A HIGH-PRESSURE sales operation which used a Chester hotel to market timeshares on narrowboats has been wound up following a Government investigation.
Charter International and its successor business, Charterline, is believed to have held sales presentations at the Chester West Holiday Inn between May and October 2004.
According to the Department of Trade and Industry (DTI), which conducted the investigation, Charter International sold more than 250 timeshares, ranging from £3,000-9,000, for a week each year on one of its six boats moored at Penton Hook Marina in Chertsey, Surrey.
In total, the company took a total of more than £1m in sales receipts.
Lindsay Hardern, from Beeston-based canal holiday company Chas Hardern, said she was not surprised by the news, and urged the public to be wary of operators offering deals that are too good to be true.
She said: 'There are more and more small companies trying to muscle in on the canal boat market.
'My advice would be for potential customers to stick to companies which are members of APCO, the Association of Pleasure Craft Operators.'
Customers for the timeshare scam were recruited through cold calling and street marketing surveys to sales presentations at hotels in Chester and Maidenhead, having been tempted by offers of free overnight stays, food and drink.
The DTI said staff at the presentations made a series of misleading promises to win over potential customers.
They claimed that the timeshares were also an investment opportunity, as owners could opt to rent out their allocated weeks over the 35-year lifetime of the timeshare holding. The company had no means of supporting this claim.
The sales staff inferred that timeshare holders would own a share of a specified boat, when in fact the timeshare was only available for a pool of boats.
The company also claimed that the boats would be replaced every five years, with contributions from yearly management fees allocated to a replacement fund.
DTI investigations revealed that no such provisions had been made.
The High Court in London heard that Charter International continued to trade while insolvent. The company fell into financial difficulty in July 2004, severely exceeding its overdraft limit.
However, sales staff continued to sign up new members, even though they no longer had any boats to offer.
The DTI uncovered unpaid debts owed to the Inland Revenue dating back over two years, as well as unpaid VAT bills. There were also unattributed cash withdrawals made from the Charter International bank accounts throughout its trading history.
Consumer minister Gerry Sutcliffe said: 'Regulations protecting consumers have largely driven the cowboys out of the UK timeshare market.
'But those looking for long-term travel deals may still come across unscrupulous sales tactics.
'Consumers should be very wary of incentives that lead them to high-pressure sales seminars. If in doubt, walk away.'