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ARDA-ROC

Friday’s Letter from America

Welcome to this week’s Letter from America, today Irene Parker gives her account on the workshop she attended at the Florida House of Representatives, regarding the Florida House Bill 435. As Sunday is St Patrick’s Day for all of our Irish friends, we couldn’t resist using the definition of Blarney in the opening graphic. After watching the recording of the Workshop, it seemed apt to use it, once you watch it for yourselves, you will understand why.

Before we go to Irene’s report some very brief news on the legal front in Spain.

In Tenerife, Silverpoint have been subject to a “cash” embargo, this is a result of a case brought by Canarian Legal Alliance for an execution of sentence on a recent case. Their senior lawyer Eva Gutierrez brought the order to the court to force Silverpoint to lodge the awarded amount with the court. This was done to ensure swift payment of the funds to the client, who will now receive 27,047.11€ plus legal fees and all legal interest.

CLA are now using this enforcement action as soon as the sentence is issued by the court. This stops any delaying tactics by the timeshare companies in making payment. It seems to be working very well.

It has also been published that the Fiscal Prosecutor in Gran Canaria, is looking into the accounts of Anfi Resorts and Anfi Sales, for the possible illegal movement of money to various accounts in order to delay the payment of funds to clients who have won cases against them.

For the Fiscal Prosecutor to be involved in this, shows that it is a serious matter, the full story can be read at the link below. Although it is in Spanish, use google and use the translate page feature.

https://m.eldiario.es/canariasahora/tribunales/Grupo_Anfi-timesharing-condenas-timesharing-insolvencia_punible_0_875612945.html?fbclid=IwAR0NGGZM0o8F8R8ZI3bD_Jsw5fS-HVuRSc0g1ed-lUJOS01GUZC48huO0_c

No for Irene’s report.

Florida House of Representatives

Business and Profession Workshop held in Tallahassee March 12

Florida House Bill 435

Does it restrict the rights of citizens to retain legal counsel?

By Irene Parker

March 15, 2019

Inside Timeshare has received many complaints about timeshare exit companies, in addition to reports from timeshare buyers describing unfair and deceptive timeshare sales practices. Critics of Florida HB 435 feel if passed this bill would restrict the ability of timeshare buyers to seek legal counsel.

Due to disclosures, we will not publish the link to the recording of the Florida HB 435 workshop held March 12, but the recording can be easily found at https://thefloridachannel.org/. Search the workshop by entering 3/12/19 Business and Professions Committee. The first 1 ½ hours is about beer and spirits distribution. The timeshare workshop can be found by fast-forwarding to the session’s last hour.

A panel composed of exit company attorneys and industry attorneys answered questions from Florida state representatives, who clearly seemed on top of the issues. Panel members included:

Jason Gamel, Sr. Vice President, Legal at Wyndham Vacation Resorts, Inc.

Shannon Zetrouer, Outside Counsel, Reed Hein and Associates

Tiffany Kimble, Director of Underwriting, First American Title’s Vacation Ownership Services Division

Wayne Halper, Esq., in-house counsel Wesley Financial Group, LLC

K.L. “Ken” McKelvey, CPA, ARDA ROC Chairman

Boyd McAdams, from the Florida Department of Business and Professional Regulation (DBPR), shed light on the number of consumer complaints filed in the last few years. Previously, our figures reported 2,360 timeshare complaints filed from April 2012 to April 2014. DBPR only acted on 110 of those complaints.

The approximate figures of timeshare related complaints, as I understood the figures, are:

2016        1200 complaints          600 reported misleading information

2017        1300 complaints          700 misleading information

2018        1300 complaints          700 misleading information  

2019        700 complaints            300 misleading information

Victoria Butler, from the Florida Attorney General’s Department of Consumer Protection, reported a figure of 1,500 to 1,600 complaints in recent years, with about 50% involving senior citizens. She said the majority of complaints were in regard to the initial sales presentation.

Ms. Butler stated that the Florida timeshare division engaged only 42 complaints, the majority concerning resale. This fits with our members reporting that all timeshare complaints they submitted, DBPR responded, “Verbal representations are difficult to prove.”   

Consumer attorneys matched the strength of industry attorneys. I would like to point out and dispute a few of the comments made by panel members Wyndham attorney Jason Gamel and ARDA ROC spokesperson Ken McKelvey.

Reid Hein’s legal counsel, Shannon Zetrouer, described how a buyer, typically held for hours in a high pressure timeshare sales presentation, signs a perpetual contract, often reporting that they were given misleading information.

Ms. Zetrouer argued that Florida HB 435 would infringe on a consumer’s right to seek other legal services, such as bankruptcy, foreclosure, or estate planning advice. She feels the bill, as currently worded, is overreaching in that it would affect timeshare buyers across the nation if they purchased in Florida.  “I specifically have concerns about House Bill 435. First, I think it will actually have a negative impact on consumers…It seems to infringe on the right of contracts and the right of companies to contract with consumers for relief that they [the consumers] are clearly seeking. Otherwise this industry wouldn’t exist,” said Zetrouer. “Simply put, if going to developers was an option for these consumers, then there would be no third party industry,” she added.

Mr. Gamel spoke of the 2012 Transfer Act that addressed disclosure, rescission, escrow and prohibited acts.

Ms. Kimball addressed the problems associated with fraudulent transfers.

Wayne Halper, Esq. described the criteria required to become a client of Wesley Financial Group, LLC. Wesley Financial receives 3,000 to 3,500 calls per week from timeshare buyers seeking relief from timeshare contracts. Of those initial contracts, only 150 to 200 per week are accepted as clients, because they must meet the criteria for fraud. Similar to the complaints Inside Timeshare receives, 100% of Wesley clients report being told the timeshare is an investment and will increase in value and 91% report the ability to rent will offset maintenance fees and provide an income stream in retirement.

Mr. Halper echoed Ms. Zetrouer’s comments, in that 99% of timeshares sold in America have a presence in Florida, and the bill as written would eliminate the right of timeshare members to seek the services of those offering exit services. Later in the discussion, Mr. Halper pointed out that being released from a timeshare contract can take up to three years. He felt it would be unfair to expect a provider not be allowed to charge for services performed until after proof of exit has been provided, proof not always provided.

ARDA ROC Chairman K. L. McKelvey said ARDA ROC represents 1.8 million Timeshare Owners. I have asked 742 families who have reached out to me, feeling they experienced unfair and deceptive sales practices, if they even knew what ARDA ROC stands for. Not one member could answer, yet collectively timeshare members give ARDA ROC approximately $5 million a year, often “opt-out” contributions.  

Mr. McKelvey described ARDA’s Responsible Exit Industry Coalition. For my timeshare, this is nothing more than media spin. I surveyed all 64 members of the Licensed Timeshare Resale Broker Association. Of the 64 members, 22 members responded, saying they would not accept a listing for my timeshare company, feeling restrictions the company places on points purchased on the secondary market excessive.

In response to a question asked by Representative Randy Fine (R), asking the percentage of Wyndham’s marketing costs; Mr. Gamel thought 30 to 40%.

Let’s compare this scenario to the primary housing market. The timeshare buyer sits across from a real estate agent in most states. There is an understandable assumption a buyer would think they have the same rights as a primary housing market buyer.

What would happen to the primary housing market if:

  • The Buyer paid 30 to 40% upfront in commissions,
  • The Buyer is demanded to buy the house the same day,
  • The Buyer learns licensed brokers won’t accept a listing to sell their home should they need to sell.

Committee member Representative Michael Gottlieb asked about “Adhesion” – meaning a timeshare contract cannot be changed, so why should someone need to talk to a lawyer before signing a contract, because you can’t change the contract anyway. The reason is because buyers are exhausted after an hours long high pressure sales session, signing a perpetual contract without being allowed adequate time to review copious and complicated documents. Not only attorneys, buyers are discouraged from seeking advice from a mom, dad, son or daughter. Sales agents are trained on how to defer this request, according to numerous current and former sales agents. Not being allowed 24 hours to think about a perpetual purchase, spending anywhere from $20,000 to $150,000 highlights the unfair in unfair and deceptive practices.

There have been many Attorneys General investigations and lawsuits concerning unfair and deceptive timeshare sales practices. Former Wyndham sales agent and whistleblower Trish Williams was awarded $20 million after reporting deceptive sales practices, and a recent Florida whistleblower lawsuit was filed November 2018 on behalf of ten former Wyndham sales agents and employees, working at Wyndham’s Florida Clearwater Beach Resort. Buyers need to beware of potential deceptive timeshare sales practices.

Buyers sign perpetual timeshare contracts accompanied by rising maintenance fees. Often existing members are sold additional points, promised maintenance fee relief programs that do not exist. The lack of a viable secondary market exacerbates the problem. Wyndham lists a viable secondary market as a risk to their stock market investors in their 10k reports.

Clearly, as Committee Chairwoman Heather Fitzenhagen stated, timeshare is a thorny issue. Let’s hope actual member voices can be heard in future sessions.   

On Tuesday, our reader data can easily address concerns expressed by Mr. McKelvey and Mr. Gamel:

1.     How rescission periods are easily dodged

2.     Why reading the contract does not always help

3.     Why the delay in reporting fraud

Related article: By Wyndham member and Marine Veteran Jim Sherwood, hardship appeal: http://insidetimeshare.com/http-insidetimeshare-com-p5114/


Self-help groups we feel are not industry influenced.

https://www.facebook.com/timeshareadvocategroup/

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

https://tug2.com/Home.aspx

https://everythingabouttimeshares.com/consider-exchange-options/

https://www.facebook.com/groups/180578055325962/

https://www.facebook.com/groups/465692163568779/

https://www.facebook.com/groups/1639958046252175/

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.

Contact Inside Timeshare to let your voice be heard.  

Inside Timeshare did have trouble locating the recording mentioned in paragraph two of Irene’s report, so Inside timeshare has provided a direct link to it in order to assist readers, the relevant part starts at approx 1:45:50

https://thefloridachannel.org/videos/3-12-19-house-business-and-professions-subcommittee/

Thank you Irene for your time in attending this workshop and writing this report, let us hope that the Florida Representatives see the need to protect consumers from the industry.

All that is left for us now is to wish you all a wonderful St Patrick’s day and to use one of their phrases

‘Bhi craic agus ceol againn’ : We had fun and music.

Join us next week for more news on the world of timeshare.

The Tuesday Slot: Arizona House Bill 2639

Welcome to The Tuesday Slot, this week Irene Parker continues our articles on the Arizona House Bill 2639, with a contribution from Fran D, a Registered Nurse.

ARDA Timeshare Lobbyist Don Isaacson Opposes Arizona House Bill 2639 – A Bill to Safeguard Timeshare Buyers

ARIZONA TIMESHARE BILL PASSES OUT OF HOUSE COMMITTEE

By Irene Parker and registered nurse, Fran D

March 5, 2019

Arizona has proposed a timeshare bill to protect timeshare buyers, but this bill is being contested by timeshare lobbyists. If Arizona HB2639 passes, it would help to protect consumers from fraud and deceptive sales practices by allowing a 14 day rescission period, among other safeguards. Fran, an Arizona resident, hopes that by sharing her timeshare experience that took place in Sedona, Arizona, and Maui, Hawaii, it will help lawmakers understand what buyers face when purchasing a product improperly presented.    

Timeshare members pay $5 million in annual “voluntary” donations to ARDA ROC. ARDA is the American Resort Development Association and ROC is Resort Owners’ Coalition. Out of 717 timeshare families who have reached out to Inside Timeshare, not one member could tell me what ARDA ROC stands for.

Timeshares have little to no secondary market. ARDA ROC has launched 8 Tips to Navigate the Resale Market. I contacted 22 licensed brokers. Not one would accept a listing for my timeshare points, feeling the restrictions placed on the use of secondary points too restrictive. For the members of my timeshare company, there is no resale market. http://www.ardaroc.org/timeshare-resales-resource-center.aspx

Many of the families affected by the lack of a secondary market for timeshares have been financially devastated. The majority of our readers have reported unfair and deceptive timeshare sales practices.

ARDA – Is this is our voice?

According to ARDA lobbyist Don Isaacson:

But the bottom line, said (ARDA lobbyist) Isaacson, is that the state should not step in to protect people who didn’t bother to understand the nature of the deal.

“You read the documents,” said Isaacson. “And unless there is fraud, you are bound to that particular purchase.”

Anyway, Isaacson argued that too much is being made of the issue. He said the 250 complaints a year to the Attorney General’s Office pale in comparison to the 600,000 timeshare units owned in Arizona.

















What Mr. Isaacson doesn’t understand, is that members are bound by the contract, despite fraud, with the vast majority of complaints alleging deception dismissed with “You signed a contract.” It’s not that buyers don’t understand the product. It’s that they understand the product as it is so often deceptively presented. Three major timeshare companies have received, respectively, over 2,000, 1,000 and 800 Better Business Bureau complaints over the last three years.

When buyers complain, they are typically told they signed a contract. How many people buy cars and houses without relying on reading every word of a contract, relying on the ethics of the real estate or automotive broker? It is only in timeshare that the oral representation clause is so abused and so overused. The industry itself calls deceptive practices “pitching heat,” a term unique to timeshare sales.

There are many ways to deceive, such as:

“This is a new program, so don’t say anything because I could get fired.”

Access to booking is not allowed until after the rescission period, so reading the contract would not help.

Wait until you make a few payments before refinancing – when banks don’t finance timeshares.

Fran’s complaint, recently sent to the Arizona and Hawaii Attorneys General, was dismissed by the company, responding that there were no misrepresentations. You be the judge. She will file complaints with the BBB, the FTC, the FBI at IC3.gov and the Securities and Exchange Commission.

Fran hopes ARDA lobbyist Don Isaacson reads her complaint. She will be reaching out to the following Arizona representatives involved with the bill:

Excerpts from the complaint Fran filed with the Arizona and Hawaii AG offices:

  • We purchased 8500 points in Sedona Arizona April 24, 2017.
  • Purchase price: $29,955.00
  • Down payment: $6,150.00
  • Amount financed $23,805.00

Sales agent Eric told us that we were buying points at a low rate, less than $ 4 per point, and that “at this price the point value can only go up.” We could sell some points at a profit and keep the original base points for travel. Ultimately getting our entire purchase for free, he called it a “401-V”.  He said he would lock the price for one year in case we decided to get more points later to utilize our “401-V”. We have since learned Diamond points are virtually worthless on resale.

The forms were long and extensive. We asked for time to review the documents but were pressured into signing “today” or not get the price per point offered.  After seven hours, my husband got upset and left. Eric followed us to our room insisting that we sign. We thought that Eric must be telling the truth, because if he wasn’t, there would be some sort of regulation. We incorrectly put our faith in Eric.     

We were referred to ARDA. ARDA’s advice leads members to scams, as licensed brokers will not even accept a listing for Diamond points, feeling the restrictions Diamond places on the use of secondary points excessive.

