DGCCRF – No news is good news? Or is it…

The investigation by the DGCCRF (Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes) in France into the mis-selling of leaseback properties to around 200 purchasers is ongoing.


The scope of this investigation has not been confirmed. The timelines for its conclusion have never been given.

The CCPC (Competition and Consumer Protection Commission) here in Ireland, and it’s equivalent the CMA (Competition and Markets Authority) in the UK, have done their part in collating the consumer complaints. And, to be fair to them, they have done quite a bit of work in doing this.

The investigation follows the CPC framework for the investigation of cross-border consumer complaints. So far so good. But perhaps this process is designed for simpler consumer issues, for example buying a French toaster that  doesn’t toast evenly. It does not appear fit for purpose to investigate complex cross-border property transactions which have an element of lifestyle enjoyment and also financial investment. These leaseback Résidence de Tourisme purchases, purchased under the LMNP tax status,  require a commercial lease contract which can have hidden terms. The requirement for this type of contract is mandated by the French government tax and finance department.

Many would argue that a ponzi-type scheme was used by multiple developers / operators who guaranteed a rental return in this contract (for at least 9 years) which enabled them to sell the properties at an inflated price. One theory put forward by purchasers is that part of the purchase price was used by the developer / operators to pay the rent for a couple of years after which no rent was paid and the resort was put in receivership. Meanwhile, because of the hidden term in this lease contract, the purchaser could not get out of this kind of contract without potentially paying exorbitant ‘compensation’ to the developer / operator. And even if he did, he would have to pay TVA of 19% of the purchase price to the French tax / finance department.

The purchaser would never have purchased if he had known these things.

And yet the DGCCRF have known about these ‘poor’ practices and consumer traps for years…

But this ‘leaseback tax incentive’ does fund French tourist construction on a national scale. Follow the money. So, is protection of the ‘consumer’ really top of their agenda one wonders.

You might think that is the sort of thing the European Commission could be helpful about. And Directorate General Justice and Consumers appears to have just that role, if you were to read their mission.

But they’re not saying much.

Many owners ask the CCPC what is happening. The reply is the same, and has been the same for the last 18 months, that there is an investigation in progress and they can’t comment and they continue to support the DGCCRF:

…the CCPC has conducted and provided to DGCCRF, an assessment of complaints received in relation to French Leaseback properties. Matters raised by complainants on their completed complaint forms to the CCPC have been notified to DGCCRF.  As part of the DGCCRF investigation, copies of documentation containing marketing material/statements provided by estate agents and developers in relation to the properties purchased by Irish complainants, is being examined by the DGCCRF as part of its investigation.  At this time the primary role of the CCPC is to continue to support the DGCCRF investigation.  Under the European Consumer Protection-cooperation framework, the CCPC will continue to provide the assistance and information requested by DGCCRF in conducting its investigation of the issues experienced by Irish complainants when purchasing properties in France under the Residence de Tourisme Scheme.

The CCPC have committed to sharing news when they receive some:

An investigation is currently being conducted by the French regulator, the DGCCRF. It is therefore not appropriate for the CCPC to comment on matters that are under consideration at this time. When the DGCCRF provides us with information that can be relayed to those affected by this issue we will certainly do so.

This ‘investigation’ has been running for some time. The first formal complaints were passed by the CCPC to the French authorities in Nov 2017, almost 2 years ago.

One could reasonably be concerned about the focus the DGCCRF  have on this investigation and how ‘active’ it actually is.

Wish I’d bought a toaster….

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