intention--the policy objective, as it were--of clause 5 is to ensure that all timeshare buyers have a right to a 14-day cooling-off period and that not being aware of that right should not deprive the consumer of the ability to exercise it. Thus, under subsections (2) and (3) a timeshare purchaser may cancel the agreement at any time if he was not informed of his right to cancel when the agreement was made unless he affirmed it and demonstrated in some way after 14 days had elapsed from the date of the agreement that he was happy with it and intended to stand by it. That basic right is contained in subsection (1) of both clauses.

Subsection (2) extends the right of cancellation indefinitely if the purchaser has not been notified of his rights, but that is subject to subsection (3) which states that if the purchaser affirms the agreement after 14 days he loses his cancellation rights even if he has been notified of them. What constitutes affirmation would, in the last resort, be for the courts to decide, but, basically it means that the purchaser loses his right to cancel if by a positive action he has made it perfectly clear that he is happy with the agreement. The two clauses are similarly worded up to and including subsection (4) of each of them and then they diverge. For technical and legal reasons, there is no equivalent of clause 5(5) in clause 6. The remainder of each clause makes provision for what happens after the agreement is cancelled. Basically, the purchaser is entitled to the return of any deposit or other moneys that he may have paid, but in the case of a contract agreement the position is complicated by the fact that three parties may be involved--the timeshare company, the finance company and the purchaser.

The consequences of cancellation are, therefore, set out in more detail in clause 7. Except for necessary changes of wording, clause 7 is identical to subsections (1) to (3) of section 71 of the Consumer Credit Act 1974. Clause 7(1) spells out the consequences of the exercise of cancellation rights under that Act. It is therefore clearly important that the provisions of the Bill should march in parallel with the broader legislation on consumer agreements. Clause 7(1) ensures that the Bill covers the situation in which a credit agreement is part of a timeshare agreement and the situation in which such an agreement is free standing. Subsection (2) relieves the purchaser of any liability for interest if he repays the credit promptly. Subsection (3) relieves the offeree of his liability to repay the credit unless the offerer or creditor makes a request in writing.

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The rest of the Bill contains standard and technical provisions. Clauses 8 to 11 are standard provisions regarding enforcement and are drawn more or less word for word from the Property Misdescriptions Act 1991. Clause 8 allows timeshare sellers a due diligence offence in the event of failure to provide the purchaser with a cooling-off notice and places certain conditions on the defendant if he wishes to claim that his omission was due to false information or the fault of another.

Clause 9 makes it possible to prosecute employees of timeshare companies in appropriate circumstances, and renders directors and managers of bodies corporate or members of partnerships in Scotland liable if an offence is committed.

Clause 10 draws up the enforcement schedule, clause 11 lays down time limits for prosecutions, and clause 12 contains a number of general provisions which are grouped together for convenience. Subsection (1) makes it clear that a cancellation notice does not have to be in a prescribed form to be effective. Subsections (2) and (5) are designed to ensure compatibility with the Consumer Credit Act 1974. Subsection (3) allows for notices of cancellation getting lost in the post, or for timeshare companies claiming that they have been. Subsection (4) is important as it ensures that the purchaser cannot sign away his right to cancel. Subsection (6) contains certain necessary definitions, and subsections (7) and (8) contain the necessary order-making powers. Clause 13 contains the short title and provides for entry into force and application in Northern Ireland. The enforcement schedule contains standard provisions laying a duty of enforcement on local authority trading standards departments and on the Department of Economic Development in Northern Ireland. It also gives powers regarding the production and seizure of documents and of information stored in computers. It would be an offence to obstruct enforcement. There are the usual provisions regarding confidentiality and self-incrimination.

The Bill is targeted at a specific mischief which has gone too long unchecked. It is not intended to deal with all the problems that have arisen from the growth of the timeshare industry : that is beyond the scope of a private Member's Bill. Perhaps my hon. Friend the Minister will touch on that point when he speaks later. However, the Bill will do much to stop the exploitation of vulnerable people.

