How and why Spanish timeshare resorts ignored the law for decades, including the 14-day cooling-off period

When Spain introduced consumer protection rules 25 years ago to curb high-pressure timeshare selling, many timeshare companies simply carried on as before—openly disregarding the new requirements.

Why did Spain introduce timeshare laws?

Timeshare is an emotional sale. People typically sign up only after being subjected to powerful sales techniques designed to push them into a decision while they’re relaxed and in a ‘holiday mood’.

Surrounded by palm trees, warm air and sea views, it’s easy to feel good—and to be in the ideal mindset to say ‘yes’ to a membership, even when it offers minimal financial benefit.

So many people agreed on the day and then regretted the decision later that Spain brought in legislation to protect consumers. Among other safeguards, the rules banned timeshare sales operations from taking any payment from prospects within 14 days of the presentation.

How did Spanish timeshare companies respond?

The reaction from pretty much every timeshare company in Spain was to continue selling exactly as they always had—and to ignore the new laws completely.

They kept taking as much money as possible on the day of the sale. They continued selling products that were now banned (such as points and floating weeks). Some resorts also carried on selling memberships in perpetuity, despite the new 50-year maximum term.

Many operators understood that complying would likely end their business model. An emotional sale only works if the prospect can be pushed into an on-the-spot financial commitment, making it harder to change their mind later.

Most people don’t approach a timeshare company of their own volition to buy a membership. They have to be enticed into attending a presentation (costing the timeshare company around £800 per presentation), and then an extremely sophisticated sales process is used to secure a sale.

To lock the deal in, prospects are persuaded to pay as much as possible on the day.

If, instead, the potential buyer had 14 days (as the law mandated) to reflect, they would be far more likely to return to a logical frame of mind and recognise that the product doesn’t make financial sense.

Timeshare companies knew that, if this happened at scale, sales would drop to zero almost overnight.

Why did resorts feel able to break the law for so long?

The explanation is twofold.

First, many senior sales executives would have expected to be long gone before enforcement caught up. Some were earning £20,000 to £30,000 a month even 25 years ago, so each extra month meant another substantial amount in the bank. The Spanish legal system is notoriously slow, and sales staff likely believed they had plenty of time to move on before serious consequences arrived.

Second, Spain’s bureaucracy and court system made it extremely difficult for victims to bring claims over illegal timeshare sales. Even a determined foreign owner who had been mis-sold would need to navigate a different language, learn the Spanish legal process, cope with long delays and rescheduled hearings, and persist through every delaying tactic and procedural obstruction that resort lawyers could deploy.

This ‘defensive wall’ of officialdom did protect timeshare companies for another 17 years.

Then, in 2016, the dam burst. Tove Grimsbo’s paradigm-shifting €40,000 court win over Anfi in Gran Canaria helped open the door for hundreds of thousands of other mis-sold customers at Spanish resorts to pursue compensation.

The aftermath

In the eight years since the Grimsbo victory, the European timeshare landscape has changed beyond recognition. Leading resorts have been forced to stop or sharply reduce sales operations. Former powerhouses such as Anfi, Club La Costa and Diamond Resorts have been brought to their knees. Giants that once generated huge revenues have been hit by a wave of compensation awards worth tens of millions of pounds.

Many resorts are in varying states of bankruptcy, administration or liquidation, and some have had to sell inventory to larger hospitality groups.

What’s certain is that there are no longer operations selling on anything like the same scale as in the ‘Wild West’ era of the 1980s and 1990s.

"It has reached the point where even members who were once happy with how their timeshare worked for them are losing confidence in their memberships," notes Greg Wilson, CEO of European Consumer Claims. "With so much debt to contend with and their main revenue streams cut, it's anybody's guess how long these resorts can continue to operate."

Were you sold illegally?

If you bought a timeshare membership in Europe, no longer have confidence in it, and want to understand your options, get in touch with our team at the Timeshare Advice Centre. We can help.