Ultiqa Lifestyle taken to court for selling timeshare schemes and alleged inappropriate financial advice

Ultiqa Lifestyle promotions sold timeshare schemes, a financial product involving fractional ownership of holiday accommodation and considered managed investment schemes (MISs). The federal court found that the company used misleading tactics and pressured consumers to sign contracts. In addition, Ultiqa has breached financial service laws by failing to provide financial advice that was in the best interest of consumers between October 2017 and March 2019. The regulator stated after the group advised them to invest in the Ultiqa Lifestyle Scheme despite the arrangement “not being appropriate to their circumstances”.

Ulitiqa Lifestyle timeshare schemes

Ultiqa Lifestyle promotions sell timeshare memberships for holiday accommodation for $23,000 upfront and $800 per year on average. ASIC deputy chair Karen Chester states that Ultiqa “cornered” consumers into investing in a timeshare scheme they could not afford. Despite paying tens of thousands of dollars in upfront costs and ongoing fees, many could not even book holidays in their timeshares due to lack of availability – meaning they got nothing for their money.

In handing down the finding, presiding Justice Downs said the group used “tactics to pressure the consumers to sign up at the presentation”, including preventing consumers from obtaining external advice and not giving the clients enough time to discuss and debate the offer. “The focus in giving the advice was on making a sale, and not on acting in the consumer’s interests,” she stated.

The judge also quoted a sales manual provided to Ultiqa sales consultants, which included the directive: “Once your client is on the sales deck, they come to the grim realisation that this is a sales environment and what is going through their mind is ‘How can we get out of here?’, and, if you give them the chance, they will. DO NOT GIVE THEM THE CHANCE! Do everything you can do to amuse, interest, excite, relax, humour, flatter and if necessary, cajole your clients into staying.”

Timeshare industry

ASIC has long had concerns about the timeshare sector. However, operators remain obliged to act in the client’s best interest. ASIC also published a report on the topic in December 2019, Timeshare; Consumers’ Experience.

Despite representing only 0.42 per cent of all MISs, one-fifth of all reported MIS complaints received by ASIC in FY19 involved timeshare schemes.

In May 2021, consumer group Choice sent a “super-complaint” on timeshare operators to ASIC. “The timeshare industry is causing deep harm to people through high-pressure sales tactics, poor financial advice and terrible value products that trap people for multiple decades,” said CHOICE’s Patrick Veyret. “Many people are stuck in unfair and expensive contracts running for decades and being told by the timeshare provider that they need to pass this burden on to their children.”

According to ASIC, there are approximately 15 registered timeshare schemes currently operating in Australia, with around 180,000 timeshare members in Australia.

The Ultiqa matter will return to court for a case management hearing on May 22, 2022.

Getting Legal Help for Bad Financial Advice

If you are a current or former investor in the Ultiqa Lifestyle Timeshare Scheme, we would like to hear from you. Contact us if you’re questioning the advice you received from a financial advisor and consider taking steps against them. We are committed to ensuring our clients receive the best possible advice and guidance on their situation, especially in financial matters and bank disputes. You can contact us online, call us at 1300 433 533 or email us at enquiry@fdlegal.com.au.