Coral Matcham really can't afford to keep paying for the timeshare arrangement she and her late husband Wayne took up at Tasmania's Shearwater Country Club and Resort in 1996.

She's 66 years old, won't be staying there again, and hasn't in many years. 

But she paid her recent annual bill because the timeshare manager that took over management of the scheme in 2015, Queensland-based Classic Holidays, threatened to send debt collectors after her. 

Selling would be a very tall order given the lack of buyers for these types of timeshare deals, which can last up to 99 years with no exit option

"I was thinking, I don't want to pay it, I don't want to pay, but I'll have to because I don't want to go to debt collection," Coral told CHOICE in a recent interview. 

"So I've paid the $912. I ended up paying it because the last thing I want is having debt collectors contacting me."

Fees up 495% in 28 years

In 1992, the annual fee was $153.33, meaning it's gone up almost 495% over 28 years, which is well above the inflation rate. Even if the annual fee remained the same – which it wouldn't because of inflation – Coral, and then her daughter Cass, would be looking at $58,368 in fees over the remaining life of the scheme. The real figure, of course, could be much higher.

Coral and Cass – who's trying to get her mum out of the scheme – are convinced that Coral has no legal obligation to pay any Classic Holidays bill or stay with the timeshare scheme at all, but Classic Holidays is pushing back hard. 

According to the latest communication from Classic Holidays, Coral is committed to the 64 years remaining on the scheme, with no way out except to sell it. 

Selling would be a very tall order given the lack of buyers for these types of timeshare deals, which can last up to 99 years with no exit option. 

When Coral Matcham and her late husband Wayne originally signed on to the timeshare scheme, no contract or PDS was provided.

Unreliable information from Classic Holidays 

Classic Holidays has been inconsistent on the point of how many years remain on Coral's scheme. 

According to Cass, in July 2019 a Classic Holidays rep told the Matchams there were 67 years left on the scheme. In July 2020, a Classic Holidays rep told Coral there were 64 years left, but told her daughter Cass there were "around 60".

Coral and Wayne, who were both busy with their jobs over the decades, never found much value in the scheme to begin with. 

"We actually found we couldn't do a lot with it because we were limited to having to take a full week," Coral says. "We couldn't take a day here or a day there. And if we did just take, for example, three days, we forfeited the rest of that week." 

Trying to talk to Classic Holidays about it is like banging your head against a brick wall

Coral Matcham

In our previous Classic Holidays profile of John and Linda Booth, Classic Holidays is on record as saying the scheme becomes part of their estate and passes on to their children – whether they like or not. 

Like the Booth's children, Cass Matcham wants no part of it. 

"What am I going to do with this program? I want out," Coral says. "I don't want it, it doesn't suit me, I just don't want it. But trying to talk to Classic Holidays about it is like banging your head against a brick wall. They just don't want to know."

One of many aggrieved customers 

Coral is hardly the only timeshare member who's not happy with being in a timeshare scheme. 

According to a major ASIC report on the sector that came out in December 2019, "there was a high level of discontent overall. Many consumers felt that they were not getting the expected value from their membership and that they had experienced financial stress because of unexpected changes to membership fees, or in some cases, to their personal circumstances".

In the middle of this investigation, another Classic Holidays member, Margaret Rolla, got in touch with CHOICE with a story similar to the Matchams. 

Margaret took up a Classic Holidays timeshare scheme in 2008, but by 2013 the family finances could no longer handle the annual payments. 

"When I asked about cancelling the membership and if we'd be reimbursed any money from the $20,000 outlay, I was told I would have to give my membership away to someone else or try and sell it privately," Margaret told CHOICE. 

Our children and great grandchildren will be lumbered with this

Classic Holidays client Margaret Rolla 

Then, a Classic Holidays ownership advisor called and told Margaret "some things that were never told to us nor is it in the contract PDS," says Margaret. 

Among them was the lack of an exit option and that the membership becomes part of Margaret and her husband's estate when they die. In other words, as Margaret put it, "Our children and great grandchildren will be lumbered with this!"

Coral, Cass, Margaret and many other aggrieved timeshare members who have contacted CHOICE in recent years are caught up in what is known as a 'title-based timeshare scheme', in which members have access to a specific property for a given period of time each year. 

The other type of timeshare is a 'points-based scheme', a convoluted system in which members buy points and redeem them for holidays at specific resorts or holiday accommodations. 

CHOICE has demonstrated that timeshare schemes in general do not offer good value for money.

Australia's timeshare operators are mostly headquartered on the Gold Coast, where many properties are involved in schemes.