Virginia Beach, August 2017

The sales agents in Virginia were also very high pressure. They told us what we bought in Arizona was not worth it for us and that we had to purchase another 8500 points in order to keep the price of less than $4 per point.  The agent said that after that day the price would be higher. We did not buy. Being deceived into attending the presentation, under the guise that we were getting an education toward our membership was unfair and deceptive. The insistence that we had not purchased enough points made us so angry we did not buy.      

Maui, Hawaii, February 12, 2018

We purchased an additional 5,000 points and switched our US Collection points to the Hawaii Collection to total 13,500 Hawaii Collection points.

  • Purchase price $56,510.00
  • Down payment of $2,731
  • Amount financed $47,713.00

We met with sales agent Sequan R. This again ended up being a hard sell when we told him that we were expecting more of an educational meeting. He said he would give us all the education we need as he had left the company to give independent conferences to teach people how to maximize and exit a timeshare through “Timeshare Confidential Seminars,” but said Diamond hired him back to the sell side of the industry. We were again told “You can’t travel to where you want to go with what you have.” We have since learned that 8500 points were enough points to meet our needs.

Sequan told us we could use a program called Club Combinations at least six times a year to rent out to generate income that would offset the cost of our mortgage. Sequan also told us that we are lucky that the agent in AZ locked in the price because points have already gone up to $8.00 per point so we could already sell points and double our money.  Sequan said that many more high income level people are coming into this resort for the investment which is why the company started the rental program. He said at that income level people want to see a good return on their investment. I told Sequan I did not have time to spend on rentals because I work a lot of hours. Sequan said that the company would appoint someone to help us so we could start to offset our cost right away. I asked Sequan what if they don’t help us. He gave us his cell number and said to call him if that happens. We called Sequan but there was no person by that name.

Later we called and asked how to rent out our club combinations listings.  We were told there was no such program. There was no such thing as a rental program or selling of points for a profit.

Most buyers are on vacation without funds available for a large purchase, so end up signing off on high interest rate loans.  We went into debt to invest in Diamond’s timeshare points.

We had hoped for great vacations and the ability to sell some points for profit as had been explained.  Diamond’s motto “Stay Vacationed” for us means being held hostage. This vacation nightmare has become a major stress in our lives. Filing regulatory complaints is like having a part time job. I am a registered nurse and have spent many years working hard. My husband has worked hard for 40 years. We trusted the timeshare salespeople as we would trust any real estate broker, relying on the ethics of the real estate industry. It was a mistake.

Please do whatever you can to pass this bill and not allow ARDA, a paid lobbyist, to change your minds!

Thank you to Fran for sharing her timeshare experience. Inside Timeshare sent a draft of this article to ARDA. They did not respond. Of the 717 families who have reached out to us reporting unfair and deceptive timeshare sales practices, 99 are veterans and active duty service members. Several of the veterans are disabled, five Agent Orange disabled.

Proposed Florida HB 435, in which developers are worried about members deceived by timeshare exit companies, is supported by ARDA. A recent Florida whistleblower lawsuit was filed on behalf of ten former Wyndham sales agents. The actions of deceptive sales agents also harm honest timeshare sales agents.

IMPORTANT LINKS CONCERNING ARIZONA HOUSE BILL 2639

Press Release: http://insidetimeshare.com/fridays-letter-from-america-43/

To Track Arizona HB2639: Trackbill.com

https://trackbill.com/search/#/direction=desc&page=1&sort=relevancy&tracked&upcoming_hearings&type=bills&state=all&session&query=AZ%20-%20HB2639%20timeshare

Proposed HB Bill 2639

https://www.azleg.gov/legtext/54leg/1R/bills/HB2639P.pdf

Request to Speak for Arizona Residents

https://www.cebv.us/rts.html?fbclid=IwAR2784DcGDTFFg0hoQKi_WPJvhNaz7bvoPylIqRLxoBSStSdlH8Z3qGGD_o

The “Kill Bill” Guide – How it Works

https://drive.google.com/file/d/1Y4w31DQFznxoTDZDru86qzDoku3wuHaW/view

Coalition to Reform Timeshare









Preparing a narration for a governmental agency or a timeshare loss mitigation department is difficult for some due to age related issues or language barriers. We’re here at Inside Timeshare, along with our Supporters, to listen and educate. Contact us or one of these self-help groups we feel are not industry influenced if you experienced unfair and deceptive timeshare sales practices.  

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.

https://www.facebook.com/timeshareadvocategroup/

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

https://tug2.com/Home.aspx

https://everythingabouttimeshares.com/consider-exchange-options/

https://www.facebook.com/groups/180578055325962/

https://www.facebook.com/groups/465692163568779/

https://www.facebook.com/groups/1639958046252175/

Thank you Irene and Fran, it is now down to you the readers to do your bit and make your voices heard, this bill is to protect you the consumer, do not let the industry that has walked over you for years do it again.

In Spain, the law is on the side of the consumer, the industry is being taken to the cleaners after years of predatory selling, with many other European Countries with timeshare resorts looking to follow Spain’s lead. This is a result of the European Union issuing several directives on what timeshare is and how it should and should not be sold, which each state having to place this into their own laws, Spain was by far the strongest in its implementation. It took many years to get to this stage, but at least the consumer has the full protection of the law.

LET YOUR VOICE BE HEARD!

The Tuesday Slot

Welcome to another Tuesday Slot, this week we publish Part 2 of Manifesto, by another Industry Insider, with the introduction by Inside Timeshares very own Irene Parker.

At the end of last week we received some news from the courts in Gran Canaria, first was the news that the Enforcement / Embargo Team of Canarian Legal Alliance had once again secured a payout for one of their clients. Anfi Del Mar were ordered to deposit with the courts the sum of 49,226.57€ which is a few thousand more than they originally paid. They also received back their legal fees and legal interest along with the contract being declared null and void.

Then it was announced that the Courts of San Bartelomé de Tirajana had declared another 8 Anfi contracts null and void, with a total claim amount of over 400,000€. So some very happy clients indeed.

Now on with our Tuesday Slot.

Another Industry Insider Responds to Manifesto

Manifesto Part I:

Manifesto Part II upcoming: Our author hopes to, “draw public comment for a new Business Proposal to remedy and resolve the issues.”

Introduction by Irene Parker

February 19, 2019

As we learned in Manifesto Part I, considerable effort went into restricting the secondary market. One developer will not allow participation in the company’s voluntary deed-back program if the timeshare points were purchased on the secondary market. The goal is to get and keep the timeshare points in house employing any means possible.

As documented in Manifesto Part I, publicly traded timeshare companies list a viable secondary market as a risk to (their) investors. As baby boomers especially are learning about this timeshare hostage scenario, some families are financially devastated. They are left with no choice but to foreclose. Of the 702 families that have reached out to us, 98 are active duty service members or veterans, several disabled. The vast majority have high credit scores. Having to withstand the intimidation and humiliation of foreclosure can be overwhelming, especially for seniors having spent a lifetime paying bills on time.  

A Second Insider responds to Manifesto in today’s article. Insider analysis allows timeshare members and owners a glimpse into what goes on behind Wall Street’s timeshare scenes. Wall Street has made light of the well-orchestrated restricted secondary market. It’s just a loan loss provision number. I wish they could spend a day on the front lines listening to family after family explain how they were driven into timeshare insolvency, alleging unfair and deceptive sales practices, a few even to the point of bankruptcy. Most complain they bought additional points promised maintenance fee relief or the ability to sell points that was not forthcoming.

Following are comments from Industry Insider #2 to Manifesto, with responses from Industry Insider #1 (our Manifesto author) interspersed:

Commenter: I appreciate the well-formed Manifesto published last Tuesday, but would like to add some key points. A very important group of companies and individuals played a significant role in helping the timeshare ownership industry evolve/shift into the (points based) industry. The distinction being; now there are very few owners with “real property rights” as the majority of people own a beneficial interest in a club in the form of “crypto-currency” or points.

Anonymous responds; In Wall Street parlance; the Timeshare industry monetized utilizing a derivative – a very smart move. The term “luft” comes to mind. Luft is the German word for “air”. We’ve termed this derivative an RTU or “Termed Length” – Right to Use contract. Right to use timeshare contracts are the most popular forms of vacation ownership sold today. However, right to use (RTU) timeshare, and their agreements, operate differently from traditional deed ownership. Right to use timeshare is exactly as it sounds—you purchase the right to use the timeshare during the period on which you agreed. Unlike deeded timeshare contracts, you do not actually own any part of the property. Instead of a deed or title, you are bound to the timeshare by the terms of your contract. Right to Use contracts often takes the form of a club membership.

The right to use may be lost with the demise of the controlling company, because a right to use purchaser’s contract is usually only good with the current owner, and if that owner sells the property, the contract holder could be out of luck depending on the structure of the contract, and/or current laws in foreign venues. A more important question is; how many points can a (resort) issue to new buyers as 100% of the points are “derived” from the (resorts) land trust ownership of the original deeds? Secondary purchasers of RTU/Points have reported that many (resorts) strip owners’ privileges, access, exchanges and other perks of ownership to discourage and deter secondary market purchases.

This question begins to examine why Club /RTU owners often find that they cannot successfully book accommodations or exchanges unless they plan far in advance (24 months + prior). Because the points/RTU contracts are basically selling ‘air’, the resorts sell many multiples of Points /RTU’s than could ever be accommodated at any given time.  As we can see, this Club /Points/ RTU method allows the (Resorts) to sell an infinite number of points when compared to the prior physical simple-deeds.

Commenter: The industry, which upgrades up to 70% of its existing owner base, misleads owners into trading in their deeded intervals for some expansion use of a multi-site developer under the guise of convenience. This opportunity was something that was already afforded to them by the exchange companies.

Anonymous responds; Indeed, the industry quickly saw the future in selling air and swapped out owner’s valuable real estate property deeds for RTU contracts.

Commenter: The industry, already renting some 11M nights and adding 2+Billion in rental revenues (mostly to non-owners), could only be achieved by taking away the “sticks & bricks” of ownership.

Anonymous responds; Thus, creating extreme amounts of actual real inventory that could be rented out without benefitting RTU /Points Owners. Simultaneously, major resorts banned aggregations or collections of Points that could be used for business ventures; I.e. renting the points out.

Commenter: To accelerate this effort of transition, a modernization of laws needed to be created. This started in 2012 when ARDA drafted a sponsored a bill known as the “Timeshare Resale Accountability Act”. What few knew then was that the secondary market was collapsing right along with the primary market in the “Great Recession” – Timeshare developers began stripping various benefits of owners, selling into the secondary market, and imposed great “use” restrictions on those who acquired timeshares in the secondary market (like on eBay or through another resale channel).

As the economy began to improve and timeshare sales rebounded, a new subset of companies emerged. Those companies were called *Trade-in/Transfer groups and many of them worked on the same tables alongside of the teams of resort reps waiting to help those existing owners getting into an upgraded and competitive timeshare program.

Anonymous comments – These were the earliest aggregators working in contact with the developers who were filling their land trusts with the deeds as owners got part exchanged or traded into upgrading for RTUs.  

Commenter: What to do with these competitive intervals? Most of these companies ultimately failed as a result of a suppressive business model that was never shared with owners regarding how this created the nominal value factor which some even call negative value. Examples of companies: (Fireside Registry – Catalyst – SumDay Vacations – ALL ARDA members, assisting to provide inventory recovery/aggregator services for resort developers. Each acquired inventory for literally a penny to five cents a point, or sometimes at no cost.

Further, the writer suggests that attorneys are not effective and cannot make the resorts release their owners. This is simply untrue. There are thousands of owner/members who have successfully used attorneys to negotiate a release or litigate for return of monies paid and further, many multi-plaintiff or class actions in which resorts have paid multiple millions back to owners. These all were settled out of court and protected by settlement agreements that have confidentiality clauses and/or have been sealed by the courts, designed to protect developer secrets and activities of unclean hands, they simply do not want owners to know about.

Anonymous Comments – Attorneys that were early were certainly very effective.

The industry richly deserves its worst courtroom defeats. Many large defeats were on the basis of sales misrepresentation, contract misrepresentation, fraud in the inducement, fraudulent credit card/credit line applications and many other examples too numerous to mention.

Most effective examples are when the attorney/client relationship is limited to one timeshare case. Thousands of people have been willed unwanted timeshares as beneficiaries and literally 100% of these get redeemed with no issues and nominal fees. In 2008/09/10 owners who went bankrupt got redeemed without any issues, their personal credit was already damaged. The resorts could not use the leverage of personal negative credit reporting to force payment so “attorneys of merit” handled all of that work, therefore “yes” attorneys of merit are effective in dealing with unwanted timeshare assets.

Sadly, not all Attorneys are cut from the same cloth. Attorneys working on behalf of TPE’s represent a type of faux-Legal Mill. Rarely do attorneys working with TPE’s ever meet, counsel, or in fact speak to the customers. In fact, attorneys working in conjunction with TPE’s seem to be ineffective, due mostly to the overall felonious strategy.

Commenter: Finally, timeshare developers are finding it harder and harder to conduct business around the world *(UK, Spain, South Africa, Canada, others) except here in the United States where powerful lobbyists have used timeshare owners monies thru voluntary contributions to ARDA-ROC, Orange Lake Resort Alliance and other funds from developers to ensure passage of laws that protect the industry from angry consumers who unfairly have not been told the truth about their lifetime vacation ownership purchases.

Anonymous Comments – These lobbying attempts indubitably and with little doubt demonstrate how the industry desperately clings to its massive residual cash-cow after decades of selling a clearly worthless, illiquid luxury product to giddy, undefended, vacation minded, innocent members of the public.

Thank you to both our Insiders. We would appreciate input from the industry, but to my knowledge have refused to admit the secondary market is a problem and that there are thousands, if not millions who have wanted or want to be rid of their timeshare. There are some developers who have responded when we have sent an article for comment. We appreciate developers who will at least respond after members report being financially harmed by unfair and deceptive timeshare sales practices. We hope more dialogue ensues.

Thank you Irene for your introduction and for editing the article, we would also like to thank both our Industry Insiders for their contributions, no doubt we shall receive many more from them.

If you have any comments or questions on this or any article published, Inside Timeshare invites you to use our contact page, or join our Inside Timeshare Facebook Group, use the visit group box to log in, or use our contact page to send in your comments or questions.

If you have a timeshare issue that you would need help with or want to know what you can do, again contact Inside Timeshare, we are here to help and guide you.

The Tuesday Slot: Manifesto Part 1

After we published our interpretation of Florida HB 435, Inside Timeshare received the following Manifesto written by an Industry Insider. Part I examines the history of exit companies. Of note is the mention of the role private equity plays in today’s timeshare industry. Private equity firms played a major role in the junk bond debacle of the 80s and the subprime mortgage crisis of the 90s, so it is of no surprise to find private equity firms directing timeshare today. A junk bond or a subprime mortgage had some value for the borrower, but a timeshare contract, often adding up to $100,000 or more, is worth next to nothing should the borrower need to sell.

