complaints

Call for Change in the US Timeshare Industry

Continuing with our US timeshare theme, Irene Parker today highlights some of the problems that beset consumers in the USA, she asks the question who do consumers go to when they have a problem or complaint?

In this article she tells the story of an elderly couple Kathie and Wes Olds, who are Diamond Platinum members, 50,000 points, the concerns they raise about the constant upgrades and how they were encouraged to open a Diamond ResortsBarclaycard”. By using this card for purchases they could earn a 1.5% cashback award that could be used towards maintenance fees. As they found out later, it was not going to be that easy.

Irene also explains how the Olds, were told they could use their points towards the $8,200 a year maintenance fees at $0.50 a point, only problem is to be eligible they would need to purchase more points. As Irene put it previously the Olds were now part of the “Continuous Money Making Machine”.

Enjoy the article, it is certainly an eye opener.

FTC = Federal Trade Commission

FBI = Federal Bureau of Investigation

Is the FTC or FBI an avenue for Change for Diamond and other Timeshare Owners Devastated by Little or no Secondary Market?

By Irene Parker

Inside Timeshare

December 5, 2016

burglar

Timeshare today has been reduced to high pressure, often hours long sales presentations demanding prospects sign a perpetual contract today or lose incentives and perks that will be gone forever. The contract language often includes, “Heirs, successor trustees and personal representatives bound by the contract obligations.” Throw in the limited or nonexistent secondary market and you have a recipe for disaster.

Inside Timeshare previously told the story of the Saldana family. The family has since surrendered their Diamond contracts due to rising maintenance fees. Remaining is a $33,000 home equity loan. With legal help, they quite possibly could have been released from a timeshare loan. Timeshare buyers are often encouraged to obtain a home equity loan due to timeshare’s 14% to 18% loan interest rate. This conveniently lets the timeshare developer off the hook when the owner can no longer afford the rising fees.

http://insidetimeshare.com/irene-parker-write-barclay-card-usa/

The Saldana family was encouraged to open a Diamond ResortsBarclaycard” to become a Diamond platinum member so that they could charge their maintenance fees. A Diamond “point” historically costs $2 to $4 a point, but if used for maintenance fees, is worth only a few pennies on the dollar. They declined.

The Olds Family did open a Barclaycard.

Kathie and Wes Olds, ages 68 and 69, acquired enough Diamond points to become Platinum members. Like the Saldana family, the maintenance fees have become cost prohibitive. The Olds family own 50,000 Diamond points.

At their last Diamond “Owner’s Update” at Mystic Dunes in Orlando, Wes and Kathie expressed their concern over rising maintenance fees. The sales agent said they were in luck. Apollo Global Management, the private equity firm that purchased Diamond in a $2.2 billion buyout this past September, said effective February 2017 owners could “cash in” their points for $.50 a point and use them to pay maintenance fees, but they would need to buy another 10,000 points for $37,000. The sales agent suggested a home equity loan. Remember, we said points historically have sold for $2 to $4 a point.

The sales agent said Apollo will be reducing the requirement from 75,000 to 60,000 points to be eligible for this “cash in” program. The family has invested approximately $100,000 in their Diamond resort vacation plan and the maintenance fees have grown to $8,200 a year. Wisely, the family decided this was not a good solution.

The family has other concerns over the use of the Barclaycard. They were told their credit card purchases would earn them 1.5% cash back which could be applied to their maintenance fees. They learned later this was easier said than done because they would have to petition Barclays bank in order to make this happen.

The Consumer Financial Protection Bureau is currently investigating Westgate timeshare. The CFPB has denied Westgate’s petition that the CFPB was overreaching their jurisdiction. Westgate claimed the CFPB should only investigate lending. Clearly, sales and marketing are part of the lending process. Sadly, it is expected the CFPB will be weakened or dismantled post US presidential election.

Ironically, the Florida Attorney General reviewer reviewing my complaint suggested I contact the FBI since their office pursues so few complaints. I had asked how to change bad business practices since change won’t happen lawsuit by lawsuit. Furthermore, few Attorney Generals in the US will pursue timeshare complaints. Exceptions have been New York AG Eric Schneiderman who halted sales at The Manhattan Club and the Tennessee AG lawsuit against Festiva.

green-question

Should we ask the FBI at IC3.gov to look into our complaints?

https://www.ic3.gov/default.aspx

I asked Mike Finn of the Finn Law Group what he thought. “I think between the FBI and the FTC you’d have better luck with the latter. The FBI essentially investigates criminal activity and I don’t think anyone is going to categorize timeshare fraud as criminal activity, at least not yet. The federal trade commission has a terrific statute on deceptive trade practices and advertising on its books. Most states have used a portion of the federal language in their own statutes so it does make deceptive practices a national issue. Unfortunately there is no private cause of action and although you can file an FTC complaint they do not have the resources to investigate them individually.”

