ASIC alleges the advice was provided by financial advisers who were authorised representatives of Ultiqa from October 2017 to March 2019. Ultiqa promoted a timeshare scheme called the Ultiqa Lifestyle Scheme.

“ASIC’s case is that Ultiqa’s authorised representatives did not act in their clients’ best interests and did not give appropriate advice based on clients’ circumstances. ASIC claims that some consumers had not sought advice regarding a timeshare scheme and some were not aware they were receiving financial advice,” ASIC stated.

During the regulator’s investigation, consumers reported to ASIC that upfront costs of joining the timeshare scheme were approximately $10,000 to $25,000, with ongoing fees of up to $800 per year. Some consumers complained to ASIC that they had difficulty booking holidays due to lack of availability.

ASIC deputy chair Karen Chester said timeshare schemes are complex financial products. 

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

“Consumer harm can and has resulted when consumers are not aware of the up-front 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.”

ASIC further alleges that Ultiqa did not provide relevant training to its authorised representatives, monitor and supervise its authorised representatives appropriately, and have 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 court.

Ultiqa ceased selling interests in the scheme on 28 January 2020 and was placed into members’ voluntary liquidation on 30 April 2021. The scheme remains active, as does the balance of the Ultiqa Group entities. Ultiqa currently holds an AFS licence.

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