Barclays told to compensate customers for Malta timeshare loans 

Bank will refund all interest, fees and charges for loans connected with Azure Resorts, which used famous footballers in its advertising

Barclays has been ordered to pay millions of pounds to holidaymakers over improperly sold timeshare loans after a toxic deal with a Malta resort linked to famous footballers. 

The bank has sent letters to borrowers saying it will refund all interest, fees and charges that customers paid since the start of their loan agreement with a timeshare operator whose investors are thought to include Gary Neville and Ryan Giggs. 

Barclays believed it had entered a contract with Azure Resorts to lend cash to customers who wanted to buy a timeshare. At the time, this firm was authorised by the UK financial regulator.

But the bank later discovered the loans were in fact being brokered by this firm's sister company Azure Services, which at the time was not authorised under UK law to act as a broker. 

Customers have previously said they were lured into the scheme with the offer of cheap holidays.

The resorts owned by Azure - which boasted large lagoon swimming pools and luxury spas - were marketed as being backed by Mr Giggs and Mr Neville, who was made Malta's tourism ambassador in the early 2000s. The pair are not accused of any wrongdoing. 

Charles Rebbeck, a 41-year-old commercial driver from East Sussex, told The Times last year that he was lured in after getting a cold call offering him a week's holiday with his family for just £150 at the Golden Sands resort part-owned by Azure Services.

After sitting through a five-hour sales pitch that included photos of Neville and Giggs, he agreed to pay £13,000 for a one-week timeshare for 25 years. 

Barclays is now bringing in an independent assessor to review each loan agreement.

If the assessor believes Barclays should not have offered finance, it will cancel the agreement and refund all payments with 8pc added interest. It will also remove any adverse entries at credit reference agencies linked to the loans. 

The Financial Times, which first reported the repayments, said the loans in question are worth about £48m and the interest will add around £26m more.

A spokesman said:  “Barclays Partner Finance is a responsible lender, committed to delivering good outcomes for its customers. We recognise that between April 2014 and April 2016 we did not provide the right level of service for some customers who bought time-share loans via Azure Services Ltd.

"We will be contacting all affected customers to explain what this means for them. We ended our relationship with Azure in 2018, and since then have put in place a number of new systems, processes and training to prevent this from happening again.”