It’s Friday, so time for another Letter from America with Irene Parker, but first a look today’s major news in Europe.
El Diario a prominent Spanish daily newspaper published the following article today (see link for full story).
The article reports on the current legal actions against Anfi and tells of the 1.35 million Euros they have had to repay to consumers, in the execution of around fifty judgements. It also goes on to say that there are over 395 live cases at court with a value of over 27 million Euros, with over 100 having had decisions in favour of the consumers. Some of these are firm decisions with the sentences yet to be executed, others are awaiting confirmation.
With even the Spanish press publishing articles such this, it does make the claim by Anfi that they have not lost or the Supreme Court has got it wrong rather flimsy!
In fact on Tuesday yet another sentence was announced by the Court of First Instance against Anfi, again the clients contract was declared null and void with the judge ordering Anfi to return over £20,000 plus legal interest
(if using google. Right click on the article for a translation to English)
The same article has also been published in Canarias7, one of the major Canary Islands Newspapers.
Now for this weeks Letter from America.
The 3 Rs or F of Timeshare Revisited (first published in three parts)
Timeshare Resolution, Relinquishment, Refund, Foreclosure
By Irene Parker
February 16, 2018
There are many who use and enjoy their timeshare, but rising maintenance fees, high interest rate loans and higher interest rate developer issued credit cards can spell financial disaster, especially when an individual or family is hit with an unexpected life crisis. Not one of the more than 300 Inside Timeshare readers who have contacted us realized the perpetual nature of the timeshare contract (in the US), or that their timeshare had little or no secondary market. It is not uncommon for a family to have spent $100,000 or more on a timeshare.
There is rarely a need to pay anyone, or any firm, money to get you out of your timeshare. Special circumstances, like being in the middle of buying a house, may result in a referral to one of the law firms we know and trust, if the timeshare company refuses to help the individual or family.
Our “How to File a Complaint” form explains a process that takes time, determination and effort, but when it works, it costs nothing. We say when, because we don’t win them all. No one does, not even lawyers. “We can guarantee you release!” boasts the exit timeshare ad. We have had reports of people paying scammers large sums of money for a guaranteed release, only to learn the guarantee came about because of foreclosure or non-payment.
Our complaint form: http://insidetimeshare.com/file-timeshare-complaint-revised/
The goal: Convert from angry, desperate, overwhelmed and confused into empowered. Timeshare Advocacy Group™ has 44 core advocates and 10 technical support advocates to help you. All of our Advocates are unpaid.
The First R: Relinquishment
Some timeshare companies offer voluntary surrender programs, but relinquishments are not guaranteed and there cannot be an outstanding loan or delinquent maintenance fees. It is difficult to determine how many surrenders requests are granted, compared to the number of surrenders requested.
There is nothing wrong with deeding back a timeshare if you have used and enjoyed the timeshare for several years. However, if you find out just days or weeks after purchase that you bought a timeshare not matching what you were promised, walking away from even $5,000 doesn’t seem right.
Before relinquishing, check with a member of the Licensed Timeshare Resale Broker Association to find out if your timeshare can be listed with one of their 64 members. http://www.licensedtimeshareresalebrokers.org/
LTRBA members charge nothing up front, so they don’t waste your time or money by listing a timeshare that, in all likelihood, will never sell.
The Second R:
A refund is not easy to come by, but in cases of serious and obvious fraud; a refund can be achieved. Inside Timeshare has heard from so many members alleging fraud, we can sometimes guess the name of the repeat offender sales agent before we are told. The fact that some of the same agents are committing the same “fraud for profit” over a period of years is telling.
The complaint process begins with a petition to the resort. Anticipate a knee jerk “you signed a contract’ reaction. Next, begins the filing of regulatory and law enforcement agency complaints. This is where our advocates are ready to assist because just figuring out online forms can be daunting. Check our complaint form for the list of appropriate agencies to contact.
Eron Grant has become our resident ARDA Code of Ethics analyst. In all likelihood, timeshare members are not even aware they are collectively giving $5 million a year to ARDA ROC. ARDA stands for American Resort Development Association and ROC Resort Owners Coalition. The money comes through “voluntary” opt-in or opts-out donations. This $3 to $10 amount, which varies depending on the resort, appears on all maintenance fee invoices purchased in the U.S. if the developer is an ARDA member.
Despite our advocates and members forwarding a volume of complaints to ARDA, questioning ARDA’s Code of Ethics, there has been no response. Inside Timeshare has learned two of the worst alleged offenders each give $1 million a year to ARDA ROC, surely a disincentive to enforcement.
Here’s Eron’s article: Why Does ARDA Have a Code of Ethics?
The intent is that all member activities subject to the Code are designed to be honest and fair, and are conducted with integrity, dignity and propriety. http://www.arda.org/ethics/
Litigation can take years and often the amount of money at stake doesn’t justify the time and expense litigation requires. Some developers have a class action ban, forcing arbitration. There are many critics of arbitration, including 19 Attorneys General like Minnesota AG Lori Swanson, as reported by Chris Parker.
