Timeshares: a brief look
Often when there's a sales campaign to sell holidays and accommodation through timeshares, FIDO gets questions about consumers' rights. Here we take a brief look at what's involved.
How timeshares are regulated
In general Australian law regards timeshare schemes as managed investments. The scheme operator must hold an Australian financial services licence and must give you a product disclosure statement about the scheme that tells you all that you or your adviser would need to know to make an informed decision.
What's a managed investment?
Timeshare operators must also belong to an external dispute resolution scheme.
Investment or lifestyle?
Like any other managed investment, you must decide if the scheme suits you. ASIC does not guarantee any scheme and we do not judge the quality or security of your investment.
Although they are legally structured as an investment, timeshares are usually a lifestyle or holiday choice. Broadly speaking, unlike shares or managed investments that trade on the Australian Securities Exchange, there is no real secondary market where other consumers or investors buy and sell timeshares. If you want to sell your timeshare you may not get a lot for it, so it's probably sensible to see a timeshare as an illiquid investment that may prove hard to sell.
Be wary of the hard sell
Timeshare schemes can also be sold using hard-sell sales techniques, and ASIC has received complaints about this, and we have had to step in and act on some occasions. Timeshares are often sold at seminars which people attend after 'winning' a holiday away (or the like), and you may not realise that taking up your 'prize' is effectively conditional on being put through a high pressure sales session.
Be wary of such tactics.
You do not have to sign on the dotted line today. You have a right to a seven-day cooling off period after signing, unless the timeshare operator is not an ATHOC member, in which case a 14-day cooling off period applies. Days are calendar days.
The salesperson should inform you of that right.
The Product Disclosure Statement and application form should prominently disclose the cooling-off period. You will be asked to sign an acknowledgement that you have received the cooling-off statement.
ATHOC stands for the Australian Timeshare and Holiday Ownership Council. Check the ATHOC members' directory on the ATHOC website.
Read what FIDO has said about investment seminars
FIDO Website: Printed 09/07/2010