We look forward to Part II in which today’s author hopes to, “draw public comment for a new Business Proposal to remedy and resolve the issues.”

Florida HB 435 addresses timeshare exit services

https://www.flsenate.gov/Session/Bill/2019/435/BillText/__/PDF

MANIFESTO

Timeshare Exit Companies and the Future of Timeshare

WHAT DO THIRD PARTY TIMESHARE EXIT COMPANIES (“TPE”) TELL US ABOUT THE FUTURE OF THE TIMESHARE INDUSTRY?

Part 1.

By Anonymous.

Our Questions;

 

  • Are Third Party Exit (“TPE”) companies selling a product that is largely undeliverable?
  • If the product is undeliverable are all remaining TPE’s simply exhausted Ponzi schemes awaiting implosion and bankruptcy?
  • How many Customers in the last 12-48 months have paid thousands of dollars for services yet remain unresolved, un-exited, un-refunded, and are still on the hook for their timeshares?
  • How large is this Exodus?

 

In this manifesto we shall attempt to break down into layman’s terms the causes and effects on the Timeshare Industry at the hands of the so-called third-party timeshare exit companies or “TPE’s” and eventually in Part Two, draw public comment for a new business proposal to remedy and resolve some of the issues.

We shall also reminisce at some of the more notable examples of earlier ill-fated timeshare exit businesses, all of whom reveal the starkest of similarities. In doing so, we will also be commenting on the chest-beater from the Industry in the form of a Sept 17th 2018 public release. Sadly, we shall also be debating the unconventional elephant that still sits in the room.

  • Why is there such resistance to owners exiting a Timeshare?  
  • Why is there no organized, unionized, “brand supported” exit & secondary market offering that satisfies the disposal needs of owners who are aged, retired, unwanted beneficiaries of, no longer travel or are on Federal poverty levels?  

 “On Sept 17th 2108 the Timeshare industry, the American Resort Development Association (ARDA) and ARDA Resort Owners’ Coalition (ARDA-ROC), have united to stop the misconduct of those deceiving timeshare owners into paying for illusory timeshare exit services through fraudulent means”.

I applaud the Industry on the use of the word “illusory’ as defined as: based on illusion; not real.” In what appears to be a long overdue case of karma, the timeshare industry is altruistically defending its long suffering, desperate “exiting and cancelling” owners from paying for illusory exit & cancellation services.  

(We don’t know who is more naïve; the Resorts for expecting that no one can ever get out of a Timeshare, or the deluge of Owners who paid upfront to try to get out!)

We speculate that in the last 36 months a crescendo aggregating to millions of owners had the audacity to want to end their Timeshare experience and as a result many hired Lawyers and Advocates and spent tens of millions of dollars in an attempt to get rid of their timeshares. Most of these fees were paid upfront, and most were promised that fees were 100% refundable if the exit contract expires and one still owns one’s timeshare assuming the Lawyer or Advocate is actually still in business!

Customers are asked to pay $7500 or more ‘upfront’ to be represented or advocated. Most marketers claim that there are magical back passages into resorts that take back the timeshares quietly in a forbidden black market open to only the special few. Marketers support this notion by suggesting that if the resorts were to publicly announce that they take back timeshares there would be an immense exodus of cancellations. No present evidence supports this tall tale.  

The Timeshare Industry is familiar with the exiting, canceling or generally getting out of a timeshare scam. As we can see Timeshares are complex and very sticky to get rid of. The Industry continues putting TPE lawyers and advocates out of business and into bankruptcy, yet the Industry cannot find a solution to the real problem – an evident immense Exodus.

Nothing, other than Moses leaving Egypt could be compared to the TPE Companies assault on popular branded timeshare owners in 2015 – 2018. All the major brands had rolled out vacation club programs with all types of new generation upsells and exchanges. Publicly traded companies in the hotel, recreation, leisure and timeshare industries had begun curiously separating their timeshare divisions into new public companies. Yet at conventions, the Resort Owners, Lawyers and Administrators all reported that their biggest headaches were the Exit firms. Their disruptive activities caused added administration issues, defaults, millions in lost revenues, angry customers all dealing with these flimsy cancellation letters from dozens of Lawyers and hundreds of Advocates interrupting contractual obligations and communication with the customers. They all knew where this would end…owners were paying thousands upfront for services that weren’t going to happen. Owners were routinely signing and notarizing Powers of Attorney to exit companies like they were signing Christmas cards! This wasn’t a cottage industry any more. It was an epidemic that had to be eliminated.

Apollo Global Management, owner of privatized Diamond Resorts (who as Merchant Bankers were possibly the first well-known brand to recognize the sudden disparity in results and the probable cause), began aggressively suing TPE Lawyers & Advocate Company’s in 2015. Apollo has made it known that they are preparing to re-IPO Diamond Resorts

  • The cause; The Timeshare Developer/Owner HOA true concerns are the financial effect that an immense Exodus of Owners and the sudden loss of payment of residual annual fees would have on the bottom line.
  • The effect; The Timeshare Industry has adopted a widely “illiquid” stance based on the capture of customers annual fees. The Timeshare industry survives in a very large part from customers annual maintenance fees.

Where did this idea of how to bilk the Timeshare Industry come from?  

In 2004, Uri Fried, an Israeli businessman and so-called inventor of the Third-Party Exit (TPE) business sent millions of postcards to timeshare owners inviting them to get rid of their timeshares for an upfront fee. Uri had formed over 50 straw buyers LLCs and began transferring thousands of unwanted timeshares per month into his LLCs. For several years Uri’s activity went relatively unnoticed by developers and resorts. Along the way Uri sold timeshares on eBay for $1 thus cementing the perceived market value of second-hand timeshare at one-dollar. None of Uri’s LLC’s ever paid a cent in maintenance to any resorts. Uri ended up serving a couple of years for $1.9m tax evasion.

In 2017 Uri settled all misrepresentation charges with the State of Wisconsin for $132,000 and received a lifelong ban from ever handling timeshares again. None of Uri’s ill-gotten gains were ever recovered.

Uri Fried woke the Industry up to the vulnerability of the Viking Ship LLC exit scam. The Resorts & HOAs were so fragmented. Collectively, they had no clue what Uri was up to. Uri’s customers owned everything and anything. Uri knew he was never going to pay a penny in dues or maintenance, so he stuffed them all into his defaulting LLCs. If the Resorts grew suspicious of the LLC name(s) Uri would simply create new ones.

Eventually the resorts smartened up and unilaterally responded by refusing to honor or acknowledge transfers to certain suspicious names and eventually certain transfer companies. The Developers had falsely believed that some level of organic secondary market had been occurring. As the industry is so hugely fragmented the major developers were fooled for a while.

As we shall see, the Viking Ship LLC model grinds slowly to a halt when the resorts block or refuses customer re-registrations and transfers. However, the TPE’s marketing machines continue “in almost every case” to sell new Customers on getting rid of their timeshares, in order to continue to collect thousands in what surely become ill-gotten fees, thus becoming a Ponzi scheme; whereby new monies pay off older refunds.

After the failure of Uri Fried’s business, an alternative Viking ship business became strongly marketed; Attorneys claiming to ‘cancel’ a timeshare.

On behalf of Owners who retained the firm, Castle Law (and others similar) wrote to the HOA’s and Resorts and in some cases Lenders, a series of scalding, lawyerly stamped, heavily embossed, important looking letters accusing and maligning the Resorts with allegations of much malfeasance, misrepresentation and fraud in the inducement.  

Owners were claiming any or all of the following:

  • Told that this offer is good for today only.  
  • Told that timeshare is in hot demand
  • Told that timeshare is a great investment
  • Told that timeshare – like all real estate will appreciate over time.  
  • Told the timeshare presentation is only going to be 90 minutes.
  • Told the timeshare is in such demand it could always be RENTED for a profit.
  • Told that you are buying pre-construction and this timeshare can be SOLD for a profit after the next “phase.”  
  • Told that this week/resort is such a valuable week to all of the exchange companies that you can trade for “anytime, anywhere.”  
  • Told that this maintenance fee will not increase over time
  • Told you will be attending an “update” to discuss questions (also called a policy change, owners update, etc.… – later it was actually a sales presentation).  
  • Told that this is not timeshare but Vacation Ownership or Vacation Property.  
  • (You) were subjected to high pressure sales tactics or felt that you could not leave the presentation without purchasing timeshare.
  • The timeshare sales agents plied you with champagne (or other alcohol or drugs).
  • The timeshare sales agents assured you, you could cancel if we had second thoughts/buyer’s remorse.  

Attorneys and Advocates, armed with Limited Power of Attorney, filed cease and desists on behalf of owners. Attorneys were demanding that the Resort have no communication with the aggrieved customer (s). Simultaneously, customers were instructed not to communicate with their resort, and to forward any communication from the resort to the attorney or advocate.

It wasn’t long before far less scholarly ‘advocates’ caught on to the jolly wheeze and suddenly millions of timeshare data records were for sale and hundreds of thousands of robo dialed calls an hour were being made to every timeshare owner looking for people who wanted to get out of their timeshares.

Unbelievably, millions of owners wanted out.

In the words of ReedHein dba Timeshare Exit Team CEO & timeshare exit Advocate Brandon Reed;

The reality behind the recent litigation is that resorts are leaving millions of consumers with no other options. Timeshare Exit Team exists because the resorts have created a problem without providing a solution. We hear countless stories from customers who were unable to even give back their ownership. Others have found that their timeshare investment was actually worthless when  they tried to resell it. Owners must have a way to safely and legally end their ownership when it no longer fits their lifestyle. Until that happens, we want to make it clear that we will not be dissuaded from continuing to advocate for consumers.”

Reed Hein are the guys advertising on TV. Estimates show that ReedHein is now the largest timeshare cancellation firm in the USA. We wonder what ReedHein is doing differently from Uri Fried, The Macmillan’s, ACC and other notable predecessors.       

Ok, why isn’t there a secondary market for Timeshare?

The Timeshare Industry publicly abhors any notion of a secondary market almost as much as the Wicked Witch of the West abhors water.

Why? …It’s so simple.

Let’s say you buy a Westgate ‘second hand’ at 90% off current Westgate prices from eBay.

  1. Westgate gets no new dollars from that exchange, Westgate gets a new Customer, the perception of “secondary market” timeshare true value is realized,
  2. Westgate takes on the risk that you will or won’t pay its annual fee’s.

Unlike the auto business, the timeshare core product is the same in “both Primary & Secondary Markets,” the most glaring disparity is price.

All the frontloaded exorbitant sales commissions, fees, marketing expenses and popping champagne are in the primary market versus a vast global array of venue choices at huge discounts available in the Secondary Market.

Sadly, developers use punitive measures to hamper and deter secondary market purchases of Points based/Club, Right to Use contracts by restricting further points accumulation (s), restricting booking access or exchange, restricting access to deed back and contract back programs, voiding visiting guest rental certificates and other contractual privileges. Certain developers’ restrictions have been described as downright draconian!   

The Industry publicly states in countless SEC filings that a Secondary Market would cut deeply into the Industries profitability. We can see why they would be worried.

In SEC filings:

  • “…the resale market for VOI’s (vacation ownership interests) could adversely affect our business” (Bluegreen)
  • “the sale of vacation ownership interests in the secondary market could negatively impact our sales” (Wyndham)
  • “the sale of vacation ownership interests in the secondary market by existing owners could cause our sales revenues and profits to decline” (Starwood)

Source – EDGAR.

In loosely translated SEC language that means the entire industry agrees with the notion that a secondary market should not exist, and they will stamp on the windpipe of any attempt to conjure a secondary market.  

This cannibalistic, illusory industry has a bone through its nose! As the industry makes sweeping, ubiquitous, cannibalizing, business decisions we urge serious consideration to the real threat to the future bottom line. As the Industry has discovered, there is a serious flaw to timeshare. Having built these lavish, illusory, granulated palaces, one must continue to sell to new mug punters who are still naive enough to sit through a bruising several hours long presentation and then when sufficiently punch drunk, pick up a pen and sign complex contracts that one has never read nor had the opportunity to do so, nor to many if read would actually comprehend. This is the sales model of the Primary Timeshare market? Is this the best they’ve got?

Possibly that’s the reason behind the aforementioned public company players in timeshare creating new public companies for their Timeshare only assets. Maybe they also see the writing on the wall of this woeful sales channel and are protecting their other core assets from devaluation.

After all, how many mug-punters could there possibly be?   

In a 2017 Orlando Sentinel News story, Mr. & Mrs. Morrison stated they are horrified by what they did on their last vacation to a Wyndham Resort in Orlando. They paid $25,000 to buy a timeshare, after a four-hour sales pitch that wore down the couple’s resistance and skepticism. Now they’re being hounded by people promising to get them out of the contract — if they pay an up-front fee. They don’t want to pay out any more money and aren’t sure who to trust. “We can’t afford this,” said Morrison, 69, who lives near Ottawa, Ontario. She says Wyndham offered to put them in a program that will eventually allow them to sell their timeshare, but they aren’t sure how long it will take. “Why won’t someone help us and put a stop to this?” she said. Wyndham didn’t respond to questions about the Morrisons’ case.

As if the Industry abandoning its aged, non-using, beneficiary owned and generally unwanted/unaffordable owners wasn’t bad enough, the Industry thwarts every attempt to stop an immense Exodus creating a need for Lawyers, Advocates and evidently miscreants and swindlers.

If Timeshare is an investment in making memories in people’s lives then shouldn’t it know when it has outstayed its welcome?

This of course is all karmically comical as the Timeshare Industry has cut its teeth on brutally sharp practices of high-pressure selling techniques, flogging its wares in well documented grueling four or five hour long “90” minute information breakfasts.

The Industry is undeniably infamous for pitching heat. Sales offices manned with trained professionals are often well trained in manipulative sales techniques. These timeshare hit-men pitch to the giddy, all too often inebriated, vacation-minded unaware prospects. It has been alleged that commission driven sales people often misrepresent overly complex customers contracts, agreements, loan documents, mortgage addendums all of which are tragically packaged by Closers, TO’s (Take Overs), Hail Mary’s and Managers at a table somewhere in a Timeshare sales room. Their only compensation is the commission from a sale.

Can you hear the champagne popping corks now?

The Supreme Court of Tennessee disbarred attorney Judson Wheeler Phillips, founder of the Castle Law Group, on a myriad of charges relating to consumer fraud complaints. In the past few weeks, Castle Law Group has ceased business operations following federal lawsuits brought by developers against Castle Law Group and those acting in concert with the firm.

Wyndham’s pursuit of American Consumer Credit (“ACC”), ACC’s principal, Dana Micaleff and attorney, Michael Saracco, resulted in ACC filing bankruptcy on September 7, 2018. Attorney Michael Sarocco, stated that Canadian entrepreneur Micallef always had “good intentions”, however things fell apart when developers and resorts wouldn’t allow ACC’s clients to break their contracts.

