Appearing at a parliamentary committee hearing on Friday, ASIC deputy chair Karen Chester said while the regulator’s planned consultation on regulatory changes in the timeshare sector had been sidelined by the COVID pandemic, it was still “monitoring” practices and would “make a determination as to whether the industry is behaving”.
“We did a substantive paper towards the end of 2019 and had findings of significant detriment and harm, and that informed work we were planning to do to consult further on what policy changes may need to be implemented,” Ms Chester said.
“We have made public that there is an investigation underway, and as the industry knows we are investigating one major operator in respect of its advice and sales practices and we expect to file proceedings in court.”
ASIC’s Report 642 into consumers’ experiences with timeshare indicated that despite timeshare schemes falling under financial services licensing obligations, consumers were unaware they were receiving advice when being sold the products, with few recalling whether they received an SOA and none saying their needs were discussed in the process.
The consumer advocacy group Choice also filed a “super-complaint” with the corporate regulator around practices in the timeshare industry in May, with the group’s research revealing one in three consumers were being restricted from exiting timeshare products and 70 per cent said debts from the products were likely to pass across to their children.
Ms Chester said while Choice’s submission had contained “dated information” around consumer experiences, the regulator was keeping a close eye on whether further action needed to be taken to reign in industry practices, after releasing updated regulatory guidance to the sector in December 2020.
“We have heightened the limbo bar with the guidance we put out a few months ago, we have an investigation underway and we’ve made it clear if they don’t clean up their act we will consider if we go to a deferred sales model,” she said.
I attended and time share event in Feb 2020 follwed by a one on one consultation with a sales representative. The only standard they didn’t breech was… well none . They breeched them all !!!! 😳
ASIC has evidence of significant detriment and harm, officially from 2019, but as everyone knows this goes back much further. Yet they have done nothing. Remember that when you pay your ever increasing ASIC levy and worry day and night about losing your livelihood because you didn’t give a client a FSCG in the right format.
Last week we had a Senator referring to financial advisers as ‘shonky’, perhaps the Senator was confused and was thinking about these Time Share salespeople and schemes?
For the life of me, I do not understand why the ‘shonkyness’ of Time Share is lumped in with the ‘professionalism’ of Financial Advice in the legal and regulatory instruments that govern our industry.