Warning over holiday club scam tactics

Tourists are still being taken in by high-pressure sales tactics used by holiday clubs at European sun resorts - but now some are fighting back. Laura Slattery reports

An elderly couple on holiday in Tenerife is invited to a meeting where they are told they will be given tourist information about the island.

But the young representatives who approach them are actually sales people and the presentation turns out to be a five-hour pitch for a holiday club.

The elderly man in his 70s is encouraged to increase his credit card limit on the spot. The club rep assists him in calling the bank and over €6,000 is debited from the card. For the remainder of their holiday, they are left stranded with no money.

The story is typical of the high-pressure sales tactics that holiday clubs in the Mediterranean use to trick unsuspecting holidaymakers and bully suspecting ones into signing contracts offering luxury holidays at discount prices. When the new members return home, they discover the holidays they wanted to take are unavailable or overpriced and that their deposit of thousands of euro is non-refundable.

Most people believe they are too intelligent to fall for a scam such as a holiday club. But the "so-called companies" behind the clubs are clever too, says Susan Reilly, co-ordinator of the European Extra-Judicial Network (EEJ-Net), an organisation that helps consumers solve cross-border disputes.

"They use young Irish people as their reps and get them to approach people on the beach. The fact that they're Irish gains them a certain amount of trust and that's how they trap people," Susan says.

Holidaymakers are handed scratch cards that reveal they have won a bottle of champagne or a free holiday. They are told they must get in a taxi if they want to collect their prize.

This is where the lucky winners become the victims of a con job. "They are brought to the remotest place, such as the top of a mountain, so they can't actually get back without these people arranging a taxi for them," she explains.

Subjected to a presentation lasting several hours, the holidaymakers are separated from their partners and plied with alcohol, while sales reps make strictly verbal promises on the quality and availability of discounted holidays. "They just sign the contracts and give their credit card details basically because they are afraid," Susan says.

When the holidaymakers return home, they are hounded for balance payments. When they try to book the "free" holidays, they discover that they are only available in off-peak times, that the flights depart from the UK and that they cost more than typical travel agent package deals. At this point, the company goes AWOL.

The story of the elderly couple tricked in Tenerife has a happy ending. When they phoned their children back in Ireland asking for money, their offspring convinced them that the holiday club offer was dodgy. After some gentle persuasion by the European Consumer Centre (ECC) in Dublin, the couple's credit card provider refunded the money. But, as Mary Denise Fitzgerald, PR and marketing manager at the ECC stresses, credit card companies and banks are not obliged to return a cent.

There is no cooling-off period in holiday club contracts - the clubs originated as a way to circumvent the EU Timeshare Directive, which since 1994 has promised timeshare customers a 10-day period during which they can get a refund on their deposit. Holiday clubs are thus, by their nature, out to get consumers. Last year, consumers complaining to the ECC lost an average of €7,000 each on the schemes.

Complaints have gone down this year following an information campaign at Dublin and Cork airports, but the centre has still logged more than 30 queries so far. There has also been a huge surge in promotions companies advertising free holidays in direct mail shots and magazine inserts, says Ms Fitzgerald. Some 150 Irish people have lost around €260-€320 in hidden charges for supposedly free holidays promoted by a company called Worldwide Vacations.

EU legislation to curb aggressive and unfair marketing tactics is only at the proposal stage. However, new ways are emerging for consumers to fight back.

Four Irish victims of a Portuguese-based holiday club, the Club Praia da Oura, have won a total of more than €12,000 for breach of contract by using the EEJ-Net's alternative disputes resolution (ADR) service. A free Portuguese arbitration body won the consumers the compensation without the need for them to travel to Portugal or pay solicitors' fees.

Although there are no ADR bodies in Spain, where tourists are most frequently targeted, the Spanish police have made some prosecutions and ECC Dublin features a blacklist of companies under investigation on its website.

But for consumers who want to "save money, save time, save heartache", the blunt message from the ECC is to avoid all holiday clubs.

More information on holiday clubs and what to do if you have a cross-border consumer dispute is available from European Consumer Centre, O'Connell Street, Dublin 1, at 01 809 0600 or by visiting www.eccdublin.ie