Embargo: 00:01 Tuesday 18 December 2007
Contact: Owen Williams 020 7219 8659
LORDS EU COMMITTEE CALLS FOR GREATER PROTECTION FOR CONSUMERS FROM ROGUE HOLIDAY CLUB TRADERS
The House of Lords European Union Committee have today published their report on the European Commission's proposals to protect consumers from rogue holiday club traders.
The Committee welcomes the proposed new directive (which will up-date the existing 1994 EU Timeshare Directive), but calls for the Commission to go further in protecting consumers by extending to 21 days the period during which consumers can cancel an agreement. They also recommend that the information provided to consumers should be improved and that the public should be warned about potential scams in the holiday club industry.
Holiday club products fall outside the current Timeshare Directive and therefore are not subject to the same strict rules. The Office of Fair Trading estimates that bad practice in the holiday club sector has resulted in costs to the UK consumer alone of over £1 billion. Consumers might be asked to pay up-front payments of as much as £10,000 and, in reality, often receive very few benefits.
The Committee asserts that, because purchases are often made on holiday, the proposed 14 day cancellation period is not long enough for customers to reflect on their purchase and to seek professional advice.
The Committee therefore calls for the cancellation period to be extended to 21 days. They also recommend the removal of the proposal that consumers who cancel within the cancellation period should reimburse traders' expenses.
The Committee states that the information requirements imposed by the directive need to be reviewed to ensure that they address key consumer needs. They recommend also that that the EU should work with member states to raise the public's awareness of the existence of potential scams in this industry.
Commenting on the report, Baroness Howarth of Breckland, Chairman of the House of Lords EU Sub-Committee on Consumer Affairs, said:
"We are pleased that the European Commission is looking again at what is an important cross border issue, especially for British citizens.
"While the 1994 Timeshare Directive was an important step forward in consumer protection, it has not been a complete success. Unscrupulous traders have found ways around its provisions, causing harm to 400,000 UK consumers.
"Our view is that the cancellation period after sale must be increased from 14 to 21 days. This would give customers a chance carefully to consider their purchase, and to get expert advice on returning home from holiday in order to ensure that the contracts they have signed are legitimate.
"By increasing the cancellation period and expanding the time-share legislation to cover 'holiday clubs' the EU can make a big contribution to protecting the rights of British and other European citizens."
Notes to Editors
The report Protecting the consumers of timeshare products is available from the Stationery Office, House of Lords European Union Committee (Sub-Committee G) 3rd report of 2007/08, HL Paper 18.
The report will be available online shortly after publication at:
For copies of the report or to request an interview with Baroness Howarth, please contact Owen Williams, Committee Press Officer on 020 7219 8659.