Barclays Partner Finance timeshare refund update: £48m in refunds for mis-sold loans

Could this be the next PPI-style scandal?

On 14 June 2021, Timeshare Advice Centre reported a significant development for timeshare owners who say they were mis-sold Barclays Partner Finance loans.

Barclays Partner Finance (BPF) was a preferred finance provider for a Maltese timeshare resort where finance was improperly arranged for new owners. Barclays agreed to repay the interest element, plus an additional 8%, for loans granted between April 2014 and April 2016. Evidence of mis-selling has also been identified outside these dates and has been lodged with the FCA.

A solicitor working with our associated firm of lawyers, M1 Legal, challenged the position and argued that the capital should also be refunded, together with the 8% interest.

Update: Barclays Partner Finance refunds and remediation process

An appeal was submitted to the Upper Tribunal. However, before the hearing date, BPF agreed to refund the capital element on a voluntary basis and to remove any adverse entries on credit files relating to these loans. The remediation process began on 15 September 2021 as a pilot scheme (with refund letters sent to 200 consumers). Subject to this running smoothly, the next phase was scheduled to run from 14 October to 26 November 2021 for the remaining consumers. It was anticipated the process would be completed by 25 April 2022.

We understand the total refund is expected to be around £48 million, including writing off any remaining debts. The timeshare owners were represented by Adriana Stoyanova, a solicitor collaborating with M1 Legal, who raised the argument with the FCA several years ago. She notes that, when compared with early PPI decisions, this case appears to be following a similar path: initial rulings were made on claimable statutes, and later evidence showed mis-selling was far more widespread, opening up further opportunities to claim.

An internal check of clients with finance loans linked to their timeshare purchase found that 46% were arranged by unregulated brokers (i.e. the timeshare sales companies or their representatives).

This suggests other finance providers may also be liable, potentially leading to substantial payouts for owners at other resorts. Our estimated view is that there may be around £2 billion of mis-sold loans across the sector.

European Consumer Claims CEO Andrew Cooper said: “We urge all timeshare owners to find out about their rights as they could be entitled to huge sums in compensation. We have already assisted hundreds of owners with timeshare contracts which were found to be non-legally compliant and there are thousands more who could also be entitled to their money back.”

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