No contract to be found 

What Coral and Cass have been trying to tell Classic Holidays since July 2019 is that, like Margaret, they've never had a contract or PDS that says anything about 64 years remaining on the scheme (or 85 in Margaret's case) or not being able to leave it. 

Crucially, both Classic Holidays and Shearwater resort said they had no such documents either when Cass started trying to track them down in July 2019. 

Classic Holidays said Shearwater has them. Shearwater said Classic Holidays has them. 

"When I contacted Shearwater, they seemed very confused about why I'd contacted them," Cass says. "They said they'd handed all documentation and responsibility for that over to Classic Holidays as part of the management agreement."

Coral told Classic Holidays that she'd like to see the records so she could consider her options. 

"Basically, their response was, 'We don't have anything like that. We don't have a contract. You should have it'. But we were never given a contract." 

I don't understand how they can continue charging us for something we don't actually have an agreement for

Cass Matcham

"That's what I was so incredulous about," Cass told CHOICE. "They're still sending Mum bills. I know from past bills and past activities and from reading forums that they're very apt to charge people overdue fees if they don't pay and send the bills to debt collectors. But they can't tell me why I'm paying something. I don't understand how they can continue charging us for something we don't actually have an agreement for. It seems crazy." 

Classic Holidays initially told Coral they are only required to keep such documents for seven years. The implication seemed to be that they once had the documents, but didn't have them any longer, and that Coral should have her own copies in any case.  

But Coral, who's a career professional documents manager, says she's not one to lose track of paperwork. 

"I know what it's like to have to keep records for legislative reasons and for legal reasons and all other sorts of reasons," she says. "If I had that paperwork, trust me, I'd still have it. You have to keep a contract for at least seven years after the expiry or termination. If it's active you can't get rid of it." 

When Classic Holidays threatened to unleash the debt collectors on the grounds of breach of contract if she didn't pay her recent bill, Coral had a pointed question for the company: "What contract? What am I breaching?" 

"When I talked about possibly getting a lawyer involved, they basically said, 'Well, good luck, they're not going to get anywhere either'," Cass says. 

No title on file 

At one point during the months of back and forth, a Classic Holidays salesman told Coral and Cass that the 'title' to the timeshare was on file at the Tasmania titles office. 

Coral was floored by this assertion: "I said, 'What? Now that cannot possibly be right. Are you telling me I have a legal title lodged in my name at the titles office in Tasmania?'"

The Tasmania titles office told Coral there was no certificate of title under her name in the area of Shearwater resort and that, in any event, the document and certificate number that the Classic Holidays' rep had given her wasn't in the right format. 

"The land titles office does not issue the certificate in your attachment. I suggest you seek legal advice from a solicitor in relation to this matter," the office wrote back. 

Flimsy documentation at best 

What Classic Holidays did send Coral and Cass Matcham in June 2020 was a copy of the timeshare application, a copy of the unit certificate (both of which they already had) and financial statements showing Coral's annual payments.

None of the documents say anything about the length of the timeshare arrangement or the impossibility of leaving it. 

"The documents we received have multiple dates on them and we haven't been able to get clarification of what the dates mean and why they're different," Cass says. "It's kind of gone around in circles."

None of the documents say anything about the length of the timeshare arrangement or the impossibility of leaving it

Classic Holidays CEO, Ramy Filo, is also the president of the Australian Timeshare and Holiday Ownership Council (ATHOC), an industry body representing the interests of timeshare operators including Classic Holidays, Ultiqua, Accor Vacation Club, Marriott Vacation Club, Wyndham Destinations and others. 

The ATHOC code of practice says members "must establish and maintain proper administrative records and books of account, including written financial records which correctly record and explain its transactions". 

It also says ATHOC members must provide "the current PDS, or if there is no current PDS, the last PDS issued with respect to the scheme".

A legal expert who looked at the documents from Classic Holidays had serious concerns about the structure of the scheme.

Documents emerge at last

After CHOICE contacted Filo in early August this year, he said it had come to Classic Holidays' attention that Wayne and Coral Matcham had entered the Shearwater timeshare arrangement as a "private resale".

At that point, Classic Holidays sent through Shearwater "house rules" and "memorandum and articles of association" documents to Coral and Cass. 

The reason such disclosure documents weren't initially given to Coral, said Filo, is because "secondary sales are private transactions and did not to our knowledge have these requirements". 

But Coral says she bought her week at Shearwater directly from the resort, not from an existing member. It was not a private sale. 

Neither the 'prospectus' nor the 'trust deed' say Coral is locked into the timeshare deal for the next 64 years, or that she can't simply quit the scheme

And neither of these newly provided documents say anything about the duration of the deal or the lack of an exit option. 

