Why we did the Inquiry
1. Timeshare is a worldwide phenomenon but it
is one that has proved particularly popular with UK consumers
as they seek holidays in warmer climates. Some 500,000 British
families own a timeshare, of which around 20% are in the UK, and
British residents represent one third of all timeshare owners
in Europe (QQ 44-45). Moreover, the Commission's impact assessment[1]
noted that half of all timeshares in Spain are owned by UK residents.
2. There are no doubt many contented timeshare
owners, both in the UK and elsewhere—although our witnesses
disagreed about levels of satisfaction—but the history of
the timeshare market has been far from a happy one. Indeed, before
the adoption in 1994 of a European Community Directive[2]
intended to provide timeshare consumers with protection, the sector
was the largest single source of consumer complaints in the UK.
3. The number of complaints about timeshare has
fallen substantially since the 1994 Directive was introduced.
Numbers of complaints about long-term holiday clubs, however,
have grown dramatically. The losses incurred by consumers are
believed to be substantial, and the Office of Fair Trading (OFT)
recently put holiday club fraud at the top of its priorities for
investigation.
4. In order to address this problem, on 7 June
2007, the European Commission proposed to replace the 1994 EU
timeshare legislation with a new directive which would improve
the protection of consumers in respect of certain aspects of timeshare,
long-term holiday products, resale and exchange[3].
5. Our inquiry had the aim of assessing, on the
basis of evidence we received from a wide range of witnesses,
how satisfactory the newly proposed directive is likely to be
as a means of addressing the problems experienced by consumers.
6. The new directive is intended to close loopholes
in the original Directive, increase the cooling-off period for
purchases, provide better information for consumers, extend the
scope to deal with new holiday products and address the problem
of fraud associated with the resale of timeshares. The proposal
also aims to harmonise the provisions in the 1994 Directive in
order to improve the operation of the single market and to ensure
greater consistency for consumers.
7. The proposed new timeshare directive would
give consumers greater contractual rights. Consumers would be
better equipped to deal with unsolicited approaches by sellers,
some of which may involve misleading information and aggressive
sales techniques. The new directive in itself does not, however,
regulate the timeshare and holiday club industries or define what
is, and what is not, good practice.
How we conducted the Inquiry
8. The Members of our Social Policy and Consumer
Affairs Sub-Committee (Sub-Committee G) who conducted the inquiry
are listed inside the front cover of the Report. In Appendix 1
we list the declared interests of Members in relation to the subject
of the inquiry.
9. Our Call for Evidence is in Appendix 2. We
are most grateful for the evidence that we received in response
to this; and we thank, in particular, those witnesses who gave
us evidence in person. Those who gave us evidence are listed in
Appendix 3, and the evidence is printed with this Report.
10. We acknowledge with considerable thanks the
expertise and hard work of our Specialist Adviser for the inquiry—Stephen
Crampton—who played a key role in helping us to prepare
the Report.
11. We make this Report for the information
of the House.
1 Commission staff working document: accompanying document
to the Proposal for a Directive of the European Parliament and
of the Council on the protection of consumers in respect of certain
aspects of timeshare, long-term holiday products, resale and exchange:
Impact Assessment SEC (2007) 743 07.06.2007, p. 13 Back
2
Directive 94/47/EC of the European Parliament and of the Council
of 26 October 1994 on the protection of purchasers in respect
of certain aspects of contracts relating to the purchase of the
right to use immovable properties on a timeshare basis. OJ L 280,
29/10/1994 p. 83-87 Back
3
Proposal for a Directive of the European Parliament and of the
Council on the protection of consumers in respect of certain aspects
of timeshare, long-term holiday products, resale and exchange.
COM (2007) 303, 07.06.2007 Back
