Timeshare Points Systems Could Be Unlawful

There have been a lot of cases recently where timeshare points systems have come up. Some of these systems have been ruled downright illegal, and the law is currently scrutinising this timeshare model closely.

What Is a Timeshare Points System?

When you sign up for a timeshare points system, it may not be called this outright. You’ll probably be sold a membership to an ‘exclusive’ club, which may consist of fractional ownership or a standard points club.

One major issue is that these kinds of clubs are set up by Trust Companies, created to benefit timeshare developers, not you, the consumer.

You will be obliged to pay a substantial upfront fee, which will then subsequently be followed by more obligatory fee payments. Each time you pay fees, ‘points’ are added to your account. You can then use these points to spend on holiday accommodation, that is – if what you want is actually available. Many of the cases coming to court include the complaint that the accommodation is rarely available, if at all. In some cases, it does not even exist.

Timeshare Points and Availability

The availability of accommodation is controlled by the resorts, and if they make the decision to make certain weeks or resorts unavailable, or simply offer them to non-members as priority, you’re out of luck. Some resorts employ this tactic as non-member guests are preferable to them, as they can sell them the same product they sold you! Such action would amount to you not getting what you paid for, and thus illegal.

Are Timeshare Points Systems a Scam?

The unclear, complicated terms and conditions of timeshare points systems are part of what is putting them under the legal spotlight. A recent case involving Diamond Resorts’ timeshare points system was settled out of court, ruling that the company should pay out $800,000 in timeshare compensation for its illegal contracts.

In South Africa, timeshare points systems have been labelled as a scam, whilst the EU in Europe has encouraged consumers to challenge their timeshare points system contracts. It is strongly suggested that there is no benefit whatsoever to consumers from this points system.

An inquiry is due to start soon, lasting about six months, in which a panel of experts and a retired judge will examine the holiday ownership industry (i.e. timeshare) thoroughly. In another promising move, an entire conference in Spain in April 2017 will gather legal representatives from all over the world to consider the legal implications of timeshare points systems, and other matters related to the industry.

An array of companies offering timeshare points systems have been asked for proof that these systems offer any value. So far, absolutely no such proof has been forthcoming. The fact that Diamond Resorts chose to settle out of court speaks volumes.

Consumer Protection Regulations prohibit suppliers from misrepresenting their product to consumers using misleading sales tactics. In cases where this has happened, the contract can be legally nullified.

If you are in a timeshare points system contract, then you should seek advice regarding the legality of your contract. If you have been misled, cannot get the holidays you paid for, or otherwise received no value from your timeshare product, it’s important to take action. Knowing the courts are hot on these types of contracts stands you in good stead for success in court, with the possibility of timeshare compensation likely.


If you think you could be entitled to compensation for timeshare, get in touch with us. We’ll be able to help you proceed in the right direction, and offer you all the facts and advice you’ll need to get the result you are looking for. Find out more about claiming with a chat with one of our friendly advisors. Just fill in the form below:



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