Castle Law & Judson Phillips were among the pioneers of the timeshare law firm and the cancellation business. Castle law had dozens of tertiary businesses who were marketing Castle Law services. These marketing firms fed Castle Law with thousands of desperate owners who were willing to pay $7500 or more “upfront” to exit their contracts.

In order to understand the scale of timeshare in the USA, the Timeshare Industry does about a $9billion a year in gross revenue. About 9.4million ownerships exist. There are approximately 1600 resorts. Average maintenance is approximately $900 a year. The Industry aggregates approximately $8.5billion from maintenance annually.

A typical single resort’s simple deed math would look like this:

  •         Typical Timeshare Resort – Individual Condo Units Per Resort: 500 units
  •         Weeks for Sale Per Unit: 50 weeks 500 x 50 = 25,000 Weeks for Sale
  •         Average sales price per week: $ 25,000
  •         25,000 weeks’ x $25,000 = $ 625,000,000 developer receipts
  •         Plus 25,000 weeks x $900 maintenance p/a = $22,500,000 per year.

In a new improved version of Uri Fried’s Viking LLC scheme; David and Cindy Macmillan sent millions of solicitation postcards and letters to Timeshare owners enticing them to attend informational meetings that led to “exiting their timeshare with 100% money back guarantee.”

The MacMillans ran a bunch of Viking Ship LLCs and their own transfer company in a timeshare transfer operation that resort owners alleged was bilking the industry out of hundreds of millions of dollars over a period of about nine years.

In 2008, spurred on by a failing economy and the USA housing crisis, the MacMillans operated over 65 straw buyer LLCs claiming that in exchange for several thousand dollars upfront, owners could be released from any timeshare contract. The MacMillan’s prize-winning company based in Torrance, California held sales meetings for owners by the bus load. Hundreds would cram in waving their credit cards in readiness. The MacMillan’s charged $6000 or more and allegedly mishandled over 120,000 timeshare contracts before becoming the target of the Attorney General of California. RICO allegations from Plaintiff Wyndham Hotel & Resorts proved undefendable. The MacMillans were banned from the business. They didn’t pay a single cent to the resorts in maintenance. Most of MacMillan’s eager customers found they were still on the hook for their timeshares. David MacMillan filed bankruptcy in 2016. Once again millions of dollars in ill-gotten gains went unrecovered. In a karmic twist of fate, Macmillan’s own transfer agent transferred thousands of the Macmillan’s Viking LLCs timeshares back into the original owners’ names before leaving the scene of the crime and left the Macmillans to take the fall.          

By 2014 Timeshare Exit marketing companies had mushroomed up all over central and south Florida, Tennessee and Missouri. Most of the new crops were marketing firms owned and run by seasoned telemarketing recidivists or by ex-timeshare sales people, some of whom had access to valuable owner data. The marketers, mostly acting as advocates, fed a variety of attorneys and both shared in the customer fees.  

In call center parlance this new business represented a new ‘data’ vertical. Call centers that had previously run ‘data’ looking for mortgage consolidation or debt relief were suitably adaptable for Timeshare Exit marketing. The busted timeshare Resale/Rental telephone scams that had left many recently unemployed in south and central Florida simply redeployed themselves. Some sales people told sad stories of repenting for all the lies they had told while selling Timeshare.    

In Phillips’ case, the Tennessee Supreme Court disbarred Phillips after reviewing upwards of 18 client complaints, many of which made similar allegations of fraud, highlighting a pattern and practice of misconduct. In its ruling, the Tennessee Supreme Court found that Phillips “poses a threat of substantial harm to the public.” Central to the series of complaints were allegations that Phillips and his business partners misled and/or defrauded consumers by taking exorbitant fees from timeshare owners for purported timeshare exit or cancellation services based upon fraudulent and misleading representations.

The ACC case is based on various legal theories, some of which are founded in Federal law, known as the “Lanham Act of False Advertising”. The case remains pending against Micaleff, individually, and Saracco, individually, although an automatic stay has been issued relative to ACC in the U.S. District Court action as a result of the bankruptcy filing. That, however, has not deterred the prosecution of the case. As of today, there is a motion pending against Micaleff and Saracco to punish them for, among other things, failing to appear for a deposition.

The Industries press release further commented;

“The constant pressure that our member companies, owners and federal and state agencies are putting on disreputable timeshare exit companies has again produced a positive result for the consumer,” said Robert Clements, ARDA Vice President of Regulatory Affairs.

“We are committed to protecting our owners to ensure they aren’t taken advantage of,” said Michael Brown, President and CEO of Wyndham Destinations.”

Diamond Resorts implemented an aggressive litigation strategy in pursuit of third-party exit companies for their nefarious and unlawful conduct in an effort to protect the interest of their members who were promised outcomes that could not be legally accomplished.

The number of customers who “wish to exit” an owned, fully paid up timeshare is an immense Exodus. Far higher than was ever imagined or projected by the industry. The elephant in the room is that there is still no safe exit from unwanted timeshares and no robust market with which to capture and reposition the unwanted timeshares.

In light of the recently filed Florida House Bill 435, one must question the fates of the remaining exit and cancellation firms including; Resort Release LLC, The Newton Group & Reed Hein AKA Timeshare Exit Team amongst others.   

It is obvious by the recent advertising budgets expended on TV, Radio and all other assorted media, along with the number of employees and general expenses to run these TPE’s that there are probably millions of Owners who have already paid Fees to exit or dispose of a timeshare in the last 12-36 months that are as-yet unresolved and may begin actions suing for refunds. The Term of a TPE’s contract generally offered is 12-18 months. We are sure many contracts have now been extended far beyond their legal limits. All the previously named TPE’s and Law firms offered a 100% refund upon eventual nonperformance, assuming they were still in business.

By monitoring the largest TPEs on social media and by paying particular attention to present and past customers reviews, it is evident that satisfaction is extremely low and that refunds are aggressively being sought. How many hundreds of complaints like these does it take before another AG steps in or another exit company gets driven to bankruptcy by an aggrieved resort or the FTC?

Here’s what we know.

Exit firms can’t get rid of your timeshare unless the resort ‘wants them back.’ Most Timeshares are indeed worthless. All timeshares come with some form of annual cost. In light of 2018’s vacationing and travelling popular habits, the notion of paying an annual fee is not popular or appears economically attractive.  

It may well be true to say that all TPEs charge upfront fees for truly illusionary services because they now know within a moral certainty that their customers will get nothing for their money.

One would have imagined that Timeshare Developers, being an enterprising bunch, would have figured out how to ‘selectively take in’ enough exits & cancels to quell this Exodus problem. This sensible move would have made the TPEs redundant and quickly ended the third party exit business by allowing worthwhile and fitting exits for owners, for a small fee.  

This, however, further highlights the possible size of the immense Exodus problem.

Thank you to our new contributor, at some point he will reveal himself, but we look forward to Part Two of the Manifesto.

Remember if you are unsure about any company that has contacted you, or that you have found yourself on the internet or from an advert, then contact Inside Timeshare.

If you purchased your timeshare in Spain or upgraded after 5 January 1999 and would like to know if you have a valid and viable claim then Inside Timeshare can point you in the right direction.

 

The Tuesday Slot: Florida House Bill 435

Welcome to the Tuesday Slot, this week we have a look at proposed legislation in Florida describing stringent requirements on entities providing timeshare exit assistance, including law firms. Florida House Bill 435 was submitted by Representative Wyman Duggan, elected to the House of Representatives in 2018. Inside Timeshare here and abroad receives a daily diet of timeshare members describing how they experienced unfair and deceptive timeshare sales practices, and are then dismissed by the timeshare company with an over-reliance on the oral representation clause.There is an abundance of the Pot calling the Kettle black. The FL HB 435 Summary I would describe as “Gobbledygook”.

Definition of Gobbledygook

Language characterized by circumlocution and jargon, usu. hard to understand.

or

Unintelligible or nonsensical talk or language  

Having spent a large portion of our time chasing down fraudulent exit companies, we here in the UK would welcome more stringent laws governing exit companies, but we encourage lawmakers to consider listening to the timeshare member, in addition to taking orders from industry lobbyists and developers. For instance, how about allowing the timeshare buyer 24 hours to review a contract? If we want to talk about unfair practices, forcing a buyer to sign the same day after enduring a tag team of aggressive and sometimes dishonest agents, that have kept the buyer typically for four to eight hours, is unfair.

We will be publishing a number of articles about this bill due to its complexity and its apparent desire to maintain total control over the buyer without access to any outside help if the buyer has been defrauded.

Florida House Bill 435: Vacation and Timeshare Plans

GENERAL BILL by Duggan

(3)(Line 157)In the course of offering or providing timeshare exit assistance or relief services, a timeshare exit assistance or relief services provider may not:

b)(Line 163)Solicit, charge, receive, or attempt to collect or secure payment, directly or indirectly, for timeshare exit assistance or relief services before completing or performing all services contained in the written agreement for services.

Effective Date: 7/1/2019

Last Action: 1/30/2019 House – Referred to Business and Professions Subcommittee; Government Operations and Technology Appropriations Subcommittee; Commerce Committee

https://www.flsenate.gov/Session/Bill/2019/00435/?Tab=BillText

https://www.flsenate.gov/Session/Bill/2019/435/BillText/__/PDF

February 5, 2019

By Irene Parker

I’m not an expert in proposed legislation, but after studying the 22 page draft of Florida HB 435, it seems that if this Bill is enacted, it will leave the timeshare member at the mercy of their timeshare resort. Based on complaints from 676 timeshare members reporting unfair and deceptive timeshare sales practices, timeshare companies have not been owner orientated in terms of dealing with owners reporting unfair and deceptive timeshare sales practices. The majority of complaints have been dismissed with “You signed a contract” or “We are not responsible for what our sales agents say.” Many members have had disputes resolved, but only after repeated rebuttals and the filing of regulatory complaints.

I found the Florida HB 435 summary incomprehensible. The PDF file of the actual proposed bill is linked above. I have broken the summary down piecemeal, which helps a little.   

Vacation and Timeshare Plans;

Provides services included in timeshare exit assistance or relief services;

provides prohibitions for timeshare exit assistance or relief services provider;

requires certain disclosures in general & purchaser-specific commercial communications;

provides requirements for oral or audible communications;

requires written agreement to provide services;

provides requirements for written agreement;

provides requirements for when specific entities are providing relief;

prohibits person from providing assistance or support to timeshare exit assistance or relief services provider if person knows provider is violating law;

provides exemptions;

requires certain records be maintained for specific duration;

provides requirements for timeshare exit assistance or relief services providers;

provides criminal & civil penalties;

provides that purchaser or owners’ association may bring action for damages against resale service provider or timeshare exit assistance or relief services provider.

The timeshare lobby ARDA and the timeshare industry have yet to acknowledge unfair and deceptive sales practices exist on the front end of the timeshare sale, despite numerous Attorneys General investigations, BBB complaints, and lawsuits too numerous to mention. The internet is flooded with complaints.

Where are the lawmakers looking out for consumers who have been victimized by unscrupulous timeshare sales agents, managers and VPs? The amount of money lost to timeshare exit companies pales in comparison to the amount of money timeshare members say they lost because they believed a timeshare sales agent. This legislative action would be completely unnecessary if only the timeshare resorts were responsive to owners’ issues. Why would timeshare owners voluntarily fork over thousands of dollars to these third parties if their resort had properly dealt with their issues rather than rule the customer is always wrong because they signed a contract.  

Timeshare members and owners, who own resort interests at American Resort Development Association (ARDA) resorts, pay a ‘voluntary’ fee to support ARDA ROC, who purports to represent timeshare members. This Bill is a perfect example of owners paying to have their rights further impaired if this Bill is successful. While I understand timeshare exit scams are out of control, treating the symptoms without looking at the cause is illogical and irresponsible.

The Bill was submitted by Wyman Duggan, freshman House of Representatives, elected 2018, profiled on LobbyTools. Lobbytools? Contact Representative Duggan if you would like to voice your opinion.

District Address:

Suite 104

4114 Herschel Street

Jacksonville, FL   32210-2200

Phone: (904) 381-6011

 

Capitol Address:

402 South Monroe Street

1101 The Capitol

Tallahassee, FL   32399-1300

Phone: (850) 717-5015

Email: [email protected]

ARDA is a lobby organization and a Political Action Committee (PAC).  The ROC in ARDA ROC stands for Resort Owners Coalition. ARDA does lobby for members when an issue affects both the developer and the member. One example is a proposed $300 exchange fee the Virgin Islands wanted to impose a few years ago. However, when the issue at stake benefits the industry, timeshare members are short changed, with no voice in legislative changes. Name me one real timeshare member or owner involved with this legislation.

Howard Nusbaum, the president of ARDA, was recently quoted in a Consumer Affairs article claiming, “The vast majority of people are happy with their timeshare.” If so, why is there a sizeable timeshare exit industry? In the same article, Diane Burkhart explains how her parents were sold five timeshare contracts from the age of 85 to 88. Diane’s parents are #57 of a summary report of 70 Diamond Resorts Platinum members who have contacted Inside Timeshare describing how they were up-sold into insolvency. They say they purchased additional timeshare points promised maintenance fee relief that was not forthcoming or the ability to sell points, widely reported to be worthless. The maintenance fee in 2018 for 50,000 Diamond timeshare points was $8,631.  

The lack of a secondary market breeds the timeshare exit industry. I contacted 22 of the 60 plus members of the Licensed Timeshare Resale Broker Association (LTRBA) asking to list my Diamond points. LTRBA members charge nothing upfront to list a timeshare. They refused to even accept a listing. Desperate timeshare members waking up to the realization that there is little to no secondary market turn to exit companies. Approximately 200 of our readers, timeshare members, sent their complaint to ARDA ROC. ARDA ROC does not resolve disputes, but has a Code of Ethics. Members feel the code is being violated. At best has been an auto-reply with tips on how to sell a timeshare.

The only timeshare member to receive a real response to her complaint from ARDA ROC was Elaine Lim. If Elaine Lim forecloses on her timeshare loan it could jeopardize her job and her career as she has top security clearances. Her response from ARDA ROC was, “This has been resolved” even before the company contacted Elaine. The company response was basically, “You signed a contract.” http://insidetimeshare.com/fridays-letter-from-america-32/

When timeshare members receive their maintenance fee invoices, they are asked to make a $3 to $10 donation to ARDA ROC, When I questioned my $7 donation, prior to my becoming more involved with this industry, I was told ARDA ROC is a nonprofit that helps members. Timeshare members collectively give ARDA ROC approximately $5 million a year. I have yet to meet the timeshare member who can tell me what ARDA ROC even stands for.

Why doesn’t the legislature own up to unfair and deceptive timeshare sales practices? Why point the finger only at exit companies?

