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ASIC takes timeshare operator Ultiqa Lifestyles to court 

The regulator maintains Ultiqa's sales practices breached its obligations as an Australian financial services licence holder.

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Last updated: 03 November 2021
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Checked for accuracy by our qualified fact-checkers and verifiers. Find out more about fact-checking at CHOICE.

Need to know

  • Financial regulator takes timeshare scheme to court after CHOICE complaint and multiple investigations uncovering poor practice
  • It’s the first time ASIC has taken legal action against a timeshare scheme for providing non-compliant financial advice 
  • Ultiqa sales reps sold people into schemes with upfront costs of $10,000 to $25,000 and ongoing fees of up to $800 per year

The Australian Securities and Investment Commission (ASIC) has taken legal action against timeshare scheme Ultiqa Lifestyle for providing financial advice that went against the best interests of its members.

It's the first time the regulator has started civil penalty proceedings against a timeshare operator for offering advice that was inappropriate to the recipient's circumstances. 

ASIC deputy chair Karen Chester says, "The timeshare industry is on notice to ensure existing compliance and advice practices comply at all times with the obligations on all financial advisers."

From October 2017 to March 2019, authorised representatives of Ultiqa sold people into schemes with upfront costs from $10,000 to $25,000 and ongoing fees of up to $800 per year, according to ASIC.

Consumer harm ... has resulted when consumers are not aware of the upfront costs, ongoing fees or the nature of their investment

ASIC deputy chair Karen Chester

Many members didn't know what they were getting into.

"Timeshare schemes are complex financial products," Chester says. "They can be difficult to understand and compare with other products, and involve long-term financial commitments. Consumer harm can [result] and has resulted when consumers are not aware of the upfront costs, ongoing fees or the nature of their investment – like how easy, or not, it is to exit [the scheme]."

ASIC also alleges that Ultiqa's conduct amounted to a breach of its obligations as an Australian financial services licensee to act "efficiently, honestly and fairly".

ultiqua sovereign gold coast

CHOICE has been investigating and uncovering poor practices in the timeshare industry since 2016.

'Many potential breaches of law'

"Since 2016, CHOICE has written five complaints to ASIC about potentially illegal conduct within the timeshare industry," says CHOICE director of campaigns Erin Turner.

"CHOICE has observed so many potential breaches of law that we question whether the timeshare industry should be allowed to operate with existing business practices."

In 2017, CHOICE filed a complaint with ASIC after Ultiqa pressured a couple into purchasing a timeshare contract with finance that could have lasted until 2081, despite the individuals telling the operator they were financially stretched.

Timeshare operators typically only recommend one product – their own

CHOICE director of campaigns Erin Turner

In May this year we reported that 70% of the 351 timeshare members we surveyed said their long-term schemes will pass on to their children, who will have to pay the yearly fees.

Almost 30% said they'd like to leave their schemes but can't, and another 12.5% say they're thinking about leaving.

In late October we reported that Classic Holidays, Accor Vacation Club and Ultiqa had elected not to extend the right of hardship relief to their members.

"Timeshare salespeople are providing financial advice," Turner says. "That means they have a legal obligation to act in the best interest of their customers. Despite this, timeshare operators typically only recommend one product – their own."

Although Ultiqa stopped selling interests in January 2020, the scheme remains active.

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