Select Committee on European Union Third Report

FOREWORD—what this Report is about

Timeshare is especially popular amongst British consumers, and is a sector of the holiday market that has often come in for heavy criticism.

Through its 1994 Directive on timeshare, the European Community stamped out many of the worst excesses of the timeshare market by introducing a right of withdrawal, a cooling-off period and a ban on advance payments during the cooling-off period. The subsequent reduction in the level of complain?ts against timeshare illustrates clearly the success of the Directive in giving consumers some protection from aggressive and misleading sales practices, and thus making the timeshare market less attractive to rogue traders.

The 1994 Directive has not, however, been a complete success. It was open to some legislative loopholes that have been exploited by less scrupulous sections of the industry. New products have been developed to evade its provisions and the resulting cost to the UK consumer alone of such bad practice has been estimated at over £1 billion. There has also been a growth in fraud linked to the bogus resale of timeshare properties.

It is these issues, and others linked to scope and implementation, which the Commission is now seeking to address through its proposal for a broader directive, and in this report we consider that directive's strengths and weaknesses.

Our general view is that national legislation cannot deal adequately with the problems associated with the timeshare market and that EU-level legislation is therefore appropriate. While we make a number of recommendations relating to its detail, our conclusion is that the Commission has set out a good case for a new broader timeshare directive.

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