Translation: From Wikipedia

Implied cause of action Circumstances when a court will determine that a law that creates rights also allows private parties to bring a lawsuit, even though no such remedy is explicitly provided for in the law.


“That is unfortunate because the feds would do a lot better job than the states that could be influenced by campaign contributions. The issue should be looked at nationally since so many of the developers operate in so many states and their practices are all the same,” Mr. Finn added. Mr. Finn does recommend people file complaints with the AG offices, CFPB, IC3 and the FTC because it takes volumes of complaints to change anything.  

Well, we’re back to public outcry and public awareness.

Why Did Mylan Hike EpiPen Prices 400%? Because They Could

http://www.forbes.com/sites/emilywillingham/2016/08/21/why-did-mylan-hike-epipen-prices-400-because-they-could/#45c18ac6477a

Mylan hiked prices because they could. A generic EpiPen appeared practically overnight when public outcry demanded action.

The same holds true for predatory timeshare lending. Predatory timeshare lending will continue unchecked until more voices demand regulatory change. Right now public awareness seems to be it. Retirement advocates like AARP American Association of Retired Persons have been strangely silent despite the fact that the industry targets the elderly.

On November 17, a jury awarded a Wyndham former sales agent $20 million for exposing this. More former timeshare agents are coming forward to share their experiences from Inside Timeshare and Inside Timeshare is here to help them.

Lawmakers passed laws in Florida that went into effect July 2015 making it more difficult for timeshare owners to be released from contracts.  

http://insidetimeshare.com/news-across-pond/

Regulators and lawmakers have been no help.

What’s an owner to do? We ask other owners to comment if they are in a similar situation.        

Links:  Television interview with Ralph Marble

http://insidetimeshare.com/illness-not-reason-surrender-timeshare/

Wyndham Whistleblower $20 jury award

http://insidetimeshare.com/whistleblowers-expose-timeshare-sales-tactics/

Roddy Boyd of Southern Investigative Reporting Foundation includes the history of Diamond’s price per point in his article Diamond Resorts and Its Perpetual Mortgage Machine.”

http://sirf-online.org/2016/03/07/27464/

 

Inside Timeshare would like to thank Irene for all her hard work and research into the complicated world of US timeshare, also many thanks to Mike Finn, of Finn Law Group for his views on the subject of who to direct any complaints you as consumers may have. This article also highlights the need for tighter control of the industry and how as consumers we need to come together to address this ongoing problem. It also shows that until the resorts / developers actually take notice of those who keep them in business, the problem is not going to go away.

If you have any comments or questions on this subject or any other article published on Inside Timeshare, use the comments section to contact us. If you have a story and would like to share this with others contact us and we can work together to publish it and let other owners know what is going on.


15 Comments

  • Brett Gardner

    December 6, 2016

    Being a past California realtor we had to take ethic courses to become a licence Realtor. These Timeshare Sales staff have to have a Real Estate licence to be able to sell timeshares. That being said we had to make sure all disclosures were given to the buyer and would than have them to sign all the disclosures forms to the contract. If a realtor decided to be shady and not disclose something about the property it could come back to bite them by having to pay court costs and undisclosed issues buyer was not told about. All Diamond a Timeshare sells staff have no ethics they well do anything to get a sell even knowing you are not being told all the facts needed to make a wise decision by being lied and scammed out of your money for ever and no way out of the timeshare.