Mr. Hugo Summerson (Walthamstow) : Will my hon. Friend confirm that the Bill applies not only to those who sell a timeshare in the first instance, but to those who own a timeshare and who then wish to sell it on?

Mr. Hunter : I believe that such an application would move beyond the immediate specifications of the Bill. I am grateful to my hon. Friend for making that point and it may be possible for my hon. Friend the Minister to comment on it.

Mr. Norman Miscampbell (Blackpool, North) : I give an example on that very point. Under the Consumer Credit Act 1974, one buys a product and there is a cooling-off period. That is one thing. If one then wants to resell that product privately, that is a quite different thing. If the

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point raised by my hon. Friend the Member for Walthamstow (Mr. Summerson) was included in the Bill, many of us would find it difficult to support it.

Mr. Hunter : I am grateful to my hon. and learned Friend for that contribution. He is far more expert on these matters than many of us are.

I stress that the Bill will, I hope, do much to stop the exploitation of vulnerable people by organisations whose sales methods have reached a level of unscrupulousness which renders them a proper target for the criminal law. It is time for Parliament to call a halt to these practices. I therefore ask the House to give the Bill a Second Reading.

10.4 am

Mr. Tom Cox (Tooting) : I fully support the Bill and I congratulate the hon. Member for Basingstoke (Mr. Hunter) on introducing it. As he outlined, there are timeshare companies that operate in this country and overseas which have brought great pleasure and happiness to many people. In our day-to-day involvement in our constituencies we all meet people who have such timeshares. One chats to people who say that they are going to their timeshare, perhaps in Europe. Such people enjoy their timeshares and wish to keep them. I am sure that no hon. Member wishes to restrict such companies. We often say in debates in the House, "If only all companies acted like the well-run companies do, there would be no need for legislation." As the hon. Member for Basingstoke has pointed out, that is sadly not the case. From time to time cases come to our attention. I am sure that all of us sometimes try to think what our attitude would be if we were in the position of a constituent who comes to our advice service and says, "I am in hellish trouble. What do I now do?" In our everyday life, we think about something and we may enter a contract. One gets home and starts to think about it. One thinks, "Is it really a wise thing to do?"

What concerns me so much about many timeshare companies is that a person may in all sincerity enter an agreement. He may go home and, away from the heavy-handed pressure, sit down with his family and think, "Am I wise to carry on with this? No, before I get into deep financial trouble, I will cancel." When he seeks to cancel, even in a matter of days, he starts to realise just what the problems are. A constituent came to see me and explained in detail that he had entered a timeshare with a company operating in the Isle of Man on 13 April. He wrote to the company on 17 April to say that, having sat down and thought matters through, he felt that he must cancel. He said that if the company was involved in expenses because he had cancelled, he fully realised that he might be liable to pay some of the expense.

On 20 April, the company concerned wrote back and said : "We are in receipt of your letter dated 17 April 1991 and comment as follows. You have signed a legally binding agreement from which neither yourselves nor the company can withdraw. It is clearly stated in the disclosure statement duly signed by yourself. Therefore, we expect your balance prior to 13 April to be paid as quickly as possible."

One can well understand a person's worry when he receives such a letter. One thinks, "What is going to happen to me?" I am sure that all of us have often heard people wonder what their chances would be against a big company which has good legal advice available to it.

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People think of the possible court action and financial involvement and decide to continue with the contract, however difficult that may be.

Companies that apply pressure tactics ought to think, "This person is putting us to some inconvenience and expense--and we shall certainly seek to get the expense that we have incurred back from him--but it is to his credit that he has told us at a very early stage that he has had second thoughts and cannot continue with the agreement."

