“Working Together” March 2010 NEW TIMESHARE DIRECTIVE: PREPARING FOR 2011

“Working Together” March 2010 IN THE BEGINNING THERE WAS TIMESHARE

“Working Together” March 2010 THE NEW TIMESHARE DIRECTIVE AND TIMESHARE WAS GOOD

“Working Together” March 2010 THE NEW TIMESHARE DIRECTIVE

“Working Together” March 2010 OUR BELIEF The future of timeshare is crucially dependent on a better understanding, relationship and trust between timeshare consumers and ALL aspects of the timeshare industry And that begins at point of sale

“Working Together” March 2010 LEGISLATION UK TIMESHARE ACT EU DIRECTIVE (94/47/EC) TIMESHARE REGULATIONS REVISION TO TIMESHARE ACT 2006 – EU COMMISSION CONSULTATION PROCESS PROPOSAL ADOPTED BY COMMISSION (OCTOBER) EU PARLIAMENT ADOPTED NEW DIRCTIVE AT FIRST READING (FEBRUARY) NEW DIRECTIVE CAME INTO FORCE (2008/122/EC) (FEBRUARY 23rd) IMPLEMENTATION OF 2008/122/EC

“Working Together” March 2010 TARGET OF NEW DIRECTIVE IT'S ESSENTIAL TO RECOGNISE: The principle target of the consultation paper and subsequent legislation IS NOT the reputable, well established, timeshare product or the reputable timeshare industry and businesses

“Working Together” March 2010 PRINCIPLE TARGETS  Holiday Clubs (DTMC & LTHP )  Scam resale companies ALSO:  Timeshare catch-up (sales & marketing)  Exchange ALSO:  Harmonisation

“Working Together” March 2010 THE STRUCTURE OF DIRECTIVES “Having regard to” Prevailing economic/political/legislative environment “Whereas:” Background – driving motivation – objectives “Have adopted” Detailed articles Annexes Detailed information and forms

“Working Together” March 2010 OBJECTIVES OF NEW DIRECTIVE BACKGROUND DRIVING MOTIVATION AND OBJECTIVES “Whereas:” Why was there a need for the New Directive

“Working Together” March 2010 WHY NEED A NEW DIRECTIVE “Timeshare has evolved and new holiday products similar to it have appeared on the market”

“Working Together” March 2010 WHY NEED A NEW DIRECTIVE “These new holiday products and certain transactions related to timeshare, such as resale contracts and exchange contracts, are not covered by Directive 94/47/EC.”

“Working Together” March 2010 WHY NEED A NEW DIRECTIVE “experience with the application of Directive 94/47/EC has shown that some subjects already covered need to be updated or clarified, in order to prevent the development of products aiming at circumventing this Directive

“Working Together” March 2010 WHY NEED A NEW DIRECTIVE “The existing regulatory gaps create appreciable distortions of competition and cause serious problems for consumers”

“Working Together” March 2010 HELPLINE COMPLAINTS AUGUST TO JANUARY

“Working Together” March 2010 HELPLINE TOTAL-CASES AUGUST TO JANUARY

“Working Together” March 2010 THE NEW TIMESHARE DIRECTIVE WHAT THE NEW DIRECTIVE MUST DO

“Working Together” March 2010 WHAT THE DIRECTIVE MUST ACHIEVE “productivity in the timeshare and long-term holiday product industries should be encouraged by adopting certain common rules”

“Working Together” March 2010 WHAT THE DIRECTIVE MUST ACHIEVE “certain aspects of the marketing, sale and resale of timeshares and long-term holiday products, as well as the exchange of rights deriving from timeshare contracts, should be fully harmonised”

“Working Together” March 2010 WHAT THE DIRECTIVE MUST ACHIEVE “Member States should not be allowed to maintain or introduce in their national legislation provisions diverging from those laid down in this Directive”

“Working Together” March 2010 WHAT THE DIRECTIVE MUST DO “The different contracts covered by this Directive should be clearly defined in such a way as to preclude circumvention of its provisions”

