Tens of thousands of British holiday timeshare owners could claim compensation as the High Court ruled that banks mis-sold a popular form of timeshare scheme.
A timeshare is a type of holiday home where lots of people use the property throughout the year, with each person paying fees such as maintenance, utilities and taxes.
Some timeshare options allowed you to part own the property - which would let you benefit from an eventual sale - this was known as a fractional timeshare scheme.
This typically involved expensive loans from banks working with timeshare firms.
Now the High Court has found that two lenders - Shawbrook and Barclays Partner Finance (formerly Clydesdale Financial Services) - breached the rules.
Consumers were sold these schemes on the basis they were investments as well as holiday destinations, the High Court said - which is against consumer protection laws and timeshare regulations.
The verdict means up to 25,000 fractional timeshare owners could be eligible for compensation, according to the claims management firm Praetorian Legal.
This group, representing around 1,000 claims, believes the potential payout from banks could total £500million overall.
According to Praetorian - the banks are set to pay £100million to those who have already launched complaints with the Financial Ombudsman Service (FOS).
Praetorian Legal says the average payout for their clients are around £20,000.
The Financial Ombudsman Service launched an investigation after receiving hundreds of complaints from customers who were sold fractional ownership schemes after 2010.
The findings of this investigation were then challenged by Barclays Partner Finance and Shawbrook who had worked with two timeshare sales companies.
The High Court ruled Shawbrook and Barclays Partner Finance breached consumer protection rules.
The crucial part of this claim was that the sales pitch made by the timeshare sellers was that the timeshares were "an investment".
The High Court also ruled that the contracts sold were attributed to the lenders under Consumer Credit Act and not the timeshare firms.
Gary Smith, executive director of claims firm Praetorian Legal urges thousands more victims who have not come forward so far to do so.
Mr Smith said: "Our understanding is that the banks in question are now making provisions in their account to remediate victims of this mis-selling, and establishing a claims mechanism that hopefully should see remediation happen with a minimum of fuss.
"Of vital importance now is that victims, who may not be aware of this recent ruling, come forward with their complaints, so that they can get remediated.
"We must not allow a 'lost generation' of hard-working families and elderly people to miss out on this chance to claim what is rightfully theirs."
Timeshare firms often collected loan applications from customers and passed them on to the banks for consideration.
This meant the ability to repay the debt was not properly assessed for all borrowers, leaving many trapped in expensive contracts and properties they couldn’t offload.
Some buyers were also saddled with growing debts as interest charges grew over the years but they couldn't exit the scheme.
A Barclays spokesperson said: “We welcome the Court’s decision, which we consider is a useful clarification of the relevant law and the way it should be applied to the unique circumstances of each complaint.”
Can you make a claim?
Mr Smith explained that anyone who took a bank loan to pay for a fractional ownership scheme in the last six years, or who took out a bank loan before 2016 but has made interest payments on it within the last six years, should be eligible for compensation.
To be eligible to claim, you must have made a finance payment towards your fractional ownership timeshare scheme at any point from January 1, 2018 onwards.
Your loan agreements can have been set up at any point from 2012 onwards, so long as you have made at least one repayment to the finance company after January 1, 2018 to date.
