El Diario - Spanish press
Justice investigates a million-dollar scam against tourists in the south of Tenerife
Translation from El Diario:
The amount defrauded would exceed 12 million euros, according to the law firm that represents the 233 families that have joined the complaint against a timesharing company.
The Court of Instruction 3 of Arona has charged 20 people and has already summoned two of them to testify.
Clients invested substantial amounts of money with the promise of a lucrative future resale that “never came to fruition.”
The Court of Instruction number 3 of Arona, in the south of Tenerife, investigates an alleged scam to tourists in the sale of timeshare vacations - timesharing - after a complaint filed in April 2011 against the British group Resort Properties and its delegation. Spanish, Silverpoint Vacations SL. The amount defrauded would exceed 12 million euros, according to Canarian Legal Alliance, the law firm that represents the 233 families who have joined the complaint and who claim to be victims of deception.
So far, 20 people have been charged, including managers, sales managers and commercial agents. This Thursday, two of them were summoned to testify: Mark Cushway, who was executive director of the Resort Properties group and is currently CEO of Silverpoint Vacations, and Francisco Alonso Andújar, attorney for the same company. However, the former's appearance has been suspended until November 14 because he has proven that he is out of the country.
According to the complaint, the Resort Properties Group sold tourist accommodations by the week as high-profit investment products, with the promise of a lucrative resale.
Customers invested substantial amounts of money in the hope of earning a profit from a future weekly sale. However, when they went to the company to inquire about the status of their investment, Resort Properties informed them of the sales jam and proposed a new investment as the only solution, always according to their testimony. “In no case were the resales carried out as promised,” say those affected, who in the meantime had to face high maintenance fees (up to 600 euros per week).
For the complainants, the company's actions responded to a preconceived plan: "When a client is informed that the investment package is worthless and cannot be sold, investment products continue to be sold to other clients." To do this, according to an industry insider, they used affiliation with a supposed consumer protection organization that “reinforced the appearance of reality and truthfulness” and took advantage of “the trust and good faith” of buyers.
The lawyers emphasize that the businessmen have been carrying out this commercial activity for decades and that “they know perfectly well that there is no market for the resale of rights.” Knowing this circumstance, “their sales techniques were based entirely on the supposed lucrative resale of the weeks.”
The complaint exposes a series of indications that, in the opinion of those affected, demonstrate that the company did not sell the packages for weeks for the use and enjoyment of tourists, but rather as an investment product. Firstly, the object of the purchase: the sale occurred in non-consecutive weeks and neither the season, nor the size of the apartments nor the complex coincided.
In addition, as part of it, the company gave away a week in another accommodation in a Tenerife club of the same group. “If you take into account that the clients had just purchased a multitude of weeks, the gift makes no sense, since vacation enjoyment should already be guaranteed,” the complainants assert.
On the other hand, the company used to guarantee in the first year of use of the weeks the rental of them for an amount of several thousand pounds, "which reinforced the impression of the value that those weeks supposedly have." However, after this period, the lease “was not carried out again.”
Finally, they specify that five of the fourteen clauses of the declaration of conformity of the contracts refer to the resale of the weeks and that the period in which this should be carried out was not guaranteed.
The firm that represents the British tourists who are victims of the alleged scam also defends that this plot contains some aggravating elements, such as that the majority of the clients were pensioners and that several of them had deposited their entire life savings in these products.
“Promises or false expectations are repeated ad nauseam verbally, but they are never reflected in contracts. The defendants knew in advance that they were not going to fulfill their part of the business: the lucrative resale of said weeks,” concludes the document presented to the court.
Letter rogatory to the United Kingdom
The head of the Court of Instruction 3 of Arona, Roi López Encinas, has raised, at the request of the complainants, a rogatory commission to the United Kingdom so that the British judicial authorities can request information from the Barclays banking entity about the contracts signed with Resort Properties and Silverpoint to facilitate loans to clients of this company.
The complainants suspect that the financial institution could have benefited from these financing operations with timesharing clients . At the moment, they have requested from Barclays a bond of 919,000 euros corresponding to the interest paid by the alleged victims of the scam under the credits taken out to be able to pay for the weeks.
The original article can be read here.