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letter-from-america

Friday’s Letter from America

It’s Friday, so time for another Letter from America with Irene Parker, but first a look today’s major news in Europe.

El Diario a prominent Spanish daily newspaper published the following article today (see link for full story).

The article reports on the current legal actions against Anfi and tells of the 1.35 million Euros they have had to repay to consumers, in the execution of around fifty judgements. It also goes on to say that there are over 395 live cases at court with a value of over 27 million Euros, with over 100 having had decisions in favour of the consumers. Some of these are firm decisions with the sentences yet to be executed, others are awaiting confirmation.

With even the Spanish press publishing articles such this, it does make the claim by Anfi that they have not lost or the Supreme Court has got it wrong rather flimsy!

In fact on Tuesday yet another sentence was announced by the Court of First Instance against Anfi, again the clients contract was declared null and void with the judge ordering Anfi to return over £20,000 plus legal interest

(if using google. Right click on the article for a translation to English)

http://www.eldiario.es/canariasahora/tribunales/Grupo_Anfi-condenas-negocio-timesharing_0_739477033.html

The same article has also been published in Canarias7, one of the major Canary Islands Newspapers.

https://www.canarias7.es/economia/turismo/anfi-paga-ya-1-35-millones-por-condenas-YK3590405

Now for this weeks Letter from America.

 

The 3 Rs or F of Timeshare Revisited (first published in three parts)

Timeshare Resolution, Relinquishment, Refund, Foreclosure

Magnify

By Irene Parker

February 16, 2018

There are many who use and enjoy their timeshare, but rising maintenance fees, high interest rate loans and higher interest rate developer issued credit cards can spell financial disaster, especially when an individual or family is hit with an unexpected life crisis. Not one of the more than 300 Inside Timeshare readers who have contacted us realized the perpetual nature of the timeshare contract (in the US), or that their timeshare had little or no secondary market. It is not uncommon for a family to have spent $100,000 or more on a timeshare.

There is rarely a need to pay anyone, or any firm, money to get you out of your timeshare. Special circumstances, like being in the middle of buying a house, may result in a referral to one of the law firms we know and trust, if the timeshare company refuses to help the individual or family.   

Our “How to File a Complaint” form explains a process that takes time, determination and effort, but when it works, it costs nothing. We say when, because we don’t win them all. No one does, not even lawyers. “We can guarantee you release!” boasts the exit timeshare ad. We have had reports of people paying scammers large sums of money for a guaranteed release, only to learn the guarantee came about because of foreclosure or non-payment.

Our complaint form: http://insidetimeshare.com/file-timeshare-complaint-revised/

The goal:  Convert from angry, desperate, overwhelmed and confused into empowered. Timeshare Advocacy Group™   has 44 core advocates and 10 technical support advocates to help you. All of our Advocates are unpaid.

The First R: Relinquishment

dont like

Some timeshare companies offer voluntary surrender programs, but relinquishments are not guaranteed and there cannot be an outstanding loan or delinquent maintenance fees. It is difficult to determine how many surrenders requests are granted, compared to the number of surrenders requested.

There is nothing wrong with deeding back a timeshare if you have used and enjoyed the timeshare for several years. However, if you find out just days or weeks after purchase that you bought a timeshare not matching what you were promised, walking away from even $5,000 doesn’t seem right.

Before relinquishing, check with a member of the Licensed Timeshare Resale Broker Association to find out if your timeshare can be listed with one of their 64 members. http://www.licensedtimeshareresalebrokers.org/

LTRBA members charge nothing up front, so they don’t waste your time or money by listing a timeshare that, in all likelihood, will never sell.

The Second R:

refund

A refund is not easy to come by, but in cases of serious and obvious fraud; a refund can be achieved.  Inside Timeshare has heard from so many members alleging fraud, we can sometimes guess the name of the repeat offender sales agent before we are told. The fact that some of the same agents are committing the same “fraud for profit” over a period of years is telling.

The complaint process begins with a petition to the resort. Anticipate a knee jerk “you signed a contract’ reaction. Next, begins the filing of regulatory and law enforcement agency complaints. This is where our advocates are ready to assist because just figuring out online forms can be daunting. Check our complaint form for the list of appropriate agencies to contact.

Eron Grant has become our resident ARDA Code of Ethics analyst. In all likelihood, timeshare members are not even aware they are collectively giving $5 million a year to ARDA ROC. ARDA stands for American Resort Development Association and ROC Resort Owners Coalition. The money comes through “voluntary” opt-in or opts-out donations. This $3 to $10 amount, which varies depending on the resort, appears on all maintenance fee invoices purchased in the U.S. if the developer is an ARDA member.

