Ultiqa Lifestyle Promotions being sued by ASIC amid allegations of high fees and poor availability

A timeshare company is being sued over allegations customers paid $25,000 to join its investment scheme, only to be left unable to book getaways.

A GOLD Coast timeshare company is being sued over allegations customers paid up to $25,000 to join its holiday investment scheme, only to find a lack of availability when booking getaways.

Corporate regulator ASIC has commenced civil action against Ultiqa Lifestyle Promotions, currently under external administration, claiming its financial advisers did not take its clients’ circumstances into account when promoting the scheme.

During ASIC’s investigation, consumers reported that upfront costs of joining the timeshare scheme – based out of Varsity Lakes – were $10,000 to $25,000, with ongoing fees of up to $800 per year.

Some consumers complained to ASIC they had difficulty booking holidays due to lack of availability.

Ultiqa Shearwater Resort, Caloundra.

ASIC alleges some consumers had not sought advice regarding a timeshare scheme and some were not aware they were receiving financial advice when sold into Ultiqa’s Lifestyle Scheme.

It is Ultiqa’s third brush with ASIC, which fined an Ultiqa Lifestyle timeshare lender $135,000 in 2018, and the company was also ordered to pay $3m-plus in compensation to customers over irresponsible loans.

ASIC had in 2016 raised concerns with Ultiqa Lifestyle’s disclosure and sales practices in 2016.

Company records show Ultiqa Lifestyle Promotions has been under external administration since April.

The Bulletin has contacted liquidators at Bentleys for their response to the allegations.

South Africa-born Gold Coast resident Mark Henry, who is Ultiqa Group CEO, is among the directors, along with fellow South African Neville Beekman and New Zealander Christopher Wilson.

Ultiqa Group CEO Mark Henry. Photo: Steve Holland

The Bulletin has contacted Ultiqa for a response to ASIC’s claims.

Timeshare schemes are a type of managed investment, which commonly involve holiday accommodation in exchange for upfront costs and ongoing fees.

ASIC Deputy Chair Karen Chester said timeshare schemes were complex financial products.

“They can be difficult to understand and compare with other products, and involve long-term financial commitments,” she said.

“Consumer harm can and has resulted when consumers are not aware of the upfront costs, ongoing fees or the nature of their investment – like how easy (or not) it is to exit.

“This is the first time ASIC has taken action against a timeshare provider in relation to financial product advice practices.

“The timeshare industry is on notice to ensure existing compliance and advice practices comply at all times with the obligations on all financial advisers, especially for that advice to be in the consumers’ best interests.”

Varsity Lakes group ULTIQA Hotels and Resorts bought the rights to a 256-apartment tower from Melbourne developer Little Projects. Photo: Supplied

ASIC further alleges Ultiqa did not provide relevant training to its authorised representatives, monitor and supervise its authorised representatives appropriately, andhave documented policies and procedures in place to support the advice process.

ASIC also alleges Ultiqa’s conduct amounted to a breach of its obligations as an Australian financial services licensee to act efficiently, honestly and fairly.

ASIC is seeking declarations, pecuniary penalties and other orders to be made by the ourt.

Ultiqa ceased selling interests in the scheme on January 28, 2020 and was placed into members’ voluntary liquidation on April, 30 2021.

The scheme remains active, as does the balance of the Ultiqa Group entities. Ultiqa holds an AFS licence.

The date for the first case management hearing is yet to be scheduled by the court.

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Originally published as Ultiqa Lifestyle Promotions being sued by ASIC amid allegations of high fees and poor availability