    We are now Gold Members of Diamond Resorts International our maintainaince fees are now almost $ 5,400 a year. We have been lied by high pressured sells staff thumping there hands even on a bible in Branson Mo to force us to upgrade. We were lied to in Maui Hawaii at the Kaanapoli Beach Resort if you don’t exchange from the US Collection to the Hawaii Collection you will never be able to go back to Hawaii ever again because there are only a few timeshares in Hawaii unlike the US Collection. After arriving home we went to Pollo Towers. Got pressured into a update and was told we should of never of went into the Hawaai Collection due to high maintaince fees due to water erosion. I wrote a letter to Steven Clubeck and the General Manager in Hawaii and Pollo Towers which Pollo Towers sells staff said to get back into the US Collection would cost us another $28,000 in more points. We said no we were going to fight this matter ourselves. Steven Clubeck after receiving our letter contacted the Generals Managers and told them at no cost to us put us back into US Collection. Which they did.
    The sells staff beat and ware you down to the point and make you think you only have that moment to get those points for that lower price, even been told it will keep them from coming after our heirs in the future what ever It takes to bully you down to force you into buying more points. We are very unhappy with having this timeshare,

    Since we have 30,000 points we have to travel allot to be able to use them all or after 2 years you lose the points you have not used. Now my next problem is the ad on there TV at the resorts shows a restful vacation. Well let me tell you this is a lie to lure you in. As soon as you walk in the door you get pressured to go yo a update on new changes. This is a lie. We talked to the Quality Insurance staff and they said never go if you don’t want more points because it is a sells presentation and that there really is no updates. We were told by them to never do updates and they red flagged us to be left alone even though every time we go to one of Diamond Timeshares they continue to harass us! Sickening vicious cycle!
    Brett and Gayle Gardner

    Reply
  • Mike Kosor

    December 6, 2016

    Mike Finn, as usual, was right. The deception laws do exist on the Federal level and in most states (to include Nevada where I reside). But with no private cause, effecting action will not occur. Owners must get involved.

    Reply
  • Irene Parker

    December 6, 2016

    Brett Thank you for your comment. Diamond’s annual report points out the benefit of point foreclosures (VOI Vacation Ownership Interest) not being subject to real estate laws since VOIs are basically a membership like a country club. This makes it easier and faster to foreclose. Even though points are not real estate, loans canceled by attorneys on behalf of people who cannot afford the dramatically rising maintenance fees, are noted as foreclosed. Timeshare attorney Finn won a class action against Bluegreen making them label a foreclosure “settled for less” which is not as big a hit on your credit report. As the former DRI sales agent said in our Whistleblower article, agents have to be licensed and this makes people think they are regulated. Timeshare is basically an unregulated industry with the timeshare political lobby organizations like ARDA doing the regulating.

    Reply
  • Terry Hurley

    December 6, 2016

    We are silver level owners with Diamond Resorts International, we were pressured into buying about 6 years ago. The sales agent talked a good deal, so much so we bought in. Now with the Canadian Dollar so low with the USA dollar we have paid a huge amount of money fr what we got no the maintenance fees are huge as well when converted. I have tried to sell our points and frankly we cannot give them away. Sucks, this was to be our retirement living, after serving in the Canadian Military my husband and I thought we would have an awsome way to see the world and enjoy our lives. Well what a horrible reality check, when trying to book a stay at any Diamond Resort we get the run around about availability and we have on a few occasions gotten into a Resort to find a room that I wouldn’t put my dog. Even if u complain u r given the run around and the people u deal with at the desk are very rude. I hope when Mr, Colbeck received his 2.2 Billion I wonder if he knows he received that money off the backs of people like us who worked hard for our money and got sucked in my overbearing sales agents.

    Reply
  • Irene Parker

    December 6, 2016

    A friend sent this comment to my email: We need a plan to assist families to move the issue out of the bitching stage. May I suggest contacting the legislators with a simple email. In the short run contacting regulators is a waste of time. (Last week a timeshare insider told me contacting legislators was a waste of time.)

    I believe a significant email campaign to Nevada State legislators could have an effect. If nothing else it would help in telling a story people care and taking on legislative change is worth the effort.

    Reply
  • Lauren G

    December 7, 2016

    Thank you for the insightful read. I believe that everyone most protest the TimeShare industry to their senators, congress and other media outlets as well as their state AG.

    Regulatory as well as selling practices must be regulated. Apollo is just as bad as Diamond and no one will give you a straight answer. I would also suggest contacting your local news outlets and AARP to have them all write about this. Yes it takes some work but no one wants to be or should be cheated.

    The people who work at these places don’t ever tell you the truth. You should be able to sell your shares back to the company or sell them on the open market. If the company was sold for all this cash then as owners shouldn’t we be entitled to selling our shares for some of that cash?