Despite our advocates and members forwarding a volume of complaints to ARDA, questioning ARDA’s Code of Ethics, there has been no response. Inside Timeshare has learned two of the worst alleged offenders each give $1 million a year to ARDA ROC, surely a disincentive to enforcement.   

Here’s Eron’s article: Why Does ARDA Have a Code of Ethics?

red dress

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/

http://insidetimeshare.com/fridays-letter-america-14/

Litigation can take years and often the amount of money at stake doesn’t justify the time and expense litigation requires. Some developers have a class action ban, forcing arbitration. There are many critics of arbitration, including 19 Attorneys General like Minnesota AG Lori Swanson, as reported by Chris Parker.  

“The right to have your dispute resolved before a jury of your peers is as American as it gets; it’s a fundamental core American democratic principle,” says Minnesota Attorney General Lori Swanson. “To think that millions upon millions of consumers are forfeiting their fundamental right to have their day in court because of fine print in a contract….”

“Should a dispute arise, arbitration forces consumers out of the court system and into arbitration where appeals aren’t allowed, corporations historically wield a huge advantage—when not outright rigging the system—and details of misconduct are kept private,” writes Chris Parker, a reporter for City Pages

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/

Timeshare developers know the industry is virtually unregulated and that they are protected by the oral representation clause. However, as we have stated in several previous articles, according to the FBI and attorneys we spoke with, it is not legal for a company to hide behind the fine print, providing sales agents the means to say anything they can come up with to sell points.      

The most common deceit and bait and switch complaints

  • The agent said I could sell my points.
  • The agent said my points were an investment, so easily sold, at a profit.
  • I can turn in points to pay maintenance fees but no such program exists
  • The value of airline and other travel awards is zilch. A common complaint is being told you can use a credit card to offset or pay maintenance fees in their entirety, when a member would have to charge $200,000 to pay an annual $2,000 maintenance fee.
  • The interest rate is 18%. They said I could get better financing but I can’t.

The Third R

resolved

It doesn’t happen very often, but there is the possibility the member just doesn’t know how to use the booking system. Blanket statements like “You can always book online cheaper than using timeshare points” are not accurate. My husband and I are Diamond owners. We have often booked two weeks in Sedona or Orlando for less than it would cost booking online using our points.

One amusing complaint was a buyer whose complaint was that they bought a trial program, but they were promised a lifetime membership. I explained, in the case of the timeshare company they bought into, the last thing they wanted was a lifetime membership. I encouraged them to become a Secret Shopper since they were not locked into perpetual maintenance fees.

 foreclosure  Foreclosure

This is the least pleasant outcome, but foreclosure is not the end of the world. Timeshare Advocacy Group has a foreclosure support group, with members offering each other tips on how to withstand the grueling up to 180 days or more of collection calls. Calls are relentless and members have reported many violations of debt collection consumer protection laws.  

We’re working on a document for those who experience foreclosure to provide to credit rating agencies or lenders, detailing the patterns of complaints listed on Better Business Bureau reports, Attorneys General Settlements, and Assurances of Discontinuance and lawsuits. There will be a hit to your credit score of course, but if you feel you are a victim of fraudulent timeshare sales practices, provide the rating agencies or your lenders with the reason why you refused to pay off a timeshare loan or credit card. Lenders are human. Many will take this into consideration.

I asked timeshare attorney Mike Finn of the Finn Law Group some questions about the foreclosure process for an article we published previously. Mike’s answers are worth repeating. Some common questions:

Will the timeshare company try to ruin my credit for non- payment of maintenance fees loans or both?

Mike Finn: Generally no credit reporting on maintenance fees, yes they do on “mortgage” payments. Most timeshare property owner associations, which are separate non-profit entities, do not report non-payment of maintenance fees largely because they don’t maintain subscriber contracts with the credit reporting agencies. However, once referred to collection, those agencies do maintain subscriber relationships and that’s where the issue becomes relevant.

Can or will members be taken to court for non-payment of maintenance fees loans or both?

Mike: Can yes, will, maybe not so much

Do they place liens for non-payment of loans?

Mike: Yes in the sense that they do pursue foreclosures, yes for maintenance fees as well.

