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Ultiqa timeshare sales tactics breached financial advice laws

In a groundbreaking case, the Federal Court has ruled that Ultiqa salespeople broke the law when selling timeshare products.

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Last updated: 18 May 2022
Fact-checked

Fact-checked

Checked for accuracy by our qualified fact-checkers and verifiers. Find out more about fact-checking at CHOICE.

Need to know

  • CHOICE has lodged five official complaints with the Australian Securities and Investments Commission (ASIC) about timeshare schemes since 2016
  • In 2021, we lodged a ‘super complaint’ to ASIC, alleging at least eight industry-wide breaches of financial services laws 
  • Now the Federal Court has found that the timeshare scheme Ultiqa failed to take the best interests of target customers into account by leading them into schemes they couldn’t afford 

Pressure sales tactics have long been standard procedure at holiday timeshare seminars, with attendees pushed to sign up on the spot, hand over up to $25,000, and commit to hefty yearly fees.

Many come to regret falling prey to the timeshare hard sell, and end up stuck in schemes they don't want and can't use. Some are locked in for up to 99 years and will see their schemes pass on to their children.

CHOICE has been exposing deceptive practices in the timeshare industry since 2016

CHOICE has been exposing deceptive practices in the timeshare industry since 2016. Since then, we've lodged five official complaints with the Australian Securities and Investments Commission (ASIC), alleging unlawful conduct in the industry.

'Super complaint'

In 2021, we lodged a 'super complaint' to ASIC, alleging at least eight industry-wide breaches of financial services laws. (A super complaint highlights a longstanding systemic issue within an industry.)

At the same time, we published the results of our timeshare customer survey, based on the input of hundreds of timeshare members – a significant portion of whom said they wanted to exit their schemes but couldn't.

Verdict – Ultiqa breached financial advice laws

One of our earlier complaints to the regulator focused on the quality of financial advice given by salespeople for the timeshare scheme Ultiqa Lifestyle.

ASIC followed up and has now won a case in Federal Court against Ultiqa Lifestyle Promotions, the part of the business that set up financing for new members.

Pressure sales tactics... encouraged sales agents to 'corner' consumers into investing in a timeshare scheme that many could not afford

ASIC deputy chair Karen Chester

The Court found that Ultiqa salespeople breached financial services laws by failing to make sure the advice they gave prospective timeshare members was in their best interests.

ASIC hails 'important decision'

"This is an important decision for consumers and ASIC's first financial advice action against a timeshare provider," says ASIC deputy chair Karen Chester.

"Pressure sales tactics used, and even documented in their sales manuals, encouraged sales agents to 'corner' consumers into investing in a timeshare scheme that many could not afford. 

"Despite paying tens of thousands of dollars in upfront costs and ongoing fees, many could not even book holidays in their timeshares due to lack of availability – meaning they got nothing for their money."

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CHOICE research has found that paying for holiday accommodation each time you go is much better value that signing up to a timeshare scheme.

Ultiqa sales manual: 'Do not let them leave'

During court proceedings, sections of the sales manual used at Ultiqa's timeshare seminars came to light, offering a glimpse into a sales culture that characterises the industry as a whole.

These sorts of practices are rife across the timeshare industry, so this decision sends a huge warning to other timeshare salespeople and operators

CHOICE CEO Alan Kirkland

One section reads: "Once your client is on the Sales Deck they come to the grim realisation that this is a sales environment and what is going through their mind is 'How can we get out of here?', and, if you give them the chance, they will. DO NOT GIVE THEM THE CHANCE! Do everything you can do to amuse, interest, excite, relax, humour, flatter and if necessary cajole your clients into staying."

Many who stayed and signed up are still looking for a way out of their schemes, with no help from their timeshare providers. 

Timeshare industry 'now on notice', says CHOICE

Based on our ongoing research and investigations, the findings against Ultiqa highlight common practices.

"These sorts of practices are rife across the timeshare industry, so this decision sends a huge warning to other timeshare salespeople and operators," says CHOICE CEO Alan Kirkland.

"The timeshare industry is now on notice. Its sales practices and contract terms need to change – otherwise operators should expect more court action."

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