The corporate regulator has highlighted the role of advisers in selling timeshare products after a new report found high levels of non-compliance with the best interests duty.
The research from ASIC’s Report 642 involved in-depth interviews with 50 consumers who had all received personal advice to purchase timeshare membership from one of the five main points-based timeshare operators in Australia – Accor Vacation Club, Classic Clubs, Marriott Vacation Club, Ultiqa and Wyndham.
The report explore consumers’ experiences with timeshare from the initial approach and sale through to membership use and the exit process.
It found that, while some research participants were satisfied with their timeshare membership, there was a high level of discontent overall.
ASIC noted that many consumers felt that they were not getting the expected value from their membership and that they had experienced financial stress because of unexpected changes to membership fees or, in some cases, to their personal circumstances.
Further, ASIC also undertook a targeted review of a small sample (20 pieces) of personal timeshare advice provided to consumers between August 2018 and June 2019.
Following the review of the sample, ASIC said it specifically found:
ASIC commissioner Danielle Press noted the role financial advisers play in the sale of timeshare products, saying they must comply with the law and put their clients’ interests first when providing personal advice.
“Timeshare operators need to ensure the way they design and sell their products, provide services and respond to complaints, leads to good outcomes for their members,” Ms Press said.
“We will take action to address mis-selling, poor advice or lending practices that result in significant financial loss to consumers.”
In addition, Ms Press said ASIC is considering regulatory options to deal with the identified consumer harms and reconsidering the policy settings to improve consumer outcomes.
“We are focusing on issues such as the ability for consumers to have their timeshare application voided where it is subject to obtaining finance but finance is not approved or the consumer decides not to proceed with the finance application, exit arrangements for consumers facing hardship and other measures to address consumer harms in this sector,” Ms Press said.
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