How on earth were huge equity release loans granted to all these people to purchase fraudulent timeshares?

Homeowners fell victim to a long-running timeshare scam after UK lenders provided the finance to pay the fraudsters – exposing significant safeguarding deficiencies. 

Having been hooked by timeshare scammers while on holiday on the island of Mallorca in Spain, the fraud was successfully completed when the victims, having said they couldn’t afford the huge sums to complete the deal, were encouraged to borrow money against their homes. Most were introduced by the dishonest salespeople to financial advisor Neil Page, who first worked for JW Homes Financial Services, based in Oakwood, Wales, before later moving to nearby Homes Made Simple in Llantarnam, near Newport. 

Neil Page, who acted in the capacity of providing regulated advice, informed those introduced to him by the scammers that he had ‘invested’ in the scheme himself, which provided an extra degree of reassurance to those he was assisting. Through him, many loans were subsequently arranged – most on the basis of repayment, and some on the basis of lifetime mortgages. The amounts subsequently paid to the scammers – enabled by the provision of the loans in at least half of the cases discovered so far, often exceeded £100,000. 

What was the product being purchased? 

The product purported to be based on ‘real estate units’, at named holiday resorts, including the ones where the scammers operated and targeted their victims. It was in effect sold as a property investment, but was also said to have the advantages of providing a regular, significant income and ‘holidays for life’. 

In fact, the product, which was marketed under the name ‘Global Great Hotels’ (GGH), was a disguised, and unlawful timeshare scheme – what is known as a ‘floating weeks’ system, with no property assets attached to it whatsoever, and little or no other asset value, as there is virtually no resale market for such products. GGH itself had no assets of its own at all – it just registered people within a holiday club system owned by Spanish accommodation and timeshare company Onagrup. A previous similar scam, operated by the same people, was conducted using another business known as Restotel. 

The promised income was initially lower than promised and then dried up altogether when GGH ceased trading. This left the victims with no assets, no income, huge loans to pay off (either monthly, or at the time of their death or going into a care facility) – and demands from Onagrup for continuing annual timeshare membership fees for an unwanted timeshare holiday scheme. 

Safeguarding failures 

The victims believed they were purchasing a product that included a property asset, and an above-average investment return. In effect, they were persuaded it was a type of ‘buy to let’ or second holiday home, they could also rent out for income – and buy to let, and holiday home were some of the terms used within the loan applications. The mortgage advisor, Neil Page should certainly at the very least have been more diligent in vetting the purpose of the loans – even a simple check on the legitimacy of the contracts being entered into would have immediately revealed them to be deceptive and unlawful. His role should certainly be examined by the authorities. 

But it is also obvious that the lenders, which include Legal & General, Leeds Building Society, Principality Building Society, Santander, Liverpool & Victoria, and Halifax, do not have in place a checking system that would prevent their equity release loans from being used to pay scammers. Even the simplest of checks on the purpose of the loans, and the beneficiaries of the payments would almost certainly have stopped the scam in its tracks. Although the inclusion of a regulated financial advisor within the process probably exacerbated this, at least one loan was arranged directly between the victim and Leeds Building Society, which appears to demonstrate that safeguarding checks for equity release loans may be virtually non-existent. 

In addition, the victims had to receive the loan funds into their bank accounts, and then transfer them to the scammers. These transactions were so out of the ordinary for the victims, that it seems amazing and deeply regrettable that their banks didn’t ask for more details of what was taking place. 

Beyond this case – the potential for massive abuse and detriment 

What this case demonstrates is a huge vulnerability problem. The lenders, the financial advisor, and the banks processing the huge payments to the scammers all failed to make any significant checks. This must surely mean that fraudsters of many types can easily persuade their targets to access huge sums of money and pay the funds anywhere they choose. It could be used for any type of investment scam, within the growing ‘romance scam’ menace, or by a person that already has influence within the potential victim’s life. It could also be used by rogue traders to aid their massively overcharging for ‘home improvements’. 

Given that equity release loan potential is aimed at people who are often approaching or already in retirement, there is an added vulnerability factor, as many of the targets may be more susceptible to scams – that is certainly the case with some affected by the GGH scam. 

The GGH case was investigated and has been exposed by the fraud investigation and prevention business KwikChex. Currently, KwikChex is assisting dozens who have taken out equity release loans to pay for the fraudulent GGH product, and the loan value to date exceeds £5 million – but more victims are coming forward all the time, and it is believed the figures are many times this – probably hundreds of victims, possibly thousands, with the loans potentially exceeding £100 million. 

The details are being provided to the lenders and banks involved, to the FCA, and UK government. KwikChex is also contacting other safeguarding and appropriate organisations, including Citizens Advice and Age UK, with the aim of preventing further detriment and potentially uncovering similar cases. This is considered vital, as in the GGH case, in many instances, the close relatives / children of the victims were not aware that the scam had taken place, or that substantial money had been raised by effectively selling off a significant part of the family property. 

If you have been affected by the scam detailed above, have concerns about similar possible scams, or would like more information on this article, please contact by email chris.emmins@kwikchex.com