“Working Together” March 2010 THE NEW TIMESHARE DIRECTIVE

“Working Together” March 2010 TIMESHARE CATCH-UP  Boats and planes etc  Trial products  Third party deposits  Points products  Close gaps to avoid circumvention  Better consumer information  Harmonisation

“Working Together” March 2010 MAIN ARTICLES 2) DEFINITIONS 3) ADVERTISING 4) PRE-CONTRACTURAL INFORMATION 5) THE CONTRACT 6-8) RIGHT OF WITHDRAWAL 9) ADVANCE PAYMENTS 12) IMPERITIVE NATURE 13) JUDICIAL REDRESS 15) PENALTIES

“Working Together” March 2010 DEFINITIONS - ARTICLE 2 “TIMESHARE” ‘timeshare contract’ means a contract of a duration of more than one year under which a consumer, for consideration, acquires the right to use one or more overnight accommodation for more than one period of occupation

“Working Together” March 2010 DEFINITIONS - ARTICLE 2 TIMESCALES In calculating the duration of a timeshare contract or a long-term holiday product contract, any provision in the contract allowing for tacit renewal or prolongation shall be taken into account

“Working Together” March 2010 PRE-CONTRACTURAL INFORMATION (4) In good time before the consumer is bound by any contract or offer, the trader shall provide the consumer, in a clear and comprehensible manner, with accurate and sufficient information, as follows: 1) For timeshare – Annex 1 (3 parts, 3 pages) 2) The information referred to in the annex shall be provided, free of charge, by the trader on paper or on another durable medium which is easily accessible to the consumer. 3) Language – can be requested in any official language of the EU NB: From Article 3 “The information referred to in Article 4(1) shall be available to the consumer at any time during the event.”

“Working Together” March 2010 PRE-CONTRACTURAL INFORMATION (4) LOOK AT ANNEX 1 VERY CAREFULLY:  The rights acquired  Full details of the product and properties  The facilities  Costs – including all fees (utility charges, maintenance fees, additional charges.....)  Exit route  Much more The consumer must sign to acknowledge receipt.

“Working Together” March 2010 ADVERTISING – ARTICLE 3 1. Member States shall ensure that any advertising specifies the possibility of obtaining the information referred to in Article 4(1) and indicates where it can be obtained. 2. Where a timeshare, long-term holiday product, resale or exchange contract is to be offered to a consumer in person at a promotion or sales event, the trader shall clearly indicate in the invitation the commercial purpose and the nature of the event. 3. The information referred to in Article 4(1) shall be available to the consumer at any time during the event. 4. A timeshare or a long-term holiday product shall not be marketed or sold as an investment.

“Working Together” March 2010 CONTRACT – ARTICLE 5  Language – articles 4 & 5 – can be requested in any official language of the EU (4 possibile justifications). May need more than one  Annex 1 forms part of the contract  Draw specific attention to articles 6 and 9 and be separately signed (withdrawal and deposits)  Include a standard withdrawal form (annex 5)  Consumer must receive a copy of contract at the time of conclusion

“Working Together” March 2010 WITHDRAWAL – ARTICLES Right to withdraw In addition to the remedies available to the consumer under national law in the event of breach of the provisions of this Directive, Member States shall ensure that the consumer is given a period of 14 calendar days to withdraw from the timeshare, long- term holiday product, resale or exchange contract, without giving any reason.

“Working Together” March 2010 WITHDRAWAL – ARTICLES Withdrawal period - standardised across EU 14 calender days from completion of contract or Days from the date the consumer receives the contract if later or months + 14 days if any failure on pre- contractual information or months + 14 days if no withdrawal form provided

“Working Together” March 2010 WITHDRAWAL – ARTICLES In addition, Member States shall provide for appropriate penalties in accordance with Article 15, in particular in the event that, on expiry of the withdrawal period, the trader has failed to comply with the information requirements set out in this Directive. On exercising withdrawal consumer shall bear no cost or be liable for any value of the service performed prior to withdrawal

“Working Together” March 2010 DEPOSITS – ARTICLE 9 Any advance payment, provision of guarantees, reservation of money on accounts, explicit acknowledgment of debt or any other consideration to the trader or to any third party by the consumer is prohibited: * For timeshare, long-term holiday product and exchange contracts before the end of the withdrawal period. * For resale, before the actual sale takes place or the resale contract is otherwise terminated.

