THE UK’s Office of Fair Trading (OFT) yesterday warned Cyprus to stamp out bogus holiday clubs before they take hold and damage the tourist industry.
Holiday or ‘vacation’ clubs are an offshoot of timeshare activities. They emerged when the EU brought strict legislation to protect consumers from timeshare.
In response to the emergence of holiday clubs, the EU is now in the process of incorporating them into timeshare regulations.
But in the meantime, consumers, especially tourists, are open to being scammed for thousands of euros with the promise of cheaper future holidays. Lack of legislation means victims do not have the requisite ten-day cooling off period to change their minds.
Mike Haley, the Director of the OFT’s Consumer Protection Division, was attending a seminar in Cyprus organised by the Commerce Ministry’s Consumer Protection Service (CPS): he said that in 2006 holiday clubs cost Britons £1.1 billion sterling, with 400,000 people falling for the scam. Most victims were between 35 and 64 years old, he said.
“On holiday, people are in a different frame of mind and it makes them less cautious,” said Haley. “The presentations given are long and grind people down and are based on psychological profiling. Many people sign up just to get out of there.”
Haley said that bogus clubs were an EU-wide problem, and they had started moving into Cyprus.
“Cyprus has all the factors to make it attractive for bogus holiday clubs,” he added.
CPS Director Christos Malikkides said that to combat the problem arising in Cyprus, newly-printed information leaflets warning about the activity of holiday clubs would be distributed to tourists this year.
“The bogus holiday club schemes, also known as discount travel memberships clubs, are affecting the tourist industry to Cyprus, the UK, Spain and other countries,” said Malikkides.
Haley said it was good that the government had an interest in the issue, but, without enforcement, that would amount to nothing.
“You need to take action quickly to stamp on it before it can take hold, and you will save yourselves problems for years to come,” he told delegates.
“A lot of British consumers come to Cyprus. You want to send them back with good memories, not with a bad taste in their mouths,” he added.
Another CPS official, Christos Solomonides, asked Haley what Cyprus could do until the holiday clubs were included in the EU legislation.
Haley advised using existing consumer legislation against misleading representation or unfair practices.
He warned, however, that the new EU amendment was not a panacea. It would only provide a framework for the legal operation of holiday clubs. “How many clubs will continue to sell?” he said. “Or will they start something different to avoid the new legislation?”
Solomonides told the Cyprus Mail that so far Cyprus had “only a handful” of cases each year related to bogus holiday clubs, but the government wanted to be prepared, he said.
“That’s why we have the leaflets, to increase awareness. Prevention is better than cure.”
He said that the CPS had started working on the leaflets a year ago and they would be distributed throughout the summer season.
The six-page leaflet explains that not all holiday clubs are bogus but some of them are.
It says holiday clubs are essentially booking systems for which you pay a large joining fee to enable you to book holidays at prices generally no cheaper than on the internet or from travel agents.
“They try and entice people by promising a lifetime opportunity or dream holidays for life by using high-pressure selling techniques to lure people to lengthy presentations that can last for hours,” the leaflet says.
“These people do not turn thumbscrews. They are very manipulative and play mind games. In reality, you are just another victim who has fallen for their sales patter.”
It also says that even in the case of legitimate businesses, the problem is that these companies don’t deliver what they claim to offer, and pressure people into signing long-term contracts that are eventually worthless.
The ones that do provide some holidays usually operate by renting spare timeshare or hotel accommodation, which means they cannot offer anything special during high seasons, when most people want a holiday.
“In reality, consumers may spend thousands of euros on little more than access to a booking service such as website or phone number. With the addition of expensive flights, supplements and taxes, it could end up costing more than holidays booked in the normal way,” the leaflet warns.
It said some cases had been identified in Cyprus but that the problem was not as bad as in other countries.
The leaflet, which will be distributed at airports and in other tourist-related outlets, also advises people they have every right to leave such presentations, even if they don’t want to appear impolite.
People who think they are being approached by such scammers should look out for free scratch cards, promises of free or discounted holiday packages, free plane tickets, limited time offers, or holiday certificates.
The CPS conference continues today in Nicosia.
