Barclays is to fully compensate almost 1,500 customers who were improperly sold timeshare loans by Azure in Malta worth a total of £48m.
In November 2020 the bank was told by the Financial Conduct Authority to repay interest charged on loans issued between April 2014 and April 2016 by the timeshare operator Azure Services (now in liquidation).
Barclays has now dropped its opposition to claims to repay the loans in full and have now agreed to reimburse the debt payments in full in addition to 8 per cent interest on the loans, rather than face a potentially damaging public tribunal.
This means they will refund about £30m of principal and interest to customers and write off the remaining debt on its balance sheet.
The bank will also remove any adverse entries on clients’ credit files related to the loans.
I have been fighting for many clients who have loans with Barclays for Azure timeshare products in Malta.
This is a huge win, the liquidators acting for Azure have already agreed to terminate many timeshare contacts but clients have had to continue to pay the bank for timeshares that simply do not exist.
I have always felt that these loans should be nullified completely.
Barclays Partner Finance had a partnership with Azure Resorts, underwriting financing agreements sold to holidaymakers in Malta.
Although Azure Resorts was licensed by the FCA to sell loans, the employees brokering the financing agreements were working for another company, Azure Services, which was not authorised by the FCA until April 25 2016 and so had been selling finance illegally.
The timeshare loans generally had high interest rates — in excess of 9 per cent.
I know of a 2014 loan for just over £20,000 with an interest rate of more than 9.5 per cent over 15 years — equating to total interest of £17,420, almost doubling the cost of the loan.
“We recognise that we did not provide the right level of service for some customers who bought timeshare loans,” Barclays said. “We will be contacting those impacted to apologise for what has happened, and to let them know how we will be putting this right.”
Many clients were sold a loan for a timeshare during a high-pressure sales presentation lasting many hours.
This decision sets an important precedent. I will continue to pursue compensation for many other customers sold timeshare loans by Barclays Partner Finance before the 2014-2016 period covered by the FCA.
I will also be looking at other timeshare resorts that operated BPF loans, or even loans from other finance companies.
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