Need to know
- Timeshare operators had the option of adding hardship relief to their constitutions, but three major providers chose not to
- Affected timeshare members say it’s business as usual for the industry
- In better news, Accor Vacation Club says it will no longer force the children of members to continuing paying fees
Major holiday timeshare providers Classic Holidays, Accor Vacation Club and Ultiqa have elected not to extend the right of hardship relief to their members. Their decision forces people trapped in their schemes to continue paying fees for a service they don't want and can't use.
Hardship relief would allow timeshare members to get out of schemes in cases of permanent job loss, ongoing financial hardship or illness. (Without adding the ASIC definition to their constitutions, schemes may still allow hardship relief on a case by case basis, but it won't be mandatory.)
But being let out of a long-term legacy timeshare scheme for hardship reasons can only happen if the member's interest is sold to someone else, a difficult proposition at all times and a near impossibility in the current COVID-19 climate.
Tough market behind operators' decision
Due to an exemption from ASIC regulations, the boards of some timeshare schemes, particularly long-term legacy schemes, have the option of not amending their constitutions to include hardship provisions.
Classic Holidays, Accor Vacation Club and Ultiqa all sent notification to their members in recent weeks saying the respective timeshare boards had voted not to extend the hardship option because, in effect, they wouldn't be able to find new members.
"Classic is not currently selling interests in the Club and does not anticipate it will commence reselling interests in the Club in the foreseeable future," Classic Clubs Limited (the responsible entity for Classic Holidays) says in its notice.
Classic is not currently selling interests in the Club and does not anticipate it will commence reselling interests in the Club in the foreseeable future
Accor Vacation Club's notice says the scheme "has determined, based on existing trends and a decrease in demand for timeshare products, that the responsible entity is likely not capable of achieving the resale of memberships in a timely fashion at the same rate that members may seek to withdraw from the club".
Ultiqa Lifestyle told CHOICE in a statement that it "has elected not to change the constitution to incorporate hardship arrangements but does have a robust hardship policy in place and is happy to work with our members if at any time they suffer hardship".
(In February 2020, Ultiqa stopped selling new members into the scheme, saying "the current economic environment, compounded with proposed regulatory changes, means that it is no longer viable to continue sales activities.")
Hardship relief would allow timeshare members to get out of schemes in cases of permanent job loss, ongoing financial hardship or illness.
Members disappointed, but not surprised
Under ASIC guidelines, the schemes had until 30 September 2021 to make that decision and communicate it to affected members.
Many of the affected members we've heard from are not happy about their scheme's decision, or surprised.
One Classic Holidays member, who recently ended his membership, simply told us, "I am not surprised they are taking steps to close off the hardship option."
Another Classic Holidays member says, "My husband and I have owned the timeshare since 1988 and now wish to conclude our membership. We are no longer able to travel due to health reasons. We are 80 and 76 years old. We have refused to pay the fees for the last four years and do not want to be involved with this company. We are prepared to give it away for no remuneration."
An Ultiqa member says, "We received the letter and were quite pleased when the first paragraph said they were going to help, but further paragraphs said no. As usual they are very determined not to help in any way."
We have refused to pay the fees for the last four years and do not want to be involved with this company
We also heard from a number of Accor Vacation Club members.
"Accor acknowledges that there is a distinct lack of interest in buying timeshares, particularly during COVID," one member told us. "It therefore sees the solution is to deny any help to people who are unable to continue with the membership for financial or other reasons and continue to demand that they pay their annual membership fee."
Another Accor member who's unhappy that hardship relief is off the table says, "We would like to escape but believe it is not possible."
Accor to let members' children off the hook
With the schemes electing not to add a hardship relief clause to their constitutions, we asked Classic Holidays and Accor to outline any relief that may still be available to members in hardship circumstances.
Classic Holidays declined to answer the question.
An Accor Vacation Club spokesperson told us "we will continue to discuss any extenuating circumstances of health or financial hardship, and review any relief available to such members, on a case by case basis".
Accor can no longer force the children of members to keep paying for the scheme after their parents die
"After listening to feedback from our members and their concerns regarding passing on the obligation and rights of the membership to family members upon death, we have changed the club constitution to remove the responsible entity's discretion to cancel memberships upon request following the death of a member. This therefore allows the beneficiary of a membership to decide whether or not they wish to continue with the membership," the spokesperson added.
In other words, while current members are stuck in their schemes regardless of any hardships they may face, Accor can no longer force the children of members to keep paying for the scheme after their parents die, according to the company.
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