It was after my constituent received that letter in April that I became involved in the case. I wrote to the company on 5 July last year :

"Can I say to you I will await your reply, but if it is not a reply that accepts that Mr. and Mrs. Mathison no longer wish to pursue this Timeshare with your organisation, I will raise the matter on the floor of the British House of Commons and also circulate it to all the British Newspapers outlining the tactics that your Company follow."

We in the House have privileges and can raise on the Floor of the House any case in which we feel a constituent has been treated unfairly. In doing so, we are safeguarded against possible legal action by the company. Although we have that right--and rightly so--we can exercise it only if, as in the case of the gentleman to whom I referred, our constituents come to see us. There must be a lot of people who, for whatever reason, do not say to themselves, "I'll go and see my Member of Parliament and see what he can do." If people come and see us, we can not only write to the company but-- let us not mince words here--place it under some kind of threat. We can say, "My constituent has rethought. He realises that you may have incurred some expense that he has an obligation to meet, but he is now asking to be released from the contract." But we all know what the final outcome can be if the company does not wish to release a person from the contract and if he does not see his Member of Parliament. That is why the Bill is so welcome.

The hon. Member for Basingstoke explained the clauses in detail. I realise that other hon. Members have a legal background and may rightly wish to refer to legal aspects of the Bill. I have dealt with other cases, but that to which I referred really annoyed me. My constituents had quickly said that they had had second thoughts, but that they would willingly pay any money that they owed, yet, within a day or two, the company adopted the heavy-handed tactic of threatening legal action if they did not keep to the contract that they had signed. Because of that, the provision in which I am most interested is that for a cooling-off period. I think that it would be fair to allow 21 days. If I were organising a timeshare company, I should certainly be prepared to allow people 21 days in which to have second thoughts. Like everything else, however, we can discuss that in Committee.

Timeshare organisations should welcome the Bill. Only the very dubious companies will raise any objections to it. I am sure that the Bill will receive widespread support not only in the House but throughout the country.

The hon. Member for Basingstoke referred to European Community legislation. We all know--whether we support the EC or not--that its procedures move very slowly. I am a member of our delegation to the Council of Europe, and have been for many years. The Council has not discussed this subject, but, as the hon. Gentleman will know, the Council of Europe is a much larger organisation than the EC, with more than 20 members, and it might

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help if the hon. Gentleman consulted the Secretary-General of the Council of Europe and asked whether one of the committees might discuss such action. I must say that I do not know offhand which committee would do that, but it might help to broaden the debate to other European countries with which we have close associations and so further the Bill's objectives.

Mr. Hunter : I am grateful to the hon. Gentleman for that suggestion. I acknowledge that that possibility had not occurred to me, but it is certainly one which could properly be explored.

Mr. Cox : I thank the hon. Gentleman for his comments. I would certainly do all that I could to support such European action, as, I am sure, would other members of our delegation. It could also be pursued through the friendships that we build up with representatives of the other member states.

I warmly congratulate the hon. Gentleman on the Bill, which I am sure many people will wholeheartedly welcome. As always, there will be a certain amount of sadness, and people will wish that it had been in existence a year or two ago. Unfortunately, that is life. The Bill will be welcomed by good timeshare companies and will protect people from any bad companies which, whatever legislation is in place, will try to find avenues by which to exploit people. The hon. Gentleman is doing us a service in trying to protect those people and I hope that the Bill will proceed to Committee with Government support and will shortly become law.

10.17 am

Mr. Norman Miscampbell (Blackpool, North) : I wish to make a short speech in enthusiastic support of my hon. Friend the Member for Basingstoke (Mr. Hunter) and his Bill. Experience of the constituency problem that lies behind the Bill must be common to every hon. Member, but I am wearing a second hat and I want to make it plain that my opening remarks do not apply to particular constituency cases with which I am dealing at the moment.