Do they place the lien just on the timeshare? In other words, does the lien apply just to the timeshare, or does the lien apply to a member’s primary residence as well?

Mike: The word ‘lien’ can be utilized in more than one way. In the timeshare world it typically means the security interest filed against the timeshare itself by virtue of nonpayment of maintenance fees. Only the timeshare interest itself is impacted by that kind of lien, not the owner’s property beyond the timeshare. A mortgage lien on the timeshare caused by non-payment of the initial purchase price can, under certain circumstances, become a judgment which could be satisfied by going after the defaulting party’s personal assets. This very rarely happens, but it has happened, so we can never, say never.

Is it advisable to just stop paying fees without the aid of an attorney?

Mike: It really does depend on your ability to endure collection calls, letters threats, and a foreclosure on your credit report is quite damning, it will make refinancing or new residential purchases an issue for about 5 years. Rarely will they sue for deficiency balance.

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

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

Remember, “I can’t afford it,” is not a valid reason to cancel a loan for a timeshare any more than it is a reason to be able to cancel your home mortgage loan. You can’t go to your home mortgage lender and ask them to cancel your home mortgage because, “I can’t afford it.”

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

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

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

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

Let’s keep working together to improve the industry.

fix prob

That’s it for another week, remember if you require any information about any article published or any company that contacts you, Contact Inside Timeshare and we will get the information for you.

Have a great weekend and join us again next week.

weekend cat

tues

The Tuesday Slot with Irene

Welcome to this weeks Tuesday Slot with Irene, as you will see from her article this week there is certainly a lot going on across the Great Lake. For our US readers there is some very interesting information, it would seem that Inside Timeshare is certainly making an impact on timeshare consumers in the US.

On the European front, yesterday’s article regarding Anfi members complaints regarding availability, the article had a plethora of hits and likes on the associated Facebook page within the first hour. It also seems as though this topic hit home with our US readers as there were many from across the pond.

Yesterday we also had the first court ruling of the week, the Court of First Instance in Maspalomas found against Puerto Calma, declaring the contract null and void. The client in this case will be returned 16,000€ which is the purchase price, along with 3,600€ as double the deposit paid within the mandatory cooling off period. The court also awarded legal interest.

We will be keeping an eye on any latest rulings that come in and report them here, but now on with this weeks article by Irene Parker.

Timeshare Advocacy Group™

Proposed Committees and Support Groups

Volunt

January 23, 2018

By Irene Parker

Inside Timeshare is approaching 300 timeshare reader responses, responding to members asking for assistance with their timeshare concerns since we began counting late 2016. There is a need to scale up Timeshare Advocacy Group™ as we now have 44 core advocates dedicated to improving the timeshare sales process by working together as teams. We hope timeshare developers will acknowledge there are problems and work with us, to not only stop predatory backend “get you out of your timeshare” scams, but address the problem on the front end of the sale as well. Numerous calls to the FBI have been made, and they have encouraged timeshare members who feel they have been victimized by deceit, concealment, violation of trust and bait and switch, to contact their local FBI Field Office public access line to file orally, in addition to filing online at IC3.gov.

Diamond Resorts has taken the lead by launching a Diamond Resorts Consumer Advocacy department dedicated to helping timeshare members from day one if a member has any concerns about their membership or their purchase. They have also introduced CLARITY, a program designed to enhance accountability, transparency and respect for the customer.

https://www.loyalty360.org/content-gallery/daily-news/diamond-resorts-international-raises-the-bar-on-cu

Inside Timeshare has received complaints directed against four major timeshare companies. If timeshare developers and ARDA would take the time to read the following Better Business Bureau notations of “Government Action” and “Pattern of Complaints”, it is unreasonable to keep the blinders on by claiming there are no problems with the secondary market because sales centers are forever sales centers, and members should not expect value back for their timeshare because it is a “right to use” program. That would be fine were it not for the perpetual contract, often sold by false promises made by sales agents who know there is little chance of enforcement, as there is no federal enforcement, and state Attorneys General are limited in scope.

BBB warnings for Wyndham, Diamond Resorts, Bluegreen, and Vacation Village

Wyndham

Although the government action has been resolved from 2015, we included the warning to illustrate the tenure of the complaints.

