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A timeshare purchase is for life

The timeshare purchase – funding difficulties 

James and Jeanette purchased shares in a timeshare club.  Members of a timeshare club are allotted annual vacation credits that can be exchanged for accommodation at the club’s resorts.  In addition to the cost of joining the club James and Jeanette were committed to fortnightly payments of $147.  The agreement James and Jeanette signed did not allow them to cancel their timeshare membership after a 7 day cooling-off period. 

James and Jeanette enjoyed the benefits of club membership for a time, but their financial circumstances changed, and they submitted a hardship application to either withdraw from the club or to defer fortnightly payments until their financial situation improved.  

While the club was considering the hardship application James and Jeanette complained to the club that they were experiencing difficulties booking the accommodation because the club was allowing members of the public to stay at club resorts for less than the cost of club membership.  James and Jeanette felt the club had misrepresented the membership benefits at the sales presentation and it should allow them to withdraw from club membership. 

As a result of making a complaint the hardship application was put on hold.  The club responded that James and Jeanette were provided with information about members of the public using club properties when they joined, and that the terms of the agreement did not allow them to withdraw from club membership.  

The club then recommenced the hardship application process.  Approximately 10 weeks after the hardship application was received, the hardship application was accepted and James and Jeanette were allowed to defer club subscriptions for five months. 


The complaint 

James and Jeanette complained: 

  • the delay in considering the hardship application was very stressful 
  • the club had misrepresented the benefits of belonging to the club by allowing the public to stay at the resorts for less than the cost of club membership. 


FSCL’s review 

We discussed the complaint with both the club and James and Jeanette.  The club agreed the hardship application delay was not ideal, but explained that information given to James and Jeanette before they joined the club said that the public could stay at the resorts.  The club did not accept James and Jeanette ought to be able to cancel their club membership.  James and Jeanette accepted that although they had not noticed it, information about the public using the resorts was available to them before they joined the club.  There did not appear to be any evidence of misrepresentation as initially alleged. 

The club agreed it would like to make a settlement offer in recognition of the stress and inconvenience experienced by James and Jeanette while the hardship application was on hold.  The club confirmed it had since changed its processes and would consider hardship applications and complaints at the same time.  After discussion facilitated by us the club offered, and James and Jeanette accepted: 

  • a further two month deferral of subscriptions 
  • bonus credits with a value of $750 to be used in conjunction with the annual vacation credits, and 
  • a free two night certificate to be used at any club resort.  
  • The complaint was resolved without the need for a formal decision.