Both my hon. Friend the Member for Basingstoke and the hon. Member for Tooting (Mr. Cox) have made it clear that many, if not most, people who go in for timesharing are entirely satisfied. But there are areas that are certainly grey and, in some cases, I think, actually black. In many cases, there is no first prize. In others, people who go to a timeshare presentation find that what they get at the end is of negligible value and may almost be rubbish. I hope that my hon. Friend the Member for Basingstoke will take the opportunity--even if he has other pressing engagements--to go to the presentation. If I were he I would send a copy of today's Hansard before me. That might help him to get a good prize and would certainly ensure that he was properly looked after. My hon. Friend might also like to ask one or two questions--I would certainly like to ask them--such as, "How many people did you write to saying that they had won the first prize?" The companies cannot say that they do not know ; they must have records of that. How many times was each of those persons telephoned? The organisations must keep a record or how would they know whom they had telephoned? I strongly suspect that one could more readily get an answer from Kevin Maxwell about what happened to the pension fund than an answer to either of those two questions.

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Before my hon. Friend leaves that meeting, he should tell the company that the next time that it is about to send him a happy card saying that he has won, it should telephone the House of Commons. That might mean that my hon. Friend will not lose the chance of £1, 000 or a motor car.

I am also aware that, sadly, legal proceedings abroad can be extremely difficult. I shall not make invidious remarks about which countries are involved, but we all read the newspapers and know perfectly well that it is often extremely difficult to enforce contracts abroad. I would be the first to accept that complaints could be made about the British courts, but, my goodness, the delays in some continental courts are excessive.

Constituency problems relating to timeshare are common to us all. I need say no more than that my hon. Friend's Bill seeks to remedy a grave grievance. The old, pensioners and the inexperienced are often pressurised into taking out timeshares which all sides recognise that often they cannot afford. My hon. Friend's 14-day provision is splendid and necessary.

I put my concluding remarks to both Front Benches equally and do not seek to make party points, because I shall not be here after the next election. We all recognise the low chance of this Bill reaching the statute book--not because of its merits, but because of time. I very much hope that whichever party forms the next Government, it will not leave the introduction of such a Bill to a Back Bencher, but will take the chance to make sure that this Bill--or something similar--is put on the statute book as quckly as possible.

10.21 am Mr. Hugo Summerson (Walthamstow) : I congratulate my hon. Friend the Member for Basingstoke (Mr. Hunter) on introducing his Bill. He said that he has been fortunate in the ballot twice in the past four or five years. If I am as lucky as that in the 30 or so years that I expect to be a Member of the House, I shall count myself very lucky.

We are familiar with the concept of timeshare. After all, this place runs on chunks of time--each chunk lasting up to five years. However, far from having any cooling-off period, we tend to have hotting-up periods.

The concept of timeshare is useful and has been around for some years. The idea is basically that people would like the use of a "property", in broadly defined terms, only at certain times, for a particular length of time and for certain purposes, but cannot afford to buy the whole thing all at once. One type of timeshare involves a holiday property in a different place or a different country. There are also fishing timeshares which cause considerable concern in some areas, especially Scotland. Particular lengths of river are offered for sale on a timeshare basis. The times of year when the fishing can be expected to be particularly good are offered at a much higher price, with other times of the year being offered at a lower price. However, allegations have been made about certain types of behaviour in timeshare areas that do not reflect well on the owners. The allegations include intensive fishing for a season or two before the timeshares are offered for sale--the idea being that if a bad fishing record can be disguised as a good one, the timeshare can be sold for a much higher amount. The fishing methods used

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during those intensive periods are sometimes highly questionable. Moreover, local people sometimes find that they are denied rights that they and their families had been used to for perhaps several generations. It is almost traditional on some rivers for local people to be able to fish a river after the fishing proper has ended at 5.30 pm or 6 o'clock. However, they are often no longer permitted to do that on the beats where timeshares have been sold. I know that that causes a considerable feeling of grievance.