“The right to have your dispute resolved before a jury of your peers is as American as it gets; it’s a fundamental core American democratic principle,” says Minnesota Attorney General Lori Swanson. “To think that millions upon millions of consumers are forfeiting their fundamental right to have their day in court because of fine print in a contract….”
“Should a dispute arise, arbitration forces consumers out of the court system and into arbitration where appeals aren’t allowed, corporations historically wield a huge advantage—when not outright rigging the system—and details of misconduct are kept private,” writes Chris Parker, a reporter for City Pages
Timeshare buyers should check immediately after signing a contract to see if they can opt out of the arbitration clause. Probably only a lawyer would think to do so.
Timeshare developers know the industry is virtually unregulated and that they are protected by the oral representation clause. However, as we have stated in several previous articles, according to the FBI and attorneys we spoke with, it is not legal for a company to hide behind the fine print, providing sales agents the means to say anything they can come up with to sell points.
The most common deceit and bait and switch complaints
- The agent said I could sell my points.
- The agent said my points were an investment, so easily sold, at a profit.
- I can turn in points to pay maintenance fees but no such program exists
- The value of airline and other travel awards is zilch. A common complaint is being told you can use a credit card to offset or pay maintenance fees in their entirety, when a member would have to charge $200,000 to pay an annual $2,000 maintenance fee.
- The interest rate is 18%. They said I could get better financing but I can’t.
The Third R
It doesn’t happen very often, but there is the possibility the member just doesn’t know how to use the booking system. Blanket statements like “You can always book online cheaper than using timeshare points” are not accurate. My husband and I are Diamond owners. We have often booked two weeks in Sedona or Orlando for less than it would cost booking online using our points.
One amusing complaint was a buyer whose complaint was that they bought a trial program, but they were promised a lifetime membership. I explained, in the case of the timeshare company they bought into, the last thing they wanted was a lifetime membership. I encouraged them to become a Secret Shopper since they were not locked into perpetual maintenance fees.
This is the least pleasant outcome, but foreclosure is not the end of the world. Timeshare Advocacy Group™ has a foreclosure support group, with members offering each other tips on how to withstand the grueling up to 180 days or more of collection calls. Calls are relentless and members have reported many violations of debt collection consumer protection laws.
We’re working on a document for those who experience foreclosure to provide to credit rating agencies or lenders, detailing the patterns of complaints listed on Better Business Bureau reports, Attorneys General Settlements, and Assurances of Discontinuance and lawsuits. There will be a hit to your credit score of course, but if you feel you are a victim of fraudulent timeshare sales practices, provide the rating agencies or your lenders with the reason why you refused to pay off a timeshare loan or credit card. Lenders are human. Many will take this into consideration.
I asked timeshare attorney Mike Finn of the Finn Law Group some questions about the foreclosure process for an article we published previously. Mike’s answers are worth repeating. Some common questions:
Will the timeshare company try to ruin my credit for non- payment of maintenance fees loans or both?
Mike Finn: Generally no credit reporting on maintenance fees, yes they do on “mortgage” payments. Most timeshare property owner associations, which are separate non-profit entities, do not report non-payment of maintenance fees largely because they don’t maintain subscriber contracts with the credit reporting agencies. However, once referred to collection, those agencies do maintain subscriber relationships and that’s where the issue becomes relevant.
Can or will members be taken to court for non-payment of maintenance fees loans or both?
Mike: Can yes, will, maybe not so much
Do they place liens for non-payment of loans?
Mike: Yes in the sense that they do pursue foreclosures, yes for maintenance fees as well.
Do they place the lien just on the timeshare? In other words, does the lien apply just to the timeshare, or does the lien apply to a member’s primary residence as well?
Mike: The word ‘lien’ can be utilized in more than one way. In the timeshare world it typically means the security interest filed against the timeshare itself by virtue of nonpayment of maintenance fees. Only the timeshare interest itself is impacted by that kind of lien, not the owner’s property beyond the timeshare. A mortgage lien on the timeshare caused by non-payment of the initial purchase price can, under certain circumstances, become a judgment which could be satisfied by going after the defaulting party’s personal assets. This very rarely happens, but it has happened, so we can never, say never.
Is it advisable to just stop paying fees without the aid of an attorney?
Mike: It really does depend on your ability to endure collection calls, letters threats, and a foreclosure on your credit report is quite damning, it will make refinancing or new residential purchases an issue for about 5 years. Rarely will they sue for deficiency balance.
Remember, “I can’t afford it,” is not a valid reason to cancel a loan for a timeshare any more than it is a reason to be able to cancel your home mortgage loan. You can’t go to your home mortgage lender and ask them to cancel your home mortgage because, “I can’t afford it.”
Our Advocates, bringing experience and expertise from all walks of life, are here to evaluate and work together to help you put your timeshare in the rear view mirror, if that is your goal.
We seek to provide timeshare members a way to proactively address membership concerns; to advocate for timeshare reform; to obtain greater disclosure from the company; to advocate for a viable secondary market; and to educate prospective buyers.
Let’s keep working together to improve the industry.
That’s it for another week, remember if you require any information about any article published or any company that contacts you, Contact Inside Timeshare and we will get the information for you.
Have a great weekend and join us again next week.