ALEC pictured above is not the name of a lobbyist. It is the name of another PAC, the American Legislative Exchange Council one Senator describes as a “Corporate Bill Mill.” The reporter in this YouTube describes how lobbyists sit across the table with legislators filling in the blanks on desired bills tailored to their wishes. https://www.youtube.com/watch?v=6MHYOB5uptc

How about a parallel timeshare Bill with the same wording to protect consumers from unfair and deceptive timeshare sales practices? Disgruntled timeshare members who have reached out to us are not financial deadbeats trying to weasel out of their contracts. They are medical doctors, lawyers, mortgage loan officers, professors, teachers, MBAs, PhDs, war heroes, law enforcement professionals, criminologists (one a PhD), a detective who worked economic crimes under cover, and a contract specialist, all alleging fraud, deception, and unfair timeshare sales practices. The perpetual timeshare contract with little to no secondary market is a recipe for financial disaster. Many families are financially devastated.   

Florida HB 435:

The Legislature finds that purchasers who are in

(109) default of their obligations to pay assessments, real property taxes, or other sums due, or to pay amounts due under a mortgage, lien, or encumbrance against their timeshare interests, or who may no longer desire to own their timeshare

interests, may be vulnerable to fraud, deception, and unfair practices with timeshare exit assistance or relief services providers.

122 to prohibit representations that tend to mislead; to prohibit or restrict unfair contract terms;

Our volunteers answer questions about regulatory filings when members complain of fraud, deception, and unfair timeshare sales practices. We are not focused on getting members out of their timeshare contacts, although members have had disputes resolved as a result of filing regulatory complaints.

Prior legislation, making it more difficult to be released from timeshare contracts, was passed in Florida in 2015. This drew sharp criticism from advocacy groups:

A bill making its way through the Florida Legislature that would loosen a cap on timeshare assessment fees and make it tougher for buyers to get out of contracts has drawn criticism from timeshare owners’ attorneys and advocates.

The lawmakers and the industry’s trade association, the American Resort Development Association, describes the legislation as a bill that modernizes state law. Gregory Crist, chairman and CEO of the National Timeshare Owners Association, sees it otherwise. “This is a developer-sponsored bill that strips away at consumer-protection mechanisms,”

Meanwhile, attorneys and timeshare owners have questioned a provision that reduces liability for timeshare developers if they make errors in contracts. Errors or omissions that are considered “non material” would not allow purchaser-cancellation rights after 10 days. Stargel said the legislation is meant to keep timeshare owners from getting out of their contracts by finding minor flaws in them. It is meant to cover only technicalities, she said, not major problems.

Last month, some members of a House civil justice subcommittee expressed concern that there is no clear definition of “nonmaterial.” That kind of murkiness will “lead to increased litigation,” said attorney Patrick Kennedy, who represents timeshare consumers

https://www.orlandosentinel.com/business/os-timeshare-bill-20150312-story.html

Other related articles:

http://www.timeshare-info.org/2015/04/mixed-reviews-from-industry-experts-florida-bill.html

http://insidethegate.com/gatehouse/2015/04/florida-usa-timeshare-news-april-18-2015/#sthash.41Peggzh.dpbs

http://www.orlandosentinel.com/opinion/os-florida-timeshare-tactics-scott-maxwell-20150411-column.html

Here are some Self-help groups we feel are not industry influenced. Get involved. Let your voice be heard. Too many families have been financially harmed by their decision to buy a timeshare, a product advertised to reduce stress.

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.

https://www.facebook.com/timeshareadvocategroup/

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

https://tug2.com/Home.aspx

https://everythingabouttimeshares.com/consider-exchange-options/

https://www.facebook.com/groups/180578055325962/

https://www.facebook.com/groups/465692163568779/

https://www.facebook.com/groups/1639958046252175/

Thank you to all those who have had a hand in the making of this article, your views and insights are greatly appreciated. Now to all our readers, read the bill in the PDF format below and see if you can fathom out what it all means!! Do let us know, we would love to hear from you and publish your thoughts and comments in our comments section.

https://www.flsenate.gov/Session/Bill/2019/00435/?Tab=BillText

https://www.flsenate.gov/Session/Bill/2019/435/BillText/__/PDF

Remember to also contact Representative Duggan and voice your opinions direct.

 

Friday’s Letter from America

Welcome to another Friday’s Letter from America, this week we publish revised instructions on how to file a complaint, this has been revised by one of our readers who was successful.

First a quick piece of news from Europe.

The Supreme Court in Madrid has issued another judgement, Spain’s highest court once again has defended the rights of timeshare consumers, in this case British, by declaring a Diamond Resorts contract null and void. As in all other judgements the court ruled that the contract was in contravention of Law 42/98, as the contract had no end date, known as perpetuity. The law clearly states that timeshare contracts may only be for a minimum of 3 years and a maximum of 50 years.

The court also awarded the clients all money paid in the first three months in double, this reaffirmed the court’s stance on the illegal taking of deposits within the cooling off period. Along with over £11,000 they were also awarded back their legal fees and legal interest. (click on PDF below to see court document)

Supreme Court Diamond Ruling

This is yet another victory for timeshare consumers brought on their behalf by Canarian Legal Alliance.

Now on with this weeks Letter from America.

How to File a Timeshare Complaint (January 25, 2019 revision)

By a Timeshare Member who Followed our Complaint Process

Step 1 GATHER INFORMATION

  1. Read Your Contract and any documents given to you at the time of signing. If your contract offers a rescission and you are still within the offered period you should take the steps necessary to rescind immediately.
  2. Educate yourself! There are many resources in place that are meant to protect consumers (most of which I was completely unaware of until I had to tackle this issue). The more you know the better you will be able to stand up for yourself.

LIST OF RESOURCES AND ORGANIZATIONS TO FAMILIARIZE YOURSELF WITH  

a: AG: Attorney General – You will want to file a complaint with the AG from the state in which you purchased your timeshare. If you can connect with other buyers in your state of residence, file a complaint with your own state Attorney General. See instructions below. Some states, like California and Nevada, require you file your complaint with the state real estate division against the sales agent.

b: ARDA-ROC: American Resort Development Association-Resort Owners Coalition

ARDA Timeshare Consumer Protections Page : Did you receive one of the three required “disclosure documents”? Is there a rescission period? When did it begin/end?

Excerpts from ARDA Code of Ethics: Read this code and make note of any parts that were violated during your purchase.  ARDA ROC does not mediate disputes, but they have a Code of Ethics that may be violated. The full code of ethics can be found here.

http://www.arda.org/ethics/

c: FTC: Federal Trade Commission-Protecting America’s Consumers There is a timeshare tab not easy to find. Follow these instructions: http://insidetimeshare.com/the-tuesday-slot-13/

d: BBB: Better Business Bureau: This is the organization that most people are familiar with and the link to file a complaint is found right on the homepage of their site. You may need to edit your complaint to 4,000 characters, sometimes no easy task. The good thing about the BBB is that they often allow you to log in and file a rebuttal if you disagree with the company’s answer to your complaint.

e: SEC: US Securities and Exchange Commission: You will only file a complaint with the SEC if you were falsely led to believe that the purchase of a timeshare was a good investment. The sale of an investment product must be registered with the SEC.

f: FBI: Sound serious? That’s because it is serious to report a complaint to the FBI. The definition of White Collar Crime is “Deceit, concealment, violation of trust, bait and switch.” File an online complaint at IC3.gov. Select Internet Crime from the three choices available. It’s confusing because your timeshare complaint doesn’t have to be about internet crime. That’s just the name of the portal.

g: Legal Action: Retaining a lawyer is something you can do after you have exhausted the above resources and still feel as though you are getting nowhere. It is a last resort option and it will cost you; make sure that the cost is worth the possible worst-case outcome. There is a compiled list of law firms that specialize in timeshare cases on one Advocacy Facebook page. Law Firms Doc You do not have to use one of these lawyers but it is recommended that you use someone who has specific experience with timeshare, and do not do business with a lawyer or a law firm you do not know. One timeshare lawyer has recently been disbarred

h: TUG: Timeshare Users Group TUG Forums: These forums are incredible for gathering information from other timeshare owners. You can search specific questions to see if anyone else has already asked and received answers.

i: Timeshare Exit Firms: BEWARE! A lot of these firms are scams. Some are not, but you can do the lion’s share of what any exit company can do. Beware especially of money back guarantees. Some companies consider foreclosure an exit. Obviously, you don’t have to pay anyone to get foreclosed. Also, it is important to note that some timeshare companies will not approve voluntary relinquishment of a timeshare if you have contracted with an exit firm.

j: Most would agree The Consumer Financial Protection Bureau does not offer the consumer protections it once did, they still regulate banks. File a complaint with the CFPB if your complaint involves a credit card. Remember to dispute the credit card charge, even if the transaction extends beyond 30 days. Some companies will extend the period if you can present a compelling case for fraud.  The Secret Service also investigates credit card fraud.      

Step 2 HOW TO WRITE A COMPLAINT LETTER

    1. Create a Record of Events: The very first thing you should do is make a list of everything that you were told by timeshare representatives (i.e. salespeople, managers, receptionists, concierge services). Write down every detail that was said even if it seems insignificant; you can always weed out details that are less important later. Your memory of the event will start to warp and change over time so it is important that you write down this information as soon as possible so that every complaint you file has consistent information.
  • Organize the information:

a: Create a Timeline: Begin with when you first became involved with the company and proceed chronologically. Keep your history brief up to the point when things began to go wrong; it at this point you should be as detailed as possible.

What was your first encounter? (phone call, concierge, sales agent)

  • What resort or location did the presentation take place?
  • Date and time of presentation.
  • Names of all sales agents/managers that you dealt with (names will typically be listed somewhere on your contract)
  • How long did they tell you the meeting would last vs what was the actual duration of meeting?
  • Did they offer you food or beverages during the duration of the meeting?
  • Did they take your ID and credit card? Did you ask for these items to be returned?
  • If you feel you experienced unfair and deceptive sales practices, describe your experience.
  • When did you first realize your agent misled you?
  • Was it possible to learn you were deceived during the rescission period? Sometimes an agent will say a bogus program won’t be available until after the first of the year, or wait a few months before refinancing. Banks don’t finance timeshares. Sometime over promised availability can’t be determined until allowed onto the booking site, after the rescission period has expired.  
  • What steps did you take after realizing you were misled? Did you contact the agent or the company? What was their response? List dates/times if possible. Keep all emails.
  • Did the sales person ask you to apply for any credit cards/loans or take any other extraordinary measures (refinance home, equity line of credit, etc.) in order to cover costs? Transferring to a third party lender complicates things.

b: List Relevant Complaints: Here is a list of some common complaints from timeshare owners.  Certain misleading statements are more serious than others:

  • The agent said I could easily sell my points. To find out if your timeshare has a secondary market, contact a member of the Licensed Timeshare Resale Broker Association. They charge no upfront money to list a timeshare. http://www.licensedtimeshareresalebrokers.org/
  • The agent presented maintenance fee relief programs that do not exist
  • The agent said I had to give up my deeded timeshare and buy points
  • The agent said I have to give up my deed and buy points or my heirs will be burdened
  • The agent told me this would be a good investment. At least 49% of the cost of your timeshare is attributed to marketing costs (source a major timeshare company’s annual report)
  • The agent said that I could rent out my timeshare for money when the company rules do not allowed renting
  • The agent overstated the value of travel awards to pay for airline tickets, or the use of a travel credit card to pay maintenance fees
  • The rescission period was dodged

Step 3 EMAIL AND SEND YOUR LETTER OF COMPLAINT

Below is an example of a sample layout with some ideas of information that you might want to include in your letter. Copy and paste your complaint into the body of an email (do not send as an attachment). Email or send to all interested parties, including customer service, ARDA ROC (if their Code of Ethics has been violated), the credit card company if a credit card is involved. You will send your complaint to regulatory agencies if your request is denied, so make sure you take the time to present your grievance clearly and factually. Have a friend or family member read your complaint before submitting to see if they understand the complaint.

Include the following information:

Name(s) of Member(s)

Phone Number

State of Residence

Today’s Date

Member Number

**List the following information for each contract you are disputing**

Date and Place Purchased

Number of Points Purchased

Sales Agent and Sales Agent ID# (if available)

Purchase Price

Down Payment

Amount Financed and Interest Rate

Loan Number

Current Loan Balance

Information to include in the body of the complaint:

  • What do you want? Do you seek a refund, cancellation of contract, or relinquishment?
  • Why? Is it due to Deception, Health, Age or Financial Burden?
  • This is your written timeline. Provide a chronological account of what happened during the sales process that makes you feel you experienced unfair and deceptive sales practices.
  • Consider citing the ARDA code of ethics and what articles of the code were violated.
  • Making emotional statements will most likely not help your case.
  • In conclusion, restate the main complaint and what it is you are asking for.

**Complaints expressing dissatisfaction with general availability will go unheeded and so will requests based on not being able to afford the timeshare.

**If there was no deceit then request relinquishment. This is only an option if your Maintenance fees are current and you have no outstanding loan. Contact your resort for more information about voluntary surrender.  

HOW TO FILE A COMPLAINT WITH THE ATTORNEY GENERAL

  1. File your complaint with the AG from the state in which you purchased your timeshare. In “Part 2” of the link below it explains how to find the correct AG and file a complaint. Some states, like California and Nevada, require you file a timeshare complaint with the state’s real estate division.   

Steps for filing an AG complaint

  1. Always send copies of important documents and keep originals
  2. If not filed online, mail your complaint via Priority Mail with tracking.

OTHER CONSUMER PROTECTION RESOURCES

  • Seniors should consider contacting the AARP Fraud Hotline. Weigh their advice as they are not timeshare experts, but it is important for them to be aware that a significant proportion of complainants are age 60 or older. Click HERE to visit the AARP site.
  • Remember to pay no money upfront without reaching out to other members, or a resource like like TUG Timeshare Users Group
  • Forward your complaint to the Association of Vacation Owners.          AVO Contact Us Page

Contact Inside Timeshare if you are interested in helping other members or have questions about the filing process. Our goal is to make consumers more aware of the financial pitfalls that can result if you buy a timeshare you don’t understand or was not presented truthfully. We know there are many who use and enjoy their timeshares and sales agents that sell the product honestly. Honest sales agents are also negatively affected by predatory sales and lending.    

Timeshare Accountability Group™

Well that is all for this week, remember, before engaging with any company that contacts you or you have found on the internet or through adverts in publications, do you homework and stay safe.

Have a great weekend.

Friday’s Letter from America

Welcome to another Letter from America by our very own Irene Parker, this week we revisit our series on the 3 Rs and 1F of Timeshare, but first a word of caution brought about by some very disturbing emails received by Inside Timeshare.

These emails are all concerning companies our readers have paid to “relinquish” their timeshares, all being told that the “exit notification letter” being sent on their behalf is all that needs to be done and they are now timeshare and maintenance free. They are told they should not engage with the timeshare company or need to pay any further maintenance fee.

Unfortunately this is not the case, several of our readers have paid a certain company who shall remain nameless at present, but they know who they are, to exit their membership with Diamond, around three years ago. These readers are still getting demands for maintenance fees along with a surcharge for interest. They are also being threatened with court action and a debt collection agency.