After CHOICE interviewed Ramy Filo and Classic Holidays' chief operating officer Carole Smith in early August, other documents emerged and were sent to Coral and Cass. 

Neither the 'prospectus' nor the 'trust deed' they received say Coral is locked into the timeshare deal for the next 64 years, or that she can't simply quit the scheme. 

We ran the documentation by a legal expert, who had a number of serious concerns about the scheme's structure. 

Principal lawyer Andrew Simpson at Maurice Blackburn also found a number of issues with the primary legal documents, the unit trust and prospectus, especially on the points of the alleged 80-year duration of the scheme and the inability to simply walk away from it. 

"It's pretty unclear on those points," Simpson said. "The offer is an offer in perpetuity, but there's nothing in the prospectus that discusses any right to exit. There is nothing in the document that lends any detail to that question." 

And if Coral didn't see these documents until 24 years after taking up the timeshare, their legitimacy is further undermined.

Most people who would read these documents would have no idea what they were signing up to

Andrew Simpson, principal lawyer at Maurice Blackburn

"I would have thought you would have been given a copy of the deed up front. If you're going to sign up to something, you'd like to know what the terms are," Simpson said. 

For the average vacationer looking to sign up to a scheme that gives them a week in a holiday resort every year, a unit trust is a complex structure. It's the kind of legal setup normally used in business or commercial arrangements, Simpson says, and comes with many provisions and restrictions that a holiday-goer wouldn't be in a position to understand.  

Even if Coral had seen the documents from the outset, it probably wouldn't have helped, Simpson said. 

"Most people who would read these documents would have no idea what they were signing up to. These are complicated documents. The limiting nature of the transfer provisions means that future generations will also be stuck with the on-going liability of the timeshare interest, whether they want it or not."

The case for hardship relief

When Cass first got in touch with Classic Holidays she made the case that her mum should qualify for hardship relief on the grounds that she is over the pension age and has been affected by the COVID-19 crisis. 

Having a hardship relief program on offer is a proposed requirement under rules governed by the Australian Securities and Investments Commission (ASIC), which regulates the timeshare industry as a managed investment scheme. 

But Filo says the requirement wouldn't apply to 'legacy titles' like Coral's anyway. 

When we asked ASIC about this, the regulator confirmed that its proposal to introduce hardship relief as part of the update of regulatory guide 160 (which covers timeshare schemes) was still on track. 

There was no hardship relief on offer for Coral and Cass

ASIC "is proceeding with proposals to introduce hardship relief as part of the revision of regulatory guide 160," a spokesperson said. 

But whether it will apply to legacy titles remains unclear. 

"The application of this relief is not automatic, particularly in the case of legacy schemes, because each legacy scheme operates under an individual instrument of relief [exemption from regulations] which will need to be amended on a case by case basis in consultation with the individual operator," the ASIC spokesperson said, adding, "It is ASIC's intention to engage with the operators of legacy schemes about the proposed amendment of their instruments after the release of the revised regulatory guide 160."

At the bottom of Coral's most recent bill, a note says: "Interest accrues to overdue accounts including those on payment plans. Based on individual extenuating circumstances relative to COVID-19 exemptions may apply. Please contact the resort to discuss."

Coral's timeshare was taken out at Tasmania's Shearwater Country Club and Resort. Classic Holidays manages the scheme. (Image from Shearwater website.)

Yet there was no hardship relief on offer for Coral and Cass. 

"When I asked about financial hardship they responded that 'regrettably the resort does not operate a resale or relinquishment service and they are unable to take back your entitlement'," Cass says. 

"They didn't ask for any detail. They didn't say, 'Okay what sort of hardship are you experiencing and do you think it will be ongoing?' They explicitly and repeatedly said they don't have any hardship options."

Cass was told she could make her case to the Shearwater board of directors. 

When Cass followed up on the hardship question in a phone call, Classic Holidays said the only option was to move Coral to its Aspire program. After she paid the upfront cost of $7990, Classic Holidays said it would reimburse half the annual fees every year.

The total cost to Coral would still have been more than $10,000. 

I said I just want out right now and I'll transfer you $5000 as we're sitting here

Cass Matcham

In a last-ditch effort, Cass asked Classic holidays 'how about if I give you $5000 right now and we can call it a day?'

"I said I just want out right now and I'll transfer you the money as we're sitting here," Cass says. "It was a firm no, and the more I pushed on it, the more dismissive and somewhat aggressive they got.

"The alternative, they suggested to me, is that I just take it over now." 

