Could your dream timeshare plan turn into a financial nightmare? A recent crackdown on a fraudulent company underscores the potential dangers.
On Tuesday, April 16, the High Court in London ordered the closure of Timeshare Legals Limited, following a detailed investigation by the Insolvency Service.
The firm, set up in October 2018 and primarily operating in Tenerife, falsely promised to assist clients in exiting timeshare agreements and pursuing mis-sold claims.
False assurances and upfront fees
Mark George, Chief Investigator at the Insolvency Service, remarked, ‘Timeshare Legals deceived hundreds into paying upfront fees for what were ultimately futile cases.’
The company frequently convinced clients to pay significant fees, typically around £5,000, based on misleading information about the strength of their claims—claims that often had not undergone proper legal review.
Mismanagement and lack of transparency
Further investigation uncovered that Timeshare Legals Limited transferred over £900,000 to unknown accounts, with an additional lack of clarity surrounding the transfer of funds to Timeshare Legals SL in Spain, which shared the same director.
George highlighted, ‘Their obvious record-keeping deficiencies and failure to pay funds over to appointed lawyers has clearly hindered progress and damaged clients’ prospects of ever recovering money.’
The investigators struggled to trace over £3.75 million that had moved through the company’s accounts due to insufficient financial documentation.
Misleading clients
The company also used aggressive cold-calling techniques to acquire clients and encouraged them to waive their 14-day cooling-off period to expedite the claims process.
By the end of 2023, 244 claims were still pending, with 41 handled by a Spanish law firm and the remainder distributed among two other claims management companies.
Many clients were misled about the progress of their cases, with the firm falsely stating that Spanish lawyers were actively working on claims that, in fact, fell outside Spanish jurisdiction or pertained to contracts that had already been cancelled or relinquished.
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