I suggest that my hon. Friend also considers business timeshares. Some people always come to this country at a particular time of year for business purposes. They might find it extremely useful to know for certain that they could have the use of a particular office in a certain part of London or elsewhere for a certain period. Most people are rosy-eyed when buying a timeshare. They do not seem to realise that there is a sting in the tail, and that that sting is the management or service charge. Some people feel that having paid so much money for the timeshare itself, that is an end to their liability, but that is not the case. Places have to be run, managed, serviced and maintained--and that costs money. Sometimes people do not realise that they will be billed for the provision of those services from time to time--and that those bills can sometimes be very large and can come as an unpleasant surprise. People must realise that those charges will have to be paid.

It is not only those who buy the timeshares who sometimes feel that they are being stung by the management charges. Unscrupulous operators can use the pretext of the management charges to level inordinately high and extortionate service charges. The bills are often ill-defined, showing little or no detail. The demands are often rudely termed, with threats being made against those who own the timeshares.

Another type of timeshare shark will sell off as many timeshares as possible and then disappear, leaving the property to those who own the timeshares so that they will have to carry out the management themselves. That happens simply because the original offerer cannot be bothered to run the property himself.

I do not want to give the impression that all timeshare operators are sharks--far from it ; they are not. However, it is unfortunate that sharks have entered the pool. Of course, there are sharks in every form of business or commercial endeavour, but this pool has rather a lot. They operate in very shady ways, dangling what appears to be enticing bait before the noses of those whom they wish to persuade to enter timeshare agreements. We have heard examples of that today. We have heard about people who have been told that they have won a wonderful first prize and that all they have to do is to collect it. When they arrive to collect it, the place may well be a tacky little den in a damp basement where they are subjected to hard-sell techniques. Once their signature is on the dotted line, they will have to conform to the contract and they then find that what they were told was a wonderful prize is just a mirage. I raise the case of a constituent, Mr. Raymond Swingler, who recently wrote to me about a timeshare in which he is involved. With permission, I will go into the case in some detail because it illustrates a great deal of what has been said in the debate. He wrote :

"Dear Mr. Summerson,

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I enclose for your consideration a breakdown of events surrounding the forfeiture towards the end of last year of a timeshare week owned by me.

As at the time I was under the misapprehension I had paid my annual maintenance fee--the point upon which forfeiture was exercised--I was completely unaware of my loss of this £5000-odd week until I attempted to exchange it for another week with an international exchange company.

My attempts to remedy the matter and reclaim my week were to no avail. Accordingly, as the resort had failed completely to even alert me my maintenance fee was in arrear for some six months after the date of invoice, and then failed equally completely to contact me when it began exercising its forfeiture procedures, in spite of having access to my address, I find its procedures to be totally defective in dealing with other people's property.

I would welcome your assistance, as your constituent, and that of others, including the Office of Fair Trading, with concern over timeshare practices to help me recover, or be properly compensated for, the loss of my property."

The details are as follows :

"On 1 February 91 I was invoiced for an annual maintenance fee of £169.12.

In mid-December 91, while attempting to exchange my ownership of this particular week for another week I was advised by the exchange company I no longer owned the week in question. I checked"-- with the resort--

"to be told by its manager that in accordance with owners' club rules my week had been forfeited for non-payment of the maintenance fee and had reverted to the ownership of the club with no recompense due to me.

Certain I had paid the maintenance fee I checked my invoices to see the invoice marked paid'. The resort said it had no record of receiving payment. Further checking with my accountant confirmed that I had not paid the sum due.

When I pointed out to the resort I had never seen a copy of any club constitution giving members power to forfeit weeks, nor had I received any notification of non-payment, I was told that on the first count I should have received a copy of the club's constitution with my purchase, and on the second three reminders had been sent out, and none replied to.

I replied I had received none of these : indeed the resort's last communication received by me was notice of the AGM on 21 May. This was received via a one year forwarding arrangement with the Post Office following my change of address in the middle of 1990. For this purpose I used my Press Council address at Salisbury Square, London, later to become the Press Complaints Commission. The resort's response was that it was my responsibility to keep it informed of any change of address ; mine was that it had this, a continuing facsimile number on my personal letterheaded paper. The resort admitted it had this number on file.

