Life's a beach and then you lose
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Your support makes all the difference.THE CRASH last week of the holiday firm Elletson Holiday Services reveals the importance of putting your money into an authorised investment.
Elletson offered luxury holidays for life to its members, through the Lifetime Holiday Club, for an initial investment of pounds 10,000.
The club had more than 200 members who had invested more than pounds 2m in total.
The Department of Trade and Industry petitioned in the High Court for the company to be wound up and the official receiver called in.
A DTI spokesman said: 'The winding up followed receipt of information from the Securities and Investments Board that indicated it was not in the public interest for the company to continue to seek new business.
'It operated in conjunction with three companies registered in the Isle of Man. Doubts have arisen regarding the solvency and the viability of the scheme.'
The company offered holidays for life to different destinations around the world. Holidaymakers who wished to cancel their membership were told that provided they kept their money invested for more than two years they could get their money back, plus interest.
Unfortunately, the scheme, targeted at wealthy professionals, is not an authorised investment, so anyone who loses money will not be able to claim under the Investors' Compensation Scheme.
The other two similar established 'holidays for life' schemes are set up as single premium life bonds. This means that they are authorised investments, and so qualify under the compensation scheme.
The best-established scheme, which has been going successfully for more than 10 years, is the Holiday Property Bond run by the Villa Owners Club, which has more than pounds 100m from 16,700 holidaymakers invested. Minimum investment in the bond is pounds 2,000, which entitles the club member to points that give access to different holidays. The bond is invested in holiday property.
Investors can encash their investments after two years. The company offers no guarantees on return of capital - the amount that the bond holder gets back depends on the valuation of the properties.
Another similar scheme was offered by Premium Life. Two weeks ago, the company decided to stop offering the bond because it had attracted only about 100 investors since its launch four years ago. Existing investors will still be able to take holidays for life.
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