The company concerned with these exits tells the clients that they are free of their timeshare  and to “DO NOTHING, PAY THEM NOTHING”. “That Diamond would not take court action because they knew they could lose given the dubious selling practices and the fact that no court would allow a company to insist on payments for a product the owner cannot use”.

We know that Diamond does chase unpaid maintenance, the debt is usually passed to Daniels Silverman a Market Leading Debt Recovery Agency, based in Liverpool. So it is not Diamond who take the “debtors” to court, but Daniels Silverman on behalf of their client Diamond.

If you are told to stop paying your maintenance fees until you have official notification from your timeshare company that your contract and membership has been cancelled, then failure to pay puts you in breach of contract.

It is also known that Diamond will not deal with these “exit” companies, they have their own system in place and will deal direct with the member. Remember no matter what these companies tell you, they are not “lawyers”, they do not know timeshare, all they know is how to take your money.

Now for this weeks Letter.

The 3 Rs or F of Timeshare Revisited (prior revision February 16, 2018)

Resolution
Relinquishment
Refund
Foreclosure

By Irene Parker

November 16, 2018

Our Timeshare Advocacy Group™ advocates brace for when timeshare companies hit the “send” button as millions of maintenance fee invoices hit inboxes.

February 16, 2018, when this article was previously published, we had heard from 300 readers since we began counting January 2017. As of November 14, 2018, we have heard from exactly 600 readers.  Not one of our readers was aware of the limited to no secondary market for a timeshare. This often triggers a complaint.

There is rarely a need to pay anyone money to get you out of your timeshare. Special circumstances, or if a member requests an attorney, we refer to one of the law firms we know and trust, if the timeshare company refuses to help. Seeking legal counsel is the right of every citizen if they feel they have been harmed, as is filing regulatory complaints.    

If you have a complaint, 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 no one wins them all.

Timeshare companies cry, “Don’t call an exit company! We have your best interest at heart!” What the timeshare company means is:
Don’t call an exit company because it interferes with our recycled inventory process! Let us foreclose! We make collection calls to you no more than twelve times a day. (Six to each spouse, as has been reported)
When exist companies boast, “We can guarantee you release!” beware that that guarantee may include foreclosure. You don’t need to pay anyone to foreclose.  
Our complaint form: http://insidetimeshare.com/the-tuesday-slot-11/

Our goal:  Convert an angry, desperate, overwhelmed and confused member into an empowered member. Timeshare Advocacy Group™ has 44 core advocates, including a team of reporting advocates to answer questions about regulatory and, if needed, law enforcement filings. 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.

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 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 may be achieved. The complaint process begins with a petition to the resort, followed by the filing of regulatory and law enforcement complaints.

The timeshare lobby ARDA has a Code of Ethics. Not one of the 600 members who have contacted us could tell us what the letters ARDA ROC stand for, yet collectively give about $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 opt-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 approximately 200 complaints to ARDA, questioning ARDA’s Code of Ethics, there has been no response.

ARDA’s 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 Minnesota AG Lori Swanson:  
“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….”
Chris Parker, a reporter for City Pages writes: “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—and details of misconduct are kept private,”

http://www.citypages.com/news/the-plot-to-kill-consumer-protection/451334393

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.
http://insidetimeshare.com/tuesday-slot-arbitration/

According to the FBI agents and attorneys we spoke with, it is not legal for a company to hide behind fine print, providing sales agents the means to say anything they can come up with to sell points. With little enforcement in some states, deception prevails. Families after family have no option but foreclosure, if they have a loan outstanding. Most members contacting us do.        

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.

I ALWAYS tell members when they say, “After we signed we read all these negative complaints!” that there are just as many and more who use and enjoy their timeshare.  

    Foreclosure

This is the least pleasant outcome, but foreclosure is not the end of the world. 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 with the Better Business Bureau, Attorneys General, and lawsuits.

If you foreclose, there will be a hit to your credit score, but if you feel you are a victim of unfair and deceptive sales practices provide the credit rating agencies or your lenders with the reason why you refused to pay off a timeshare loan. Lenders are human. Many will take this into consideration.     

I asked timeshare attorney Mike Finn of the Finn Law Group some common questions we are often asked about the foreclosure process:
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 members be taken to court for non-payment of maintenance fees or loans?

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.

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. A foreclosure on your credit report is quite damning, it will make refinancing or new residential purchases an issue for about five years. Rarely will they sue for deficiency balance.

http://www.finnlawgroup.com/learning-center/can-a-timeshare-hurt-my-credit-score

http://www.finnlawgroup.com/english/learning-center/page-12

Our Advocates, bringing experience and expertise from all walks of life, are here to help you put your timeshare in the rear view mirror, if that is your goal.

Our mission

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.
https://www.facebook.com/timeshareadvocategroup/

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

https://tug2.com/Home.aspx

https://everythingabouttimeshares.com/consider-exchange-options/

https://www.facebook.com/groups/180578055325962/

https://www.facebook.com/groups/465692163568779/

https://www.facebook.com/groups/1639958046252175/

Thank you Irene, useful as always, in the Tuesday Slot next week, we will have another “Secret Shopper” report, edited by Pete Gibbes the Secret Shopper Coordinator, so join us for another insight into the murky world of a timeshare presentation.

Don’t forget the book by Wayne C Robinson, Everything About Timeshares, Before, During and After the Sale, with the forward by Irene Parker, you can obtain your copy from the link below.

https://www.barnesandnoble.com/w/everything-about-timeshares-wayne-c-robinson/1129749757?ean=2940161600962

The Tuesday Slot

Welcome to this weeks Tuesday Slot, once again this is not the article we had scheduled, that has been pulled at the last minute. The original article (which as always was sent to the timeshare company Holiday Inn Vacation Club for comment), was a particularly heart wrenching story of woe, but thanks to someone at the timeshare company, (some of them do have a heart), the matter has been resolved. All we can say to Holiday Inn Vacation Club is thank you and well done for responding so quickly.

Inside Timeshare has been receiving many emails from readers wanting to check on companies calling them, it is that time of year, as maintenance bills start to arrive, so all these companies are getting in with the usual pitch, we can get you out of your timeshare. Unfortunately most are bogus and fake law firms, which we have highlighted in previous articles. So beware the caller, get as much information about them as possible, then contact Inside Timeshare for further help.

We have also heard from one of our German readers regarding Diamond Resorts (Europe), it would appear that Diamond may have changed the policy on exiting the contract. We do know they have exceptional circumstance, which are over 75, death of a partner, financial difficulty and medical, where they will allow exit for free. For those who do not fall into this category they were allowing an exit on payment of 2 years maintenance, well, according to our German reader who applied for this, he was told “NO”! They would only let him out when he fits the exceptional circumstances or reaches 75, until then he must continue to pay maintenance.

We will be keeping an eye on any other developments regarding this, it does seem strange that this policy has suddenly changed. If any of our other readers have experienced this please do let us know, it may be that this was just a one off incident from an un-informed member of staff.

How to File a Timeshare Complaint (October 22, 2018 revision)

               

Start with the Attorneys General Office

If necessary, continue to the FBI at IC3.gov

Finish with the Federal Trade Commission, if Section 5 is violated

If you were sold a timeshare as an investment, file an SEC complaint

“I was told that in order to be released from a timeshare, which was a deeded timeshare, I had to turn the deed into points. Believing the sales agent, on June 19th I bought $12,000 worth of points for no reason. A few weeks after the purchase I learned through Social Media the company has a voluntary surrender program. I had told the sales agent that my wife had bought this timeshare 18 years ago and that I had hated it for 18 years. I explained that I was only attending the presentation to find out how to get rid of it. At that point he should have advised me of the voluntary surrender program instead of selling me points for no reason. The response from the company was it sounds like a ‘he said she said’ and to make matters worse, there is a six month waiting period for the voluntary surrender program.”

We have received 634 timeshare complaints as of October 22, 2018. Recently, several complaints have been from timeshare members who say they were told the timeshare was an investment; the timeshare could be rented for income, and would be easy to sell. The complaints were directed against four timeshare companies.

Marketing a timeshare for the purposes of generating income, or leading the buyer to believe the retail price is what the timeshare is worth, is selling the timeshare as a security without being registered as a security with the Securities and Exchange Commission. Therefore, we have added the SEC as an avenue for grievance if this applies to you.

We have also added the AARP fraud alert. The AARP hotline responders have been responsive, but misleading in their advice. We will be publishing an article shortly to address why we believe AARP is providing misleading information.

https://www.aarp.org/money/scams-fraud/?CMP=KNC-DSO-Adobe-Bing-FWN-Core-Brand-Brand&s_kwcid=AL!4520!10!73804843580956!73804805721970&ef_id=W0ZctQAAAJQd2ANC:20180725171110:s

One Attorney General’s office is directing people to a list of timeshare attorneys. The member pays the attorney, the attorney has no timeshare experience, and the member ends up referred to us. We help for free and the lawyer gets paid. This has happened several times. Do not use an attorney without timeshare experience. The field is too specialized.   

In all but a few cases, the timeshare company has dismissed member complaints with “You signed a contract” or “It doesn’t matter what the sales agent said.” If timeshare companies would acknowledge that some timeshare sales agents do intentionally mislead the consumer, there would be no need to file complaints and no reason for the existence of member supported advocacy groups.

According to FBI agents and lawyers our advocates have consulted, it is not legal to hide behind fine print, but it takes volumes of complaints to raise a regulator’s eyebrow. The Federal Trade Commission released its 2017 complaint report, listing travel, vacation, and timeshare as one of the most costly frauds at $1,710. Our reader complaints dollar amounts range from $4,000 to $400,000 or more. We wish members were only losing $1,710. Inside Timeshare has received complaints from 81 veterans and active duty military and law enforcement.   

Travel, vacation, and timeshare frauds were the most costly with people losing a median amount of $1,710. The FTC also broke out fraud losses for members of the military and found their median fraud loss to be 44 percent higher than the general population.

https://www.jacksonsun.com/story/opinion/columnists/2018/04/06/ftc-releases-2017-complaint-statistics/493425002/

Most of the members contacting us have an outstanding loan. The industry has created this nightmare because if you buy a house and have a loan outstanding, you can still sell the house. When the member alleges they experienced unfair and deceptive sales practices, they have signed a perpetual contract with little or no secondary market. Timeshare companies list a viable secondary market as a risk to their shareholders.

Timeshare Members need to be especially vigilant about “Get you out of your timeshare” firms because many are scams. Some are not. Timeshare Advocacy Group™ (TAG) has a scam research team formed by members who have themselves been scammed. This 15 page US Department of Justice timeshare scam report illustrates the seriousness and extent of the problem, caused by the lack of a viable secondary market.     

https://search.justice.gov/search?query=timeshare+scam+report&op=Search&affiliate=justice  

Advocates for reform feel the problems that exist in the industry today are caused by an overreliance on the oral representation clause, iron clad developer based contracts, the lack of an adequate secondary market, and limited enforcement. We don’t dispute there are many who use and enjoy their timeshare and many sales agents who sell the product properly, but here are the most common timeshare complaints reported by our readers:

  • The agent said I could easily sell my points,
  • The agent overstated the value of travel awards to pay for airline tickets, or the use of a travel credit card to pay maintenance fees,
  • The agent said I had to give up my deeded timeshare and buy points,
  • The agent said I have to give up my deed and buy points or my heirs will be burdened,
  • The rescission clause was dodged because the agent said the (bogus) program would not be available until after the first of the year, or we were not allowed access to the booking site until after the rescission period.    

To begin your complaint, raise your right hand.

Do you promise to tell the truth, the whole truth, and nothing but the truth, so help you God? Present your information factually and without opinion or inflammatory language.

Information Needed to File a Timeshare Complaint

Name (s) and age of member

Phone Number

State of Residence

Member Number

For each contract in dispute:

Where Purchased and Date of Purchase

Number of Points Purchased

Sales Agent and Sales Agent ID# (if available)

Purchase Price

Down Payment

Amount Financed and Interest Rate

Loan Number

Current Loan Balance

Name of Credit Card if one was used to pay the down payment

What do you want? Do you seek Refund or Relinquishment?

Why? Is it due to Deception, Health, Age or Financial Burden?

Complaints expressing dissatisfaction with general availability will go unheeded as will a request based on not being able to afford the timeshare. If you feel you were deceived, list the reasons why. If there was no deceit, ask for relinquishment. Maintenance fees must be current and there can be no loan outstanding. Just like your personal residence, you can’t go to your home mortgage lender and say you can’t afford it. The difference is you can sell your home if there is an outstanding loan.  Section 5 Federal Trade Commission, explains unfair and deceptive practices:

FTC Unfair Practices

An act or practice is unfair where it

  • causes or is likely to cause substantial injury to consumers;
  • cannot be reasonably avoided by consumers; and
  • is not outweighed by countervailing benefits to consumers or to competition.

 

FTC Deceptive Practices

An act or practice is deceptive where

  • a representation, omission, or practice misleads or is likely to mislead the consumer;
  • a consumer’s interpretation of the representation, omission, or practice is considered reasonable under the circumstances; and
  • the misleading representation, omission, or practice is material.

https://www.federalreserve.gov/boarddocs/supmanual/cch/ftca.pdf

MOST IMPORTANT – Purchase Timeline

It is better to state your narrative as a narrative referring back to the figures at the top of your complaint. Begin with when you first became involved with the company and proceed chronologically. Keep your history brief up to the point when things began to go wrong.

After you complete your complaint, email it to the appropriate resort department. Expect to be denied. Typically your resort reviewer will restate your concerns, produce your initials and signatures, point out the oral representation clause and inform you, “If something was important to you, you should have asked for it to be put in the contract.” File a rebuttal if you disagree with the company response.

Mark your email to the resort urgent if you are in financial distress. It is best to file a complaint before the debt collectors are hounding. If one of our advocates is assisting the member, the member will report back to us if the issue is resolved. Due to the required non-disclosure, terms and conditions will not be discussed.

Attorneys General

If the resort has dismissed your complaint, the next step is to file a complaint with the Attorney General of the state where you signed your contract. It can take sometimes a month to hear back from an AG. You can find any Attorney General by searching the state name and Attorney General. Some states will direct you to the real estate or consumer division. You should file a complaint with the state Real Estate Division against the agent if the agent was deceptive. Not all states require timeshare sales agents be real estate licensed.     

We have determined, based on reports from our readers, some Attorneys General walk lockstep with the developer, responding to complaints with, “You should not have relied on verbal representations.” Thus, in those states, the consumer is out in the cold and at the mercy of the developer’s decision. In other states, Attorneys General have opened investigations and reached settlements based on a volume of complaints and a pattern of consistent reports of deceptive behavior.

