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Timeshare owners take members club to High Court over ‘skimming off’ claims

Test case may provoke 'long-overdue shake up in opaque world of timeshare exchange companies', says Edwin Coe litigator

9 May 2016

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Around 500 claimants will bring a High Court action against a timeshare exchange club over alleged 'skimming off' of members' properties.

RCI Europe is accused of renting out the most desirable properties to others while retaining the rental funds for its own benefit, rather than making them available to club members.

Furthermore, select timeshares were routinely made available for use by RCI employees through incentive reward schemes.

The claimants state this often left them unable to exchange their right to use a holiday property for an alternative holiday property in a different location of the same value.

The claimants allege that RCI's actions amount to prejudicial conduct against the interests of exchange club members and breached its implied fiduciary duties of care.

The test case concerns four claimants from a class of 487. However, a further 9,000 people may be affected by the judgment.

Claimant Jennifer Kravitz claims RCI repeatedly informed her that there were no properties available despite making reservation requests well in advance.

The claimants' solicitors contend that one reason for the failure to provide alternative exchange properties was because the best properties in the pool were being 'skimmed off'.

Initially RCI said it was selling members' timeshares in order to buy in other timeshares. It has, however, now accepted that it was selling timeshares to make a profit.

David Greene, the head of group action litigation at Edwin Coe and who is representing the claimants, said: 'All timeshare owners want when entering an exchange system is a simple, transparent and effective way of swapping their right to use a property for the right to holiday at another residence of similar quality, within a reasonable timeframe.

'RCI, despite boasts of its large property exchange pool, seems to consistently thwart this reasonable expectation.'

Greene said he wanted to reveal the truth behind RCI's failure to allow its members to access a property of their choice.

'We intend to expose these unfair practices at trial, and expect to succeed in securing rightful compensation for thousands of frustrated holidaymakers. This case may provoke a long-overdue shake up in the opaque world of timeshare exchange companies.'

RCI Europe has over 700,000 members and more than 3.7 million globally. Members worldwide will therefore be paying close attention to the outcome. Two class action settlements have already been reached in America against RCI over the conduct of its exchange pool.

A spokesperson for RCI said: 'RCI believes the claims to be unfounded and that the evidence will demonstrate as much. Beyond that we have no other comment at this time as it is our policy to not discuss ongoing litigation.'

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