    But someone said that all the Diamond / Apollo company has gained is real estate through your hard earned work and they are correct. : (

    Reply
    • Irene Parker

      December 8, 2016

      Lauren, We are beginning a campaign to contact politicians that are sympathetic to timeshare owners. A third Attorney General in the US has sued a timeshare company for blatantly deceptive practices. It takes volumes of complaints to move the needle. Thank you for your comment and your interest. If you would like to know more about which politician to write to you can contact Inside Timeshare. We are preparing a campaign for the upcoming US Elections.

      Reply
      • Irene Parker

        December 8, 2016

        I meant legislative session!

        Reply
      • Terry Hurley

        December 8, 2016

        We live in Newfoundland, Canada and have our timeshare with Diamond Resorts International USA collection. We bought from Mystic Dunes in Orlando, can u send me the information so we can write a letter and register our complaint.

        Reply
        • Irene Parker

          December 8, 2016

          Yes Terry I am working with someone who is asking our help to write to a Senator in Nevada who will be introducing legislation. The legislation introduced last year passed 100% in the senate but stalled in a house committee due to timeshare lobby efforts by ARDA. My email is ireneparker377@gmail.com so if you email I can add you to my timeshare reform group. The group includes several attorneys and journalists trying to help victims. It’s an uphill battle but fighting for justice has never been easy.

          Reply
          • Steve

            December 8, 2016

            We are Silver members in Diamond European. We were pressurised in 2014 into converting 8000 points to Fractional, at a (further) cost of £6k. This was done at Thurnham Hall. At the time I was suffering from heart disease and my wife had cancer. We were age 64 and 61 respectively. The fractional was due for sale in 2027, do the maths on the ages and prospects of getting there alive! We returned to Thurnham following our successful surgeries and treatments, just because we like the place. We again got conned into a ‘no sales update’, were promised no sales pitches. The woman concerned is very aggressive and ended up pitching a deal that would cost us £4K. At this point, in the process of throwing her out of our apartment, I noticed that her boss was standing in the doorway listening in. Now we are bailing out on medical grounds – I am banned from flying and we cannot use 90% of the resorts. Ok, fine, it all goes away when the evidence is accepted, with no fee, but what happens to our £6k investment in fractional ownership. I guess that’s the ‘fee’ in disguise. Any comments, my friends?

          • Irene Parker

            December 8, 2016

            Steve, If you are not already a member, join this almost 7000 member Facebook page even though you are surrendering. It is not Diamond sponsored and is not censored if you say something negative about Diamond, as long as it is backed up by fact. Put your comment out on the Facebook page and you will generate quite a thread, especially if you are a new member. You can mention I suggested you join.

            https://www.facebook.com/groups/diamondresortsmembers/

            Diamond is the only major timeshare company in the US (I don’t understand EU secondary market) with no secondary market. If we owned at Hilton, Hyatt, Wyndham, Marriott, Starwood or others, we could sell our points or weeks for something and recoup at least 10 to 15% of our initial investment. What about people like this person who is diagnosed right after purchase?

            http://insidetimeshare.com/illness-not-reason-surrender-timeshare/

            Thank you for your comments. Public outcry is the only tool as timeshare lobby organizations in the EU and the US seem to be on the side of the timeshare developer. I’m sure you can relate to Ralph Marble in the video above. Irene

  • Steve Lloyd

    December 11, 2016

    Thanks Irene, I am already a member of this great and very supportive group. With a pending application to relinquish, I need to be sure I don’t upset the apple cart. By now Charles should have sent you a copy of my letter to Diamond; I would welcome your comments, particularly on the fate of the £6k Fractional investment. I am already working out the percentage golf on that one! Best wishes, Steve

    Reply
    • Irene Parker

      December 12, 2016

      Steve, As a US Diamond owner, I am not familiar with fractional memberships. We don’t have those in America. Charles Thomas is very familiar with fractional ownership. I’ll ask him to respond. I messaged your earlier comment to John Adamson, the administrator of the DRI Facebook. You can message him from the Facebook page and ask him to review your letter too. He would be happy to offer his advice and review.

      Reply
  • Steve

    December 12, 2016

    Thank you so much, Irene, I have been in touch with Charles direct for some time and he has been extraordinarily helpful. Also, John Adamson has been a great help on the FB group. Fractional has quickly become a scourge here, especially among the older members. Some of us, at least, with all good intentions, don’t know if we will live until the proposed sale date. We will see what our pending medical exit letter produces. Ideally, since there is no procedure for selling fractional son the open market, I would like to see an offer to buy back pretty close to the investment total. We’ll see…

    Reply

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