“Working Together” March 2010 IMPERITIVE NATURE AND INTERNATIONAL CASES - ARTICLE 12 1) where the law applicable to the contract is the law of a Member State, consumers may not waive the rights conferred on them by this Directive

“Working Together” March 2010 IMPERITIVE NATURE AND INTERNATIONAL CASES - ARTICLE 12 2) Where the applicable law is that of a third country, consumers shall not be deprived of the protection granted by this Directive, as implemented in the Member State of the forum if: * any of the immovable properties concerned is situated within the territory of a Member State, or, * in the case of a contract not directly related to immovable property, the trader pursues commercial or professional activities in a Member State or, by any means, directs such activities to a Member State and the contract falls within the scope of such activities.

“Working Together” March 2010 REDRESS – ARTICLE 13 Provision is made for action to be taken within national laws by one or more of the bodies below to ensure that the provisions of the Directive are applied. Public bodies and authorities or their representatives Consumer organisations with a legitimate interest in protecting consumers Professional organisations with a legitimate interest in taking such action Out of court redress – Article 14

“Working Together” March 2010 PENALTIES – ARTICLE 15 Member States shall provide for appropriate penalties in the event of a trader’s failure to comply with the national provisions adopted pursuant to this Directive. Those penalties shall be effective, proportionate and dissuasive.

“Working Together” March 2010 OTHER LEGISLATION National contract law Unfair commercial practices Directive 2005/29/EC Consumer Credit Legislation * Directive 2008/48/EC and council of 28/4/2008 * CCA 74 last updated in 2006 Contracts negotiated away from business premises Directive 85/577/EEC 1985 (updated 2007)

“Working Together” March 2010 CAUTION The word “Investment”

“Working Together” March 2010 CAUTION If you sign a consumer up to RCI/II/DAE … membership as part of a timeshare purchase you may have to comply with the requirements of the Directive as though you were the exchange company

“Working Together” March 2010 BE AWARE THERE ARE ALREADY LOOPHOLES Scam legal companies  who claim they can recover money  say they are holding money  class action scams Rental offers Takeover offers Illegal actions

“Working Together” March 2010 NEW TIMESHARE DIRECTIVE: PREPARING FOR 2011

“Working Together” March 2010 PREPARING FOR 2011 THE CHALLENGE ISN'T: “How are we going to manage/survive these changes” THE CHALLENGE MUST BE: “How are we going to maximise this opportunity”

“Working Together” March 2010 PREPARING FOR 2011

“Working Together” March 2010 PREPARING FOR 2011 Embrace the change – it IS going to happen It has been done to PROTECT the consumer and the reputable timeshare industry Take every new requirement and make it into a marketing POSITIVE Quality companies have nothing to fear.

“Working Together” March 2010 PREPARING FOR 2011 START NOW Study and dissect the Directive Do a comprehensive gap analysis Make urgent plans to close all gaps Communicate and train Put it in place Challenge what you have done

“Working Together” March 2010 CAN WE HELP? We are happy to work with any Resort Committee, Developer or Management Company who would like information, assistance or an evaluation to assess their readiness for the new Directive, and to identify requirements This was really helpful to us all, even me who’s not part of the sales team.

“Working Together” March 2010 THE ANSWER YOU HAVE TO DO THIS (FEB' 2011) YOU SHOULD WANT TO DO THIS DO IT WITH ENTHUSIASM BE PROUD OF YOUR ACHIEVEMENT MAXIMISE THE NEW OPEN, HONEST AND INFORMATIVE APPROACH TO CONSUMERS AS A MARKETING POSITIVE

“Working Together” March 2010 THE ANSWER YOU CAN'T FIGHT EVOLUTION THE ONLY ANSWER IS TO EVOLVE