Unregulated timeshare exit company shut down after misleading hundreds of clients
Company wound-up in the public interest after investigations by the Insolvency Service
- Timeshare Legals Limited offered to help people exit their timeshare contracts and claim for mis-sold agreements
- They convinced clients to pay upfront fees of typically £5,000 based on false assurances about how strong their claims were
- Many of the claims ultimately turned out not to be valid, despite what the company representatives said during the sales process
A company which claimed to help people exit their timeshare contracts has been shut down after misleading clients about the strength of their cases and convincing them to pay upfront fees of thousands of pounds.
Timeshare Legals Limited was wound-up following investigations by the Insolvency Service which also revealed the transfer of client funds to a company in Spain with the same name, Timeshare Legals SL, and the same director, creating a lack of transparency.
The business was set up in October 2018 for people wishing to terminate or claim for mis-sold timeshare agreements, mainly in Tenerife.
Clients were charged upfront fees plus a percentage of any recoveries.
However, many of the claims where upfront fees had been taken never had any realistic chance of being successful and were assessed without proper engagement from lawyers.
Timeshare Legals was wound-up at the High Court in London on Tuesday 16 April.
Mark George, Chief Investigator at the Insolvency Service, said:
Timeshare Legals deceived hundreds of people who wanted to exit or claim for mis-sold timeshare agreements into paying upfront fees for what were ultimately futile cases.
Their obvious record-keeping deficiencies and failure to pay funds over to appointed lawyers has clearly hindered progress and damaged clients’ prospects of ever recovering money.
The company provided very limited co-operation with our investigation, failing to produce any trading or financial records, resulting in investigators being unable to establish the legitimacy of, or the reasons for, the transfer of more than £900,000 to unknown accounts. We will not hesitate to act in the public interest to wind-up rogue businesses causing individuals financial loss and harm.
Investigations by the Insolvency Service established clients were persuaded to pay an upfront fee to Timeshare Legals based on assurances about the strength of their case which had taken place without any legal review.
A significant number of the 440 overall claimants in reality did not have potential timeshare claims but the upfront fee had been charged before any assessment could be completed.
Many of the cases had no jurisdiction in Spain, related to cancelled or relinquished contracts which could not be litigated, or were ongoing cases with another firm.
In some cases where Spanish lawyers working with Timeshare Legals were able to obtain information required for a claim, the legal fees were not paid by the company, resulting in the cases not being issued.
Some clients were told by Timeshare Legals that their claims were being progressed even though the lawyers were not acting because the timeshare agreement was not governed by Spanish law.
Cold-calling techniques were also used by the company, with further evidence indicating clients were encouraged to waive the 14-day cooling off period after signing a contract with Timeshare Legals so work on the claim could begin straight away.
Insolvency Service investigations have been unable to identify where funds of more than £3.75 million which passed through the company bank accounts went to due to a lack of trading and financial records being provided.
A total of 244 claims were known to be ongoing at the end of 2023, 41 of which were with a Spanish law firm and the remainder with two other claims management companies.
The company has no presence at its registered office in North London and is uncontactable by clients seeking an update on their claim.
The Official Receiver has been appointed as liquidator of the company.
All enquiries concerning the affairs of the company should be made to the Official Receiver of the Public Interest Unit: 16th Floor, 1 Westfield Avenue, Stratford, London, E20 1HZ. Email: [email protected], quoting liquidation number LQD7116021.
Further information
- Timeshare Legals Limited (company number 11602454)
- The Insolvency Service can investigate complaints about corporate abuse by live companies. This may include serious misconduct, fraud, scams or dishonest practice in the way the company operates. Further information on our live investigations can be found here
- Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available here.