Filo told CHOICE, "We have provided assistance in many areas to address timeshare ownership annual fees as a result of COVID-19," and that Classic Holidays has "introduced various assistance measures including deferred payment plans, extended entitlement periods, refunds for part of levies when resorts were closed, and reservation cancellations without penalties". 

But being let out of a scheme altogether is not one of the hardship options on the table, Filo confirmed. 

The Aspire hard sell 

Classic Holidays' Aspire program lets members move from a title-based to a point-based scheme if they agree to pay a significant upfront fee and then annual fees for a set number of years. 

In Coral's case, the offer started at $21,950 in July 2019, but Classic Holidays said it would drop that to $16,150 plus a 10-year membership in its points-based program for $889 a year.

In May 2020, Classic made another Aspire offer of $12,490, but discounted to $7990 if Coral traded in the four weeks owed to her, as well as paid $690 a year for six years. 

"I'm thinking this six-year deal, it's got to be better than 64," Coral says. "So they hooked me a little bit with that. Then I started thinking, I don't want that either. I don't get the benefit out of it now. I just want to walk away."

When Cass was going back and forth with Classic, Classic was emailing Coral, suggesting she should take the $7790 offer before it was withdrawn.  

"I said to them it will take a few days to think about and when I called them back the next week they did that whole sales tactic on me, saying 'It's already gone up, but let me see what we can do'," Cass says. 

I'm thinking this six-year deal, it's got to be better than 64. Then I started thinking, I don't want that either

Coral Matcham

Filo describes the Aspire option as a benevolent program designed to help members get out of long-term legacy schemes. He says the company has shifted about 300 members onto it in the past 12 months "on a triage basis".

For vulnerable members, Filo says, Classic Holidays waves the upfront fee. 

The other option on the table for Coral and Cass was to list their timeshare on the Timeshare Brokers website for three months for $19.95 a month, though the first month is free. 

If it doesn't sell in that time, Classic Holidays says Coral can then write a letter to the Shearwater board of directors, but it would need to be sent through [email protected]. 

It's worth noting that Timeshare Brokers is part of Classic Holidays. Filo says the company collects only the monthly listing fee, not any commissions on sales. 

Classic Holidays: We didn't make the scheme, we just manage it

As has been the case with previous Classic Holidays investigations, the timeshare operator stressed that it had nothing to do with setting up the scheme – it only manages it. 

And it says it doesn't have the authority to allow people to exit schemes. 

Although all billing and correspondence for Coral's Shearwater deal goes through Classic Holidays – and it's Classic Holidays that has repeatedly told Coral she can't exit the scheme – CEO Ramy Filo was quick to point out that Coral "is not a Classic Holidays member". 

This resort was very light on documentation and owners' information, and that's what we inherited

Classic Holidays chief operating officer Carole Smith

"Just to clarify, what Coral owns is an 80-year trust that was established in 1987," Classic Holidays' chief operating officer Carole Smith told CHOICE in a joint interview with Filo. 

"The other issue is that this resort [Shearwater] was very light on documentation and owners' information, and that's what we inherited," Smith says. "So we've got what we've got. We made that assumption because the actual trust was set up in 1987. It was 30 years ago. We inherited this five years ago." 

As for the inaccurate information given by the Classic Holidays salesman, Filo says Coral and Cass were asking the wrong person. "She was talking to the sales guy who doesn't understand the structure," Filo says. "It was just a mistake." 

Classic Holidays: 'You should have known about it' 

Filo made the point that the structure of the scheme – its duration and lack of exit option – would have been a subject of discussion at Shearwater's annual general meeting (AGM), questioning the Matchams' claim that these details were unknown to them. 

"They could have attended it anytime," Filo says. "We get a lot of turnout at the AGM of members. They can ask the directors questions. They talk to other members at every function. So I find it a bit hard to say nobody knew what they were into. They all talk and they all understand, and they love their resorts. I find it a bit wrong for somebody to say, today, 'We didn't know what we bought'."

Yet going to the Shearwater AGM wasn't a viable option for the Matchams, not least because it was a six-hour drive there and back.

 I find it a bit hard to say nobody knew what they were into

Classic Holidays CEO Ramy Filo

"In addition," she says, "Wayne ran his own small business, so getting any time away was always extremely problematic. I was working full time, and I had two young children who couldn't just be pulled out of school just so we could attend an AGM." 

Asked whether the latest documents sent to Coral and Cass clearly state that the scheme lasts 80 years, Smith said: "Yes. It's just that it's superseded by the articles of association as such, because it was amalgamated and it's managed as the one entity, but I do have the original unit trust." 

While it is dated 1987, the unit trust document says nothing about the scheme lasting 80 years. 

