TATOC The Timeshare Association

For consumers who paid by debit card and feel they have been missold.

When you pay for goods and services using a credit card or specific loan agreement you are entitled to consumer protection under section 75 of the 1974 Consumer Credit Act.  However, this Act specifically excludes debit cards and charge cards where the whole amount must be repaid each month.  For more information on making claims under the Consumer Credit Act please see TATOC Timeshare Guide No 82.

There is protection for consumers who pay on a debit card through banking procedures known as “chargeback”.  Chargeback is a process that allows you to ask your card provider to reverse a card transaction if there is a problem with the goods you purchased.  Unlike the Consumer Credit Act, however, the provisions allowing chargeback on debit cards are not consumer rights provided by law.  Chargeback isn't a legal protection, but is part of a set of rules which participating banks sign-up to.  Cards covered include Visa, MasterCard, Maestro and American Express, although the detailed application of the rules may differ between card providers.

The main requirement for a claim to be made under chargeback procedures is that there must have been a breach of contract.  For example if the goods/services you paid for are not provided, not provided as agreed, if there has been serious misrepresentation or fraudulent activity, or if the trader has gone out of business.

There are no minimum or maximum limits to the costs of the goods/services but your card provider will have a maximum time period within which you can request a chargeback.  For Visa this is 120 days from when you realise there is a problem with the trader supplying the goods/services, or that the contract is unlikely to be completed (i.e. not 120 days from the date of the transaction).  Other card providers may have different rules so please check up on this.  In general, the sooner the process is started the better.

How to do charge-back:  Contact your card provider with full details of what you purchased and who you purchased it from.  Include full details of precisely what was said to you when you gave your debit card details and include copies of any receipts, documentation or written contracts involved.  Explain very clearly why you are making a claim under the chargeback facility focussing on any specific misrepresentation, false information, fraudulent activity or failure to deliver the goods/services.  Request your bank to instigate the chargeback procedures because of these reasons.

If you contact your bank by telephone or by calling into your bank it is possible the person you speak to will not be familiar with charge-back procedures.  Do not be put off – this is a legitimate system built into banking rules. You may need to press your case or ask to speak to a manager.  If necessary inform your bank you will escalate your complaint if they do not assist you. However, to uphold a complaint they will need to be satisfied that you have a genuine claim for breach of contract or misrepresentation.

To succeed in a claim you need to be able to demonstrate what you bought or were promised and that you did not - or cannot - get what you bought or were promised.  In making a chargeback claim it is important that you are focussed and thorough.  Statements like “we should have known better” or “I wish we hadn't done it” have no place.  If you were deliberately misled by a company whose techniques are designed to do so, or if they failed to deliver what they promised, you have a valid claim under chargeback rules.  If your bank refuses your claim even after a resilient effort on your part you can take your complaint directly to Visa, Maestro, and American Express or to the Financial Ombudsman.  See below. 

TYPICAL EXAMPLES:

The most common complaint we receive is where a so-called 'timeshare resale' company has made an unsolicited call to a timeshare owner offering to buy or to sell their time-share.  On the first or subsequent contact the 'resale' company say they have found a buyer for a grossly inflated price but require the owner to pay an up-front fee, often disguised as a “security deposit” or “bond of trust”.  This deposit is often around £1,000 which they take on a debit or credit card.  Every indication is given that a buyer already exists and that it will be a cash purchase.

A written contract then follows (by e-mail or post) which differs substantially from the oral contract made over the telephone when they took the payment.  The written contract usually makes no reference to the supposed “existing purchaser” but gives the supplier a marketing agreement for up to 12 months.  This is not what was said on the phone.  In these circumstances the consumer made payment to the 'resale' company for the sole purpose, and only for the purpose, of enabling the sale to proceed to an already existing purchaser.  Failure by the 'resale' company to complete this purchase is a breach of contract.  Sending a written contract that is different to the oral contract previously made is misrepresentation and possibly fraudulent.

Another technique employed by such companies is to say they have a purchaser, often a “corporate client”, but that you must attend a meeting to receive the offer.  The meeting may be in the UK or elsewhere in Europe.  Again, every indication is given that the offer will be from a cash purchaser.  However, the meetings turn out to be an aggressive sales pitch where the “offer” turns out to be a part-exchange offer against the purchase of a more expensive product, often a travel membership Club, and often associated with a hugely risky 'cash-back' or 'reclaim certificate' scheme.

In these cases a consumer can claim that the promised cash-purchaser has not been delivered and therefore there has been a breach of contract.  In addition, because there was never any mention that the “offer” would be anything other than a cash purchase, and certainly no indication that they would be subjected to an aggressive marketing pitch, or that the only offer would be one of part exchange against another purchase, the consumer has a valid claim of misrepresentation.

The Financial Ombudsman says:

“Consumers are not generally aware of the circumstances in which a chargeback might be attempted. However, we expect card issuers (who should understand the terms and conditions of their own contracts with the network providers) to consider making a chargeback claim if the consumer has made them aware of a situation where this might be appropriate.”

For further information contact your bank, Visa, MasterCard, Maestro, American Express or the Financial Ombudsman.  For contact details see below:

For card-holder or merchant enquiries, please contact them at: 
e-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it 
Tel: 020 7795 5777 (Monday to Friday, 08.30 to 17.00 GMT)                 

MAESTRO:
Cardholders should initially contact their issuing bank for help and assistance.
General enquiries:
Tel:  020 7557 5000.
Website:  www.maestocard.com

MASTERCARD:
Cardholders should contact their issuing bank for help and assistance.
Tel: 020 7557 5000.
Website:  www.mastercard.co.uk

AMERICAN EXPRESS:
Tel:    01273 696933
Web:    www.americanexpress.com

FINANCIAL OMBUDSMAN: 

e-mail:  This e-mail address is being protected from spambots. You need JavaScript enabled to view it 
(they will usually be able to deal with phone queries on the spot – so phoning might be quicker than emailing).

Postal address:

The Financial Ombudsman Service
South Quay Plaza
183 Marsh Wall
London E14 9SR
Website:  www.financial-ombudsman.org.uk

The above information is for guidance purposes only and if you require any further information, or experience any difficulty with your debit card provider, we recommend you contact a legal professional for additional assistance.

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