Timeshare company Ultiqa fined $900,000
Timeshare company Ultiqa Lifestyle Promotions has been ordered by the Federal Court to pay $900,000 following a ruling its advisers failed to act in consumers’ best interest.
Ultiqa, which was now in liquidation, was found guilty in May 2022 of its advisers giving advice that was not in consumers’ best interest or appropriate to their circumstances.
The upfront cost of joining the scheme was between $10,000 to $25,000, with ongoing annual fees of up to approximately $800.
The Court previously declared that between October 2017 and March 2019, Ultiqa failed to:
- Act efficiently, honestly and fairly;
- Provide relevant training to its authorised representatives;
- Monitor and supervise its authorised representatives appropriately; and
- Put in place documented policies and procedures to support the advice process.
Comments in the company's sales manual, quoted by Justice Downes in May, stated: "Do everything you can to amuse, interest, excite, relax, humour, flatter and if necessary, cajole your clients into staying."
Australian Securities and Investments Commission (ASIC) deputy chair, Karen Chester, said: “Ultiqa prioritised sales over appropriate advice and ultimately consumers’ best interests. The penalty against Ultiqa, the first against a timeshare provider, sends a further significant message to the timeshare industry. When sold alongside financial advice, it is both fundamental and legally required that the advice is in the consumers’ best interests.
“Timeshare schemes are complex financial products. They can be difficult to understand, to compare and to exit. They involve significant long term financial commitments of tens of thousands of dollars and are often loan-financed. Further, despite these significant costs, many could not even book holidays in their timeshares due to a lack of availability – meaning they got nothing for their money.”
Ultiqa ceased promoting the sale of interests in the Ultiqa Lifestyle Scheme on 28 January, 2020 and was placed into members' voluntary liquidation on 30 April, 2021.
The Scheme remained active and Ultiqa currently held an Australian financial services licence, which allowed affected consumers to access dispute resolution services through the Australian Financial Complaints Authority.
AUTHOR
Laura Dew
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