Saturday, October 04, 2008

Circle broken by CIB petitions

Circle broken by CIB petitions

MANCHESTER, UK: Two Cheshire based companies that offered to help owners dispose of valueless timeshare products and also marketed a potentially worthless cash back scheme have been wound up in the High Court following an investigation by the Companies Investigation Branch (CIB) of the Insolvency Service.

CIB’s investigation found that Full Circle Management Ltd (which traded under the style of FC Management) targeted existing timeshare owners, who were invited to attend a presentation at which they were persuaded to pay the company a fee, in return for which they were promised they would be “rid of the [timeshare] problem once and for all”. Clients were also invited to participate in a cash back scheme through which they were offered the opportunity to earn back what they had lost on their timeshare investment. The cost of the combined options varied between £1,800 and £8,000 and the company signed up nearly 450 clients between September 2006 and March 2008, generating a turnover of more than £2m. However, the enquiry found that almost £1m of that sum had been diverted to a Gibraltan company under common ownership and could not be accounted for.

Furthermore, CIB’s investigation also established that the timeshare disposal contract was not legally binding on the timeshare management company who, in the event of default by Full Circle, would continue to look to the client for outstanding management fees; a fact that was not made known to the client by Full Circle. As at February 2008 the company had potential future annual management fees of more than £150,000 but less than £12,000 in its bank account.

Regarding the cash back scheme, the investigation established that Full Circle had received more than £280,000 as agents for the cash back providers (in addition to £95,000 in sales commission) but that, as at March 2008, had handed over only £107,000 of that sum. As a result, 51% of clients are prevented from pursuing their claim to cash back, having not received the required paperwork, whilst the potential of the scheme for the remaining clients cannot be assessed.

Recent information reveals that the company ceased to trade in July 2008, having been abandoned by its management team, who are ex-patriots living in Spain and who failed to co-operate fully with the investigation.

Full Circle’s sister company, FC Management Ltd, although dormant, was also wound up by the Court on the grounds that its name was identical to the trading style of Full Circle and could lead to confusion in the minds of the general public.

In winding the companies up the District Judge commented that Full Circle’s business model appears to be one that significantly disadvantages the public.

4 comments:

Anonymous said...

Dear Tony,
We have two nicley located timeshares. One in Kissimee and another in Williamsburg, Va. We want to
go back to our deeds and use the weeks we purchased.
Memorial Day in Florida and just before Labor Day weekend in VA. These are weeks we are available to vacation and are veriy unhappy with the exchange programs at Diamond previously Sunterra.

Anonymous said...

Thanks for the information on resale scams and the like.
We have tried to get a fair deal with some of the other companies in Florida. They want both of our timeshares and a fee of $4,000 in Williamsburg, Va. This was so unfair. Now I am ready to sell them because we are in a 10 to 20 yr. change in our lives. We have no grandchildren to take to Disney and no more interest in extensive travel out side the US due to terrorist and the like on our airlines. I have 2 Labradors and want to travel where animals are welcome with owners so they can be safe in any area of the country. Time shares are not animal friendly but allow smoking ??? What the difference would make if you allowed pets and more would allow.

Anonymous said...

Dear Tony
my mother has recently passed away and my father is house bound. I am trying to get advice about the practicalities of selling their points (15k). Diamond resorts intimate it may be difficult/not possible. Travel and leisure tell me it would be easy if I aim for 60p a share-I would welcome your input.
Thanks Jane

Tony Pearce said...

All of these comments are anonymous so I have no way of contacting you privately to try to help. I don't know a great deal about the US system so not sure whether points can be converted back to the original weeks.

Travel & Leisure are the only company authorised to resell DRI points at the moment in Europe. I do know that if one of the partners dies then DRI will accept the points back in those circumstances so that may be your easiest option.

The resale price of timeshare is very low purely because most of the owners are of an age when they either want to change their holiday requirements or they become unable to fly etc.