Asked why Classic Holidays has the authority to move members into its Aspire program but not the authority to let them leave the scheme altogether, Filo said, "What she's [Coral] doing is trading in her week to give her extra points. And the club, the new trust, owns the week at Shearwater. So the trust, designed by all members including her, now has a variable time, six years, 10 years and so on." 

Asked why the Aspire offer to Coral had come down so much since the initial July 2019 offer, Filo said, "I don't know what was discussed a year ago. It's changed. Everything changes." 

Coral says the assertion that she and her late husband were, or should have been, aware of the length of the scheme and the number of years left on it all along is demonstrably untrue. 

"The 60-ish numbers weren't ones we came up with," Coral says, referring to the varying number of years different people at Classic said were left on the scheme before settling on 64. 

"Neither was 80," Coral continued. "In fact, the 80 number only came up very recently after Cass started pushing for details. These numbers are ones that have now been thrown at us by Classic. Our position that this came as a surprise to us is completely true. And suggesting that we should have known those figures is ridiculous. We have had no documentation that supports that in any way, shape or form." 

Somebody has to own the title. You can't just forfeit an interest

Classic Holidays CEO Ramy Filo

Filo says the reason timeshares are so difficult to sell is because of the many timeshare exit scams, especially in the US. 

"The problem is the scams that have happened in America, and then that went through Europe," Filo says. "They prey on people." 

Filo says he agrees with CHOICE that the long-term schemes are an unfortunate arrangement for many members, and he says they're mostly a thing of the past. 

"I want to lobby ASIC," Filo says. "It's been three years in the making and I'm still waiting for regulatory guide 160 to come out.

"But even if the guide comes out tomorrow, Shearwater doesn't fall under it. It can't. It's title-based. Somebody has to own the title. You can't just forfeit an interest."

Where are the regulators? 

Cass complained first to the Australian Financial Complaints Authority (AFCA) and then to ASIC about her and her mum's predicament with Classic Holidays. 

AFCA said it can't help because Classic Holidays isn't a member of AFCA, and ASIC said it doesn't take individual complaints and directed them to AFCA. 

In an earlier investigation, however, CHOICE established that the responsible corporate entity for Classic Holidays is Classic Clubs, which is a member of AFCA. 

When we brought that to AFCA's attention in the earlier investigation, the agency said, "We have not been able to establish a legal relationship between Classic Clubs Limited and Classic Leisure that would allow us to consider complaints about products or services provided by Classic Leisure, given that we can only review cases involving our members." 

AFCA's response underlines how complicated these legacy timeshare setups can be, often leaving members in a regulatory void

AFCA also told us it "cannot consider a complaint against Cedar Lake Country Resort Limited (the subject of the earlier investigation) as it is not an AFCA member. Cedar Lake is not a member-run timesharing scheme, and was granted an ASIC exemption in 2001. This means it does not require a responsible entity, and is not required to be an AFCA member. Classic Leisure Pty Ltd has a management agreement for Cedar Lake".

Filo says Shearwater was granted a similar exemption, which is consistent with ASIC's response earlier about hardship relief. 

AFCA's response to our latest round of questions underlines how complicated these legacy timeshare setups can be, often leaving members in a regulatory void. 

An AFCA spokesperson told us it wasn't authorised to comment on a specific complaint. But he did confirm that Shearwater was a member of AFCA's predecessor, the Financial Ombudsman Service, but terminated its membership in May 2016. 

Following up on our earlier inquiry, AFCA said it does sometimes look at the legal relationships between related companies as part of its investigative approach, but only on a case-by-case basis. 

Whether or not Classic Clubs is legally responsible for the conduct of Classic Holidays as the manager of the Shearwater timeshare business in accordance with its ASIC licensing or corporate status is a question for ASIC, the AFCA spokesperson said.

'There's no way on God's green earth I can afford this' 

While Coral and Cass still aren't sure what any of Classic Holidays' explanations about "title-based ownership" actually mean, they are sure they'd like to part ways with Shearwater and Classic Holidays. 

Knowing how they've treated me and Mum ... you want to see it ended for good

Cass Matcham

"I am 66 years old," says Coral. "I will eventually be going on to a pension. I don't have superannuation. I lost my husband a couple of years ago and he'd been very, very ill with cancer, so whatever superannuation we had in those years leading up to that, we still had the mortgage, we had debt, we had living costs, we had hospital costs, so our super went. So when I stop working, or if I don't get any more work, then I'm on an old-age pension, and there's no way on God's green earth I can afford this on a pension." 

Cass is of the same mind. "Knowing how they've treated me and Mum during the course of this, you want to see it ended for good really," she says.

Stock images: Getty, unless otherwise stated.

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