The prestigious Radisson Blu, Golden Sands resort in Malta, once part owned by Gary Neville and Ryan Giggs, formerly of Manchester United, is under scrutiny following the discovery that approximately 1444 clients of the resort were sold loan agreements by an unauthorised entity. The loan Agreements were made by Azure Service Ltd between 1 April 2014 and 24 April 2016, but Azure Services Ltd (http://Azure Service Ltd) were not authorised as a licenced broker and therefore should not have arranged or introduced clients to Barclays Partner Finance (BPF).
Unfortunately for BPF this is not the first time they have been associated in Timeshare complaints of mis selling, as they were previously involved in another massive timeshare case with Stewarts Law and 1000´s of mis sold clients of Resort Properties/Silverpoint which also resulted in those clients being refunded. Interestingly, a number of the sales staff in Golden Sands resort formerly worked for either Resort Properties or Silverpoint in Tenerife where they would also have sold the BPF loans, possibly using the same sales techniques.
However, BPF were apparently unaware of this problem until recently so they applied to the Financial Consumers Association (FCA) to have these Azure loans validated or made legal. The validation order was issued but the affected clients appealed, and their legal representatives have managed to force the FCA to apply to the Royal Courts of Justice for a hearing to overturn the validation order as they claim that the loans were mis sold and it will call into question whether BPF can enforce the loans, potentially costing BPF £47 million.
Barclays Partner Finance had a contract with Azure Resorts Ltd which was authorised by the FCA for credit broking, however they were unaware that the staff that were employed by Azure Services Ltd were unlicenced.
On the 1 August 2018 Judge Timothy Herrington issued his judgement; he said that the FCA had acted unlawfully in giving the validation order and he ruled that the FCA did not consider the evidence of “Potential Customer Detriment”.
The Upper Tribunal of the Tax and Chancery heard complaints from customers including:
· that the terms of the loans were not explained fully, many of them believing the loans were only for 2 years until Azure managed to “resell” their purchases.
· no credit checks were carried out comparing affordability of the repayments versus income
· they were “pressured” into signing
· Vulnerable clients were treated inappropriately
· Concerns about commission arrangements and the disclosure thereof
Barclays told the tribunal that in 2017 it only received 63 complaints regarding mis selling regarding their timeshare loan; significantly less than those the resort received from customers who could no longer afford the repayments, others potentially under threat of losing their homes and those who were desperate to sell to recoup the savings they had misguidedly given to Azure. Barclays apparently upheld two of their complaints and is expecting further litigation claims for alleged misrepresentation.
Gary Neville became a non-executive director of Island Hotels Group Holding in 2009 after he and Giggs each invested €1.1 million. The Island Hotels Group owned 50% of the Golden Sands resort and 50% of Azure Services Ltd, which marketed the timeshares and brokered the Barclays loans. Customers have confirmed that the high profile of these celebrity investors was used as part of the “sales pitch” to enhance the image and profile of the timeshare sales programme, in order to give buyers confidence in the products. Neville resigned as a director of Island Hotels in September 2015.
Lawyers dealing with the 1000´s of cases say the loan agreements should be unenforceable and the customers should be able to recover their monies and be entitled to compensation for their losses.
The FCA has apparently said it is not able to comment while it reconsiders the validation order.