The FBI

Any complaint reported to the FBI should be of a more egregious nature. “They promised me a free cruise but it wasn’t free” is an example of a complaint that is not serious enough for the FBI. Our opening example, describing a buyer told they had to give up their timeshare deed when that was not necessary, would merit an IC3.gov report. To determine if your complaint is serious enough to file an FBI complaint, review the FBI definitions of criminal acts:  

White-collar crimes are characterized by deceit, concealment, or violation of trust and are not dependent on the application or threat of physical force or violence. The motivation behind these crimes is financial—to obtain or avoid losing money, property, or services or to secure a personal or business advantage. These are not victimless crimes. A single scam can destroy a company, devastate families by wiping out their life savings, or cost investors billions of dollars (or even all three).

Mortgage fraud is a subcategory of financial institution fraud known as “fraud for profit”:

Fraud for profit: Those who commit this type of mortgage fraud are often industry insiders using their specialized knowledge or authority to commit or facilitate the fraud. Current investigations and widespread reporting indicate a high percentage of mortgage fraud involves collusion by industry insiders, such as bank officers, appraisers, mortgage brokers, attorneys, loan originators, and other professionals engaged in the industry. Fraud for profit aims not to secure housing, but rather to misuse the mortgage lending process to steal cash and equity from lenders or homeowners. The FBI prioritizes fraud for profit cases.

https://www.fbi.gov/investigate/white-collar-crime

The FBI has advised our members, if the allegation involves credit card fraud, the member should also file a complaint with the Secret Service.

https://ask.metafilter.com/81136/Should-I-call-the-Secret-Service-over-credit-card-fraud

Most important, consider reaching out to local or national media. Reporters look for content and are surprisingly easy to reach. Write an article about your experience. The more people who come forward, the more the public is made aware of timeshare black holes before engaging in a timeshare sales presentation.

Summary of Regulatory and Law Enforcement Agencies

  • The Attorney General’s office where you signed your contract. Most AG complaints can be filed online.
  • The Real Estate Division of the state where the agent is licensed if your complaint is against the agent.
  • The FBI at IC3.gov portal if you feel you were deceived. For allegations of a serious nature you may also contact an FBI field office to file a tip orally. Have your facts and figures ready. The FBI complaint website is called IC3.gov which stands for Internet Crime. This is a bit confusing. IC is the name of the portal. That doesn’t mean it has to be an internet crime. Click IC3 as your choice when filing. Sometimes your local field office will pay closer attention than say Las Vegas, where losing money is a tourist attraction. You can find your nearest field office from this website. https://www.fbi.gov/contact-us/field-offices https://www.ic3.gov/default.aspx
  • The Federal Trade Commission is one of the most important agencies to file with, because it is federal. Most states have incorporated a portion of the FTC’s “Unfair and Deceptive Trade Act” in their state law. It’s tricky to find the timeshare tab. Look for “next page” until you find it.   
  • The media – the court of public opinion is often the only court available. Inside Timeshare, published in Spain, welcomes member submissions, positive or negative.
  • The Consumer Financial Protection Bureau for credit card or lending complaints, under the mortgage option (even if no mortgage), selecting the bank involved. Timeshare has dodged this regulatory bullet because most members don’t know the identity of the lender as the timeshare company often services the loan (Timeshare companies are not an option from the CFPB’s drop-down menu). CFPB is the organization that helped Wells Fargo victims. The CFPB lost influence after the roll back of the Dodd Frank act March 2018. The Dodd Frank act was enacted after the abuses caused by subprime lending. The CFPB is still considered a regulator. https://www.consumerfinance.gov/
  • File a complaint with the Better Business Bureau. The company’s BBB rating can be misleading in that the BBB only rates how efficiently a company responds to complaints. Sometimes the BBB allows you to log in and file a rebuttal. If you file a complaint, a review is not allowed. We have received complaints from members reporting that a company representative called, saying the message is time sensitive, but does not answer the phone when the member repeatedly tries to call back. We suspect this boosts the company BBB rating because the company can report, “We reached out.”
  • Lawmakers – The problem is the timeshare buyer typically does not buy in their state of residence which is why lawmakers don’t seem to take timeshare seriously. Still, any effort to contact lawmakers is encouraged.
  • The Securities and Exchange Commission for selling timeshare points as an investment without being registered as a security.
  • AARP Fraud Watch

If this sounds like work, it is, but you can file with some, all, or none of the agencies. If you pick two, pick the Attorney General and the FTC. We have a team of advocates who can answer questions and help guide you through the process. We feel “Action and Advocacy” is the best way to change questionable timeshare business practices. Many families contacting us are financially devastated by their decision to buy a timeshare. We seek to promote consumer awareness.   

Depending on the seriousness of your complaint, you may forward your complaint to the firm’s public relations office or firm and to ARDA, the timeshare industry’s PAC, for violating ARDA’s Code of Ethics. ARDA’s Code of Ethics can be found on ARDA’s website. ARDA ROC does not mediate disputes, but ARDA does have a Code of Ethics. Due to lack of response to over 200 of the more serious complaints we forwarded to ARDA, we do not recommend owners make the voluntary “opt in” or “opt out” ARDA ROC donation on your maintenance fee invoice. Not one of the members we questioned knew what ARDA ROC stands for, yet collectively members gives ARDA ROC about $5 million a year. It is the opinion of our advocates, that although ARDA lobbies for the industry and for timeshare members, when the issue at stake is one that is at odds with members, members lose because they have no voice.

You may also forward your complaint to the Association of Vacation Owners.

https://avoworldwide.com/news/

AVO has been tracking our complaints for research purposes. http://insidetimeshare.com/the-tuesday-slot-with-irene-3/

If you are granted a positive outcome, you may not say or write anything disparaging about the resort, but there is no harm in staying involved by referring timeshare members who need help to Inside Timeshare or to one of the self-help groups listed below we know are not industry influenced.  

Who We Are and Why We Do This

Our advocates are not attorneys and we do not provide legal advice. We have researched regulatory agencies and are here to direct consumers to the appropriate regulatory and law enforcement agencies. The right to file a regulatory complaint is the right of every citizen who feels they have been wronged.  

It’s a good idea to contact a member of the Licensed Timeshare Resale Broker Association to find out whether your timeshare has a secondary market. http://www.licensedtimeshareresalebrokers.org/

Venting on complaint sites has no effect whatsoever but an organized campaign to track complaints and report alleged fraud has already born fruit in the form of Attorneys General investigations and greater public awareness.

If all else fails, we will refer to an attorney if the member can afford one. If you are forced into foreclosure, but have an otherwise unblemished credit report, you can write to the credit reporting agencies in an effort to explain why you were deceived and why you were not able to resolve your dispute.

Contact Inside Timeshare or email Irene Parker at [email protected] or call 270-303-7572 EST if you are interested in becoming a volunteer. Feel free to call any day of the week from 1:00 to 5:00 PM EST. It’s best to schedule a call. All calls and emails are returned within 24/48 hours.  If your email is not returned, please resend and send a text message.

 Self-help groups seek to provide 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. We hope to promote a better relationship between disgruntled timeshare buyers and their respective resort. We appreciate all timeshare companies who have responded to article drafts and resolved customer issues. Inside Timeshare would always rather see a dispute resolved over publishing an article.

https://www.facebook.com/timeshareadvocategroup/

https://tug2.com/Home.aspx

https://everythingabouttimeshares.com/consider-exchange-options/

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

https://www.facebook.com/groups/180578055325962/

https://www.facebook.com/groups/465692163568779/

https://www.facebook.com/groups/1639958046252175/

October 23, 2018 Irene Parker

Timeshare Advocacy Group     

Related article: FTC Section 5

http://insidetimeshare.com/fridays-letter-from-america-12/

If you have any timeshare problem or need help in checking if a company is genuine, contact Inside Timeshare with the details, we will point you in the right direction.

Friday’s Letter from America

Welcome to this week’s Letter from America, this article is based on a report released by the St Louis Better Business Bureau, it is based on their full report published on the BBB website which we have included as a link. The full report carries some very sound advice along with recommendations for Government and the industry. Whether they take note is another matter.

August is the month for Spain to basically close down, so there is no news from the courts, but this little snippet from the RDO website news section and published on 24 July caught our attention.

“We never sleep”

During this particular break-out session the RDO legal panel will provide attendees with an update on a range of issues, including the latest developments in the Spanish Supreme Court rulings and the on-going lobbying programme.

Other issues that will be covered within the session will be ongoing collaboration with UK authorities to take fraudulent individuals/companies to court and new legislation that is being developed to curb the activities of claims companies. Attendees will also learn how ARDA is dealing with similar issues in the US and whether there are lessons for RDO and its members.

Well one thing is for sure, the RDO obviously believe that the Spanish timeshare laws are not good for the industry, with the judges getting it wrong, along with their belief that they will be able to change things in their favour through the lobbying programme. Well somehow I don’t think the Spanish authorities will be looking to changing their laws to return back to the bad old days!

In the end these court cases that are being brought are of the industries own making, if they had abided by the laws in the first place they would not be paying for it now. A very good case to remember is Silverpoint, whose CEO Mark Cushway was at one time also a director of the RDO, this company is being pilloried by the lower courts in Tenerife and the Supreme Court in Madrid.

Why?

Quite simple, they sold a product that flouted virtually every article of Law 42/98, especially with their promise of the “investment” weeks, where unsuspecting purchasers, many of them on the verge of retirement, were sold under high pressure and very misleading sales pitches a promise that these weeks would be sold or rented out. These never materialised and are the subject of many of these court cases. All this while Mark Cushway was one of the directors of the industry trade body, there to ensure that members operated in a legal and ethical manner.

On the legal front, Canarian Legal Alliance has just published their mid year report, it is certainly impressive and really does put the above statement from the RDO in a different light. Follow the link for the full report direct from the lawyers themselves.

https://canarianlegalalliance.com/canarian-legal-alliance-mid-term-successes/

Now on with our Letter from America.

Timeshare is a Highly Regulated Product?

A St. Louis Better Business Bureau Timeshare Report

Released July 24, 2018

Don’t Fall for Deception Pressure and Traps Disguised as Vacations

August 3, 2018

Inside Timeshare has received complaints against Florida, Nevada, Missouri, Hawaii, California, and Virginia sales centers. Missouri is no worse than the other states. We appreciate the St. Louis, Missouri Better Business Bureau taking timeshare complaints seriously.

From: American Resort Development Association’s Code of Ethics:

According to ARDA’s website – “Vacation Ownership is one of the most highly regulated vacation products in today’s consumer marketplace.”

From the St. Louis Better Business Bureau report:

https://www.bbb.org/en/us/article/news-releases/18149-dont-fall-for-deception-pressure-and-traps-disguised-as-vacations-a-better-business-bureau-study-of-the-missouri-timeshare-vacation-club-industry?bbbid=0734

RECOMMENDATIONS FOR GOVERNMENT

  • Tougher law enforcement action. Regulatory agencies have reported receiving an increasing number of complaints about the timeshare industry. Bringing action against any bad actors in the industry could help consumers and deter companies from violating consumer protection laws.
  • New laws. BBB hears from many senior citizens who have been affected by the timeshare industry. Missouri legislators should consider special protections for those 65 and older who enter into agreements with timeshare and travel club companies. An extended right of rescission period could help seniors who may not totally understand what they have purchased. All consumers should receive pertinent information – such as access to websites and passwords – at point of purchase so that they can check potential savings and actual values of timeshares on resale market so that if they decide to cancel, they can take advantage of the rescission period.

(BBB) RECOMMENDATIONS FOR THE INDUSTRY

  • More honesty from the industry. The timeshare industry needs to develop and adhere to a set of ethical standards to address widespread reports of high-pressure and deceptive sales practices and to deliver accurate, honest sales pitches to consumers. Reputable companies do not pressure consumers over several hours to purchase services they had little interest in buying or, in some instances, can’t even afford. If presentations are held, consumers should not be detained past the scheduled time or express a false sense of urgency to act immediately. Avoid telling consumers something that will entice them to sign but is later contradicted by your contract.
  • Honor promises. Provide tickets or other promotional items at the time of the presentation. Do not mail them later or make the consumer obtain them from another source.  
  • Do not mislead about timeshare inheritance. Too often misleading statements or scare tactics are used to encourage those who have inherited a timeshare to believe they are liable for it. Don’t misrepresent the law or circumstances for financial gain.
  • Do not require consumers to initial documents “under duress.” Too often, consumers are faced with presentations consisting of long hours; eventually succumbing to high pressure sales tactics.
  • More transparency from the industry. If a consumer is referred  to another company or person to complete the presentation process, be transparent about the process (ie. obligation to sit through a two hour presentation to obtain discounted tickets) and amount of time it will actually take to possibly alleviate someone from their timeshare.
  • Eliminate company mediation. Do not require consumers to mediate through the company’s internal program should a dispute arise. Instead, use neutral, third-party mediation source such as Better Business Bureau or American Arbitration Association.
  • Easier exits. The recent establishment of deed-back programs may be a step in the right direction. More consumers should be able to take advantage of these programs. The establishment of more deed-back programs is likely to lead in a decrease in fraud seen in the resale and exit markets.

Inside Timeshare has received 515 timeshare complaints from our readers, 271 since January 1. All but a handful report their complaint was dismissed with “You signed a contract” or “We are not responsible for what our sales agents say.” Our advocacy efforts have had an effect. After publishing this last statement a few times, the defense has been changed to, “It sounds like a he said, she said” still relying on the oral representation clause. About 200 complaints were copied to ARDA / ARDA ROCbut were ignored.

If “You signed a contract” – is the industry’s official policy, and the regulator’s position in some states, the public needs to be made aware misrepresentations reported by timeshare buyers will be ruled in favor of the timeshare sales agent. In Florida and Nevada, all our readers’ complaints filed with those state Attorney General’s timeshare divisions have been dismissed with “You don’t have proof.” An upcoming article examines proof and why FBI agents and several attorneys don’t buy this response.

Inside Timeshare contributor Sheila Brust reported, “We were given ludicrous advice from a regulator that is clearly out of touch with timeshare consumer reality. I was told to contact a licensed timeshare resale broker, but every agent I contacted informed me my timeshare had no secondary market. By steering complaining members to licensed real estate agents, when turned down, members often end up the contacting a scam that will charge the member upfront money promising to sell or cancel their timeshare. Often that promise falls short.”

Inside Timeshare has received numerous complaints against Branson, Missouri sales centers. Our researchers discovered one Branson timeshare sales manager was selling points at the same time he was working for a timeshare exit company named Mutual Release a suspicious name for a company, as mutual release is the form signed when a timeshare issue has been resolved.

Our Advice

DON’T FINANCE A VACATION or any Luxury Item AT 12% TO 19% and don’t believe a word a timeshare sales agent says. As the St. Louis BBB recommends, check with a member of the Licensed Timeshare Resale Broker Association before buying any timeshare. There you will receive straight answers.

 http://www.licensedtimeshareresalebrokers.org/

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.

https://www.facebook.com/timeshareadvocategroup/

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

https://tug2.com/Home.aspx

https://www.facebook.com/groups/180578055325962/

https://www.facebook.com/groups/465692163568779/

https://www.facebook.com/groups/1639958046252175/

Sometimes it’s hard to focus on the positives when it feels like the battle is all uphill. All we can do is reach out to those who feel lost to let them know Inside Timeshare and real advocacy groups are there for them. Consumer and advocacy are two words members should take with a grain of salt, used and abused by scam artists. We are real advocates.   

