Already facing an ASIC review that could result in a regulatory separation from financial advisers, the timeshare industry is at loggerheads with former employees who assist people to negotiate an exit from timeshare contracts.

The Australian Financial Complaints Authority harbours its own concerns about the sector, but also questions whether this kind of consumer advocacy is in people’s best interests.

Mark Allison, who founded Exit Timeshares Now, says he “loves” timeshare arrangements. “Sold correctly to the right people and given full disclosure… it’s a brilliant product,” he says.

After selling timeshares for 35 years, Allison switched sides in 2018 and started charging “between $1500 and $5000” to help consumers extricate themselves from timeshare contracts, some of which span up to 99 years.

Allison says there is widespread lack of compliance in the timeshare industry.

Mark Allison

“Wherever I’ve worked the SOA is… completely generic,” he reveals, adding that the client is rarely given time to read it.

“They’re given [the statement of advice] at the beginning of the presentation, but they put it on the floor with the PDS and don’t read it,” he says. “Then after the presentation they’ve either bought or not bought.”

The fact that timeshare operators are in the same regulatory bracket as financial advisers, he says, “doesn’t make sense”. Consumers are “confused”, Allison reckons, and often conflate real financial advice with time share operators, who can use this to their advantage.

“[Timeshare operators] have to promote themselves as licensed advisers,” he says. “They say ‘This is my AFSL number, I’m governed under legislation, here’s your SOA…’.”

The SOAs in question can be remarkably sparse; an example seen by Professional Planner was a 2-page photocopy that bared little resemblance to the kind provided by genuine financial advisers.

The timeshare sector’s biggest fear, he says, is that ASIC will change the rules so clients have to subsequently opt-in, instead of having to actively calling to opt out after signing a contract.

“That would decimate the industry, without a doubt,” he says. “It’s an emotional sale. Nobody wakes up in the morning and says they want to buy a timeshare. There’s no resale market.”

AFCA, looking both ways

While the Australian Financial Complaints Authority has expressed concern over the timeshare sector, they are just as wary of representatives charging thousands of dollars for advocacy.