I told the resort that when I bought my week as a resale, no club constitution had come with the sale deed. Nor had I received any notification of non-payment of my maintenance fee.

The resort said its final reminder had been sent by recorded delivery, although it had no record on file of doing this. Finally I was sent the copies of correspondence warning me of the penalties of non-payment of maintenance fee--the first on 4 August, some six months after the invoice was sent, the second on 4 September telling me forfeiture would take place on 20 September unless payment was made. A final letter, sent on 2 October, confirmed this had been done. Within weeks the owners' club committee had sold the timeshare week, although it would not tell me for how much, or to whom. That said, the buyer used it immediately to book with the exchange company. My points are :

(1) As the resort is run by an owners' club with draconian forfeiture rules (uncompensated repossession) adequate steps should be taken with each new owner to ensure he or she is aware of the club rules ;

(2) Six weeks to accomplish forfeiture with only two warning letters on a six month old invoice is improper ;

(3) Steps taken to find me as the registered owner were woefully inadequate ;

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(4) My mail address was operative until 30 June 1991, my facsimile number remains operative today ;

(5) That to tell me that matter was closed, the timeshare week sold without recompense as I had failed to comply with club rules, but that the matter would be reported to the owners' committee, was a woefully inadequate way to deal with my complaint.

(6) I have now lodged the outstanding maintenance fee with my solicitors. Now I want either my week returned to me, or compensation paid at the full retail price of the week taken from me, together with the additional £42 I had to pay the exchange company for my alternative week, and solicitors and general costs reimbursed." I have gone into the case in considerable detail because it raises several points about exactly why the timeshare industry needs to be regulated.

I put those points to the resort in question and it replied : "We would respectfully point out that"--

the resort

"has a constitution with which we expect all owners to abide. In so far as Management Fees are concerned there is a forfeiture clause in the event of non-payment of the management charge on the due date and we would refer to paragraph 9.11 and 9.12.

Invoices were initially mailed in February 1991 and reminders were sent including two by recorded delivery, these were in fact returned marked gone away.

We did not receive any communication from Mr. Swingler and as a result the forfeiture took place.

We now understand that when Mr. Swingler purchased his timeshare from a third party, not direct from us, he did not receive a copy of the constitution from the seller.

We have now been informed that Mr. Swingler had changed his address. There is a clause in the constitution paragraph 14.7 which gives owners an obligation to notify the committee and the management company forthwith of any change in the permanent address. Now that we are aware of the circumstances we have already advised Mr. Swingler and his solicitor that the matter will be discussed at the committee meeting on 13 February."

In view of that letter, I have decided not to name the particular resort at present. I hope that it will come to the right conclusion and that my constituent will be compensated for what has happened. As I have said, his case shows the need for regulation of the industry. I have one or two suggestions. First, to obviate this sort of difficulty, a timeshare register should be set up, showing the lengths of term, all the various conditions that must be complied with and so on, so that when people buy a timeshare they can refer to it for all the details. Secondly, as I suggested in an intervention in my hon. Friend's speech, the Bill should include all timeshares offered for resale. Otherwise, not only will what happened to my constituent continue to happen, but unscrupulous operators-- sharks--may well find a way round the Bill's provisions by selling timeshares to their nominees in compliance with the Bill and those nominees will be able to sell the rights without having to comply with the Bill's provisions.

I again congratulate my hon. Friend on his wise choice of Bill. This matter is of concern to us all. The case that I have raised is not by any means the only one of which I am aware. People need to be protected from those who indulge in hard-sell techniques. They need time to be able to talk things over with friends and family. They should have the right to decide whether they are doing the right thing. They should also have the opportunity to seek further details.

People outlay considerable sums of money on timeshares. They should have the right to possess and

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