That’s it for this week, Friday is here and the weekend is about to start, for those in Europe beware the heat wave, especially if you are travelling to Spain, Seville is reported to be facing temperatures of 48º C or 118º F.

Join us next week for more news and views on the world of timeshare, don’t forget if you have any comments, questions or just need to know about any company that has contacted you or you have found on the internet, then use our contact page and we will point you in the right direction.

Have a great weekend and don’t get sunburnt!

The Tuesday Slot with Irene

This week’s Tuesday Slot we publish a revised article on How to File a Complaint, but first a quick word on the article yesterday and the post on Timeshare Talk by Mr William Dobbs. We have had several emails from readers venting there disgust at the use of Ian Smart’s name considering he passed away.

Mr Dobbs you should think very carefully at what you write and who about, to use the name of a deceased person who cannot speak or defend himself is the lowest of the low. I have had emails from his personal friends and family, all demand the removal of his name and for you Mr Dobbs to publish an apology.

It is also clear that you have no idea what you are saying or writing, yes I do know many of the people on that list, after all it is my job to know, but much of it is so out of date it is laughable. One person who you mention as sales at Palm Oasis, has not even been in the industry for at least 15 years and as we stated yesterday, in any industry people will be acquainted with each other. So Mr Dobbs will his family and friends get the apology?

Now on with today’s article.

How to File a Timeshare Complaint (July 17, 2018 revision)

  

Start with the Attorneys General

If necessary, continue to the FBI at IC3.gov

Finish with the Federal Trade Commission, if Section 5 is violated

FTC Unfair Practices

An act or practice is unfair where it

  • causes or is likely to cause substantial injury to consumers;
  • cannot be reasonably avoided by consumers; and
  • is not outweighed by countervailing benefits to consumers or to competition.

FTC Deceptive Practices

An act or practice is deceptive where

  • a representation, omission, or practice misleads or is likely to mislead the consumer;
  • a consumer’s interpretation of the representation, omission, or practice is considered reasonable under the circumstances; and
  • the misleading representation, omission, or practice is material.

https://www.federalreserve.gov/boarddocs/supmanual/cch/ftca.pdf

“I was told that in order to be released from a timeshare I had owned for years, which was a deeded timeshare week, I had to turn the deed into points. Believing the sales agent, on June 19th I bought $12,000 worth of points for no reason. A few weeks after purchase I learned through Social Media the company has a voluntary surrender program.” (Example of an actual complaint)

Inside Timeshare has received 499 U.S. timeshare complaints as of July 16, 2018. All but a handful of complainants allege they had been sold a timeshare by deception. In all but a few cases, the member was dismissed with “You signed a contract” or “It doesn’t matter what the sales agent said.” If timeshare companies would acknowledge that some timeshare sales agents do intentionally mislead the consumer, there would be no need to file complaints and no reason for the existence of member supported advocacy groups.

According to FBI agents and lawyers our advocates have consulted, it is not legal to hide behind fine print, but it takes volumes of complaints to raise a regulator’s eyebrow. The Federal Trade Commission released its 2017 complaint report, listing travel, vacation, and timeshare as one of the most costly frauds at $1,710. Our reader complaints dollar amounts range from $4,000 to $400,000 or more. We wish members were only losing $1,710. Inside Timeshare has received complaints from 61 veterans and active duty military and law enforcement.   

Travel, vacation, and timeshare frauds were the most costly with people losing a median amount of $1,710. The FTC also broke out fraud losses for members of the military and found their median fraud loss to be 44 percent higher than the general population.

https://www.jacksonsun.com/story/opinion/columnists/2018/04/06/ftc-releases-2017-complaint-statistics/493425002/

Timeshare Members need to be especially vigilant about “Get you out of your timeshare” firms because many are scams. Some are not. Timeshare Advocacy Group™ (TAG) has a scam research team formed by members who have themselves been scammed. This 15 page US Department of Justice timeshare scam report illustrates the seriousness and extent of the problem, caused by the lack of a viable secondary market. Timeshare company annual and quarterly reports have mentioned a viable secondary market as a risk to investors.    

https://search.justice.gov/search?query=timeshare+scam+report&op=Search&affiliate=justice  

Advocates for reform feel the problems that exist in the industry today are caused by an overreliance on the oral representation clause, iron clad developer based contracts, the lack of an adequate secondary market, and limited enforcement. We don’t dispute there are many who use and enjoy their timeshare and many sales agents who sell the product properly, but here are the most common timeshare complaints reported by our readers:

  • The agent said I could easily sell my points,
  • The agent overstated the value of travel awards to pay for airline tickets, or the use of a travel credit card to pay maintenance fees,
  • The agent said I had to give up my deeded timeshare and buy points,
  • The agent said I have to give up my deed and buy points (or buy enough points to get to the next loyalty level) or my heirs will be burdened,
  • The rescission clause was dodged because the agent said the (bogus) program would not be available until after the first of the year, or we were  not allowed access to the booking site until after the rescission period.

To begin your complaint, raise your right hand.

Do you promise to tell the truth, the whole truth, and nothing but the truth, so help you God? Present your information factually and without opinion or inflammatory language.

Information Needed to File a Timeshare Complaint

Name (s) and age of member

Phone Number

State of Residence

Member Number

For each contract in dispute:

Where Purchased and Date of Purchase

Number of Points Purchased

Sales Agent and Sales Agent ID# (if available)

Purchase Price

Down Payment

Amount Financed and Interest Rate

Loan Number

Current Loan Balance

Name of Credit Card if one was used to pay the down payment

What do you want? Do you seek Refund or Relinquishment?

Why? Is it due to Deception, Health, Age or Financial Burden?

Complaints expressing dissatisfaction with general availability will go unheeded as will a request based on not being able to afford the timeshare. If you feel you were deceived, list the reasons why. If there was no deceit, ask for relinquishment. Maintenance fees must be current and there can be no loan outstanding. Just like your personal residence, you can’t go to your home mortgage lender and say you can’t afford it. The difference is you can sell your home if there is an outstanding loan.  

MOST IMPORTANT – Purchase Timeline

It is better to state your narrative as a narrative referring back to the contracts and figures at the top of your complaint. Begin with when you first became involved with the company and proceed chronologically. Keep your history brief up to the point when things began to go wrong.

After you complete your complaint, email it to the appropriate resort department. Expect to be denied. Typically your resort reviewer will restate your concerns, produce your initials and signatures, point out the oral representation clause and inform you, “If something was important to you, you should have asked for it to be put in the contract.” File a rebuttal if you disagree with the company response.

Mark your email to the resort urgent if you are in financial distress. It is best to file a complaint before the debt collectors are hounding. If one of our advocates is assisting the member, the member will report back to us if the issue is resolved. Due to the required non-disclosure, terms and conditions will not be discussed.

Attorneys General

If the resort has dismissed your complaint, the next step is to file a complaint with the Attorney General of the state where you signed your contract. It can take sometimes a month to hear back from an AG but once your complaint has been accepted, debt collectors are not allowed to call. You can find any Attorney General by searching the state name and Attorney General. Some states will direct you to the real estate or consumer division. You should file a complaint with the state Real Estate Division against the agent if the agent was deceptive. Not all states require timeshare sales agents be real estate licensed.     

We have determined, based on reports from our readers, some Attorneys General walk lockstep with the developer, responding to complaints with, “You should not have relied on verbal representations.” Thus, in those states, the consumer is out in the cold and at the mercy of the developer’s decision. In other states, Attorneys General have opened investigations and reached settlements based on a volume of complaints and a pattern of consistent reports of deceptive behavior.

The FBI

Any complaint reported to the FBI should be of a more egregious nature. “They promised me a free cruise but it wasn’t free” is an example of a complaint that is not serious enough for the FBI. Our opening example, describing a buyer told they had to give up their timeshare deed when that was not necessary, would merit an IC3.gov report. To determine if your complaint is serious enough to file an FBI complaint, review the FBI definitions of criminal acts:  

White-collar crimes are characterized by deceit, concealment, or violation of trust and are not dependent on the application or threat of physical force or violence. The motivation behind these crimes is financial—to obtain or avoid losing money, property, or services or to secure a personal or business advantage. These are not victimless crimes. A single scam can destroy a company, devastate families by wiping out their life savings, or cost investors billions of dollars (or even all three).

Mortgage fraud is a subcategory of financial institution fraud known as “fraud for profit”:

Fraud for profit: Those who commit this type of mortgage fraud are often industry insiders using their specialized knowledge or authority to commit or facilitate the fraud. Current investigations and widespread reporting indicate a high percentage of mortgage fraud involves collusion by industry insiders, such as bank officers, appraisers, mortgage brokers, attorneys, loan originators, and other professionals engaged in the industry. Fraud for profit aims not to secure housing, but rather to misuse the mortgage lending process to steal cash and equity from lenders or homeowners. The FBI prioritizes fraud for profit cases.

https://www.fbi.gov/investigate/white-collar-crime

The FBI has advised our members, if the allegation involves credit card fraud, the member should also file a complaint with the Secret Service.

https://ask.metafilter.com/81136/Should-I-call-the-Secret-Service-over-credit-card-fraud

Most important, consider reaching out to local or national media. Reporters look for content and are surprisingly easy to reach. Write an article about your experience. The more people who come forward, the more the public is made aware of timeshare black holes before engaging in a timeshare sales presentation.

Summary of Regulatory and Law Enforcement Agencies

  • The Attorney General’s office where you signed your contract. Most AG complaints can be filed online.
  • The Real Estate Division of the state where the agent is licensed if your complaint is against the agent.
  • The FBI at IC3.gov portal if you feel you were deceived. For allegations of a serious nature you may also contact an FBI field office to file a tip orally. Have your facts and figures ready. The FBI complaint website is called IC3.gov which stands for Internet Crime. This is a bit confusing. IC is the name of the portal. That doesn’t mean it has to be an internet crime. Click IC3 as your choice when filing. Sometimes your local field office will pay closer attention than say Las Vegas, where losing money is a tourist attraction. You can find your nearest field office from this website. https://www.fbi.gov/contact-us/field-offices https://www.ic3.gov/default.aspx
  • The Federal Trade Commission is one of the most important agencies to file with, because it is federal. Most states have incorporated a portion of the FTC’s “Unfair and Deceptive Trade Act” in their state law.   
  • The media – the court of public opinion is often the only court available. Inside Timeshare, published in Spain, welcomes member submissions, positive or negative.
  • The Consumer Financial Protection Bureau for credit card or lending complaints, under the mortgage option (even if no mortgage), selecting the bank involved. Timeshare has dodged this regulatory bullet because most members don’t know the identity of the lender as the timeshare company often services the loan (Timeshare companies are not an option from the CFPB’s drop-down menu). CFPB is the organization that helped Wells Fargo victims. The CFPB lost influence after the roll back of the Dodd Frank act March 2018. The Dodd Frank act was enacted after the abuses caused by subprime lending. The CFPB is still considered a regulator. https://www.consumerfinance.gov/
  • File a complaint with the Better Business Bureau. The company’s BBB rating can be misleading in that the BBB only rates how efficiently a company responds to complaints. Sometimes the BBB allows you to log in and file a rebuttal. If you file a complaint, a review is not allowed. We have received complaints from members reporting that a company representative called, saying the message is time sensitive, but does not answer the phone when the member repeatedly tries to call back. We suspect this boosts the company BBB rating because the company can report, “We reached out.”
  • Lawmakers – The problem is the timeshare buyer typically does not buy in their state of residence which is why lawmakers don’t seem to take timeshare seriously. Still, any effort to contact lawmakers is encouraged.

If this sounds like work, it is, but you can file with some, all, or none of the agencies. If you pick two, pick the Attorney General and the FTC. We have a team of advocates who can answer questions and help guide you through the process. We feel “Action and Advocacy” is the best way to change questionable timeshare business practices.  

Depending on the seriousness of your complaint, you may forward your complaint to the firm’s public relations office or firm and to ARDA, the timeshare industry’s PAC, for violating ARDA’s Code of Ethics. ARDA’s Code of Ethics can be found on ARDA’s website. ARDA ROC does not mediate disputes, but ARDA does have a Code of Ethics. Due to lack of response to about 200 of the more serious complaints we sent to ARDA, we do not recommend owners make the voluntary “opt in” or “opt out” ARDA ROC donation on your maintenance fee invoice. Not one of the members we questioned knew what ARDA ROC stands for, yet collectively gives ARDA ROC about $5 million a year. It is the opinion of our advocates, that although ARDA lobbies for the industry and for timeshare members, when the issue at stake is one that is at odds with members, members lose because they have no voice.

You may also forward your complaint to the Association of Vacation Owners. AVO has been tracking our complaints for research purposes. http://insidetimeshare.com/the-tuesday-slot-with-irene-3/

If you are granted a positive outcome, you may not say or write anything disparaging about the resort, but there is no harm in staying involved by referring timeshare members who need help to Inside Timeshare or to one of the self-help groups listed below we know are not industry influenced.  

Who We Are and Why We Do This

Our advocates are not attorneys and we do not provide legal advice. We have researched regulatory agencies and are here to direct consumers to the appropriate regulatory and law enforcement agencies. The right to file a regulatory complaint is the right of every citizen who feels they have been wronged.  

It’s a good idea to contact a member of the Licensed Timeshare Resale Broker Association to find out whether your timeshare has a secondary market. http://www.licensedtimeshareresalebrokers.org/

Venting on complaint sites has no effect whatsoever but an organized campaign to track complaints and report alleged fraud has already born fruit in the form of Attorneys General investigations and greater public awareness.

If all else fails, we will refer to an attorney if the member can afford one. If you are forced into foreclosure, but have an otherwise unblemished credit report, you can write to the credit reporting agencies in an effort to explain why you were deceived and why you were not able to resolve your dispute.

Contact Inside Timeshare or email Irene Parker at

[email protected] or call 270-303-7572 EST if you are interested in becoming a volunteer. Feel free to call any day of the week from 1:00 to 5:00 PM EST. It’s best to schedule a call. All calls and emails are returned within 24/48 hours.  If your email is not returned, please resend and send a text message.

Self-help groups seek to provide 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.

https://www.facebook.com/timeshareadvocategroup/

http://tug2.net/

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

https://www.facebook.com/groups/180578055325962/

https://www.facebook.com/groups/465692163568779/

https://www.facebook.com/groups/1639958046252175/

July 7, 2018 Irene Parker Timeshare Advocacy Group™     

Related article: FTC Section 5

http://insidetimeshare.com/fridays-letter-from-america-12/

That’s it for today, you now have all the information to be able to file a complaint, if you need any help with this or want to know about any company that has contacted you or you have found on the internet, then use our contact page and we will point you in the right direction.