Government Action

The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

Wisconsin – May 27, 2015 Wyndham Vacation Ownership, Inc. entered into a Consent Judgment with the Wisconsin Department of Agriculture, Trade and Consumer Protection (Case No. 15CX5). The Consent Judgment to settle allegations that Wyndham engaged in the following acts or practices in the State of Wisconsin:

 

  1. Delivering a timeshare disclosure statement that fails to include all statements required by Wisconsin Statute Sec. in a format that can be immediately read and retained by the purchaser.
  2. Representing that incentives are only available to the prospective purchaser for the remainder of the day in which the incentive was offered.
  3. Misrepresenting the resale value of a timeshare.
  4. Representing a timeshare as a financial investment.
  5. Making representations which are inconsistent with the purchase contract.
  6. Misrepresenting the reasonable estimated length of a sales presentation.
  7. Failing to clearly disclose that time shares were being offered at the initial contact with a prospective purchaser.
  8. Sending mail or coupon promotions to Wisconsin consumers that fail to comply with the prize notice requirements.
  9. Failing to inform the individual of the prize that has been awarded him or her, and then giving the individual the prize or another selected item, before beginning a sales presentation.

Wyndham consented to the Stipulation and Consent Judgment to facilitate a settlement and avoid the additional expense, delay and uncertainty of litigation. Wyndham does not admit that it has violated any laws of the state of Wisconsin.

Pattern of Complaints

BBB files indicate that this business has a pattern of complaints concerning misrepresentation in selling practices. Consumer complaints report that the verbal representations are inconsistent with the written agreement. According to complaints, claims include representations that the purchase is an “investment” and the same as “real estate” in that it will increase in value. Owners report mandatory meetings that they are led to believe are to introduce new features and benefits but result in a sales presentation to purchase or upgrade their points. In some instances owners are encouraged to complete a survey or questionnaire which results in another sales presentation to purchase additional points.

This Business Is Not BBB Accredited

Trish Williams, a former Wyndham sales agent was awarded $20 million by a jury alleging predatory practices.

https://www.nytimes.com/2016/11/25/business/my-soul-feels-taller-a-whistle-blowers-20-million-vindication.html

Bluegreen has this posted on their Better Business Bureau Report

Our file contains a pattern of complaints from consumers alleging difficulties canceling vacation packages booked through Bluegreen Corporation. Consumers claim, although Bluegreen Corporation has a cancel within 30 days policy, their requests for refunds for canceled trips are denied. Other consumers feel they are victims of deceptive sales practices. Consumers claim resorts are never available when they contact Bluegreen Corporation. While yet other consumers claim the “free” vacation Bluegreen Corporation offers is not free and involve fees they were not made aware of.

Diamond Resorts:

On December 23, 2016, the Arizona Attorney General announced that the State of Arizona entered into a settlement agreement with Diamond Resorts. The Assurance of Discontinuance requires the company to pay the State of Arizona a total of $800,000, of which $650,000 is for consumer restitution and $150,000 for attorneys’ fees and costs. The assurance also includes a Relinquishment Remedy Program, which requires the company to allow qualifying consumers to return their timeshares with no further obligations.

Many of the hundreds of complaints received by the State of Arizona claim the company used deceptive sales practices and made numerous oral misrepresentations during their presentations. Some of the misrepresentations regard:

  • Annual increases in maintenance fees;
  • Membership resale and buy-back programs;
  • Timeshare membership resale market;
  • Ability to rent timeshare vacations; and
  • Discounts on other travel needs.

The Attorney General’s Office alleged that the company employees’ actions and statements violated the Arizona Consumer Fraud Act.

Vacation Village has a Better Business Bureau rating of F

BBB files contain a pattern of complaints from consumers regarding sales practices issues. Specifically, several complainants have alleged that information provided during sales presentations does not match the terms and conditions in the written contracts that they are asked to enter if they agree to make a purchase following a timeshare presentation.

On March 23, 2017 BBB sent correspondence to Village Resorts requesting their voluntary cooperation in providing steps it will implement to eliminate the pattern of customer complaints.

As of May 12, 2017 BBB has not received a response from Village Resorts BBB will continue to monitor the complaints for Village Resorts and update the review as needed

So where do we go from here?

TIMESHARE TIPPING POINT proposed plan

January 21, 2018

#timesharemetoo

Time to Take Back our Vacations

Vacation

We are grateful to our Inside Timeshare readers and timeshare members who have reported their allegations of predatory and criminal timeshare sales and marketing. Due to the volume of timeshare complaints received, there is a need for Timeshare Advocacy Groups™ to restructure, as we are experiencing normal and expected growing pains.  

Three important goals proposed by Timeshare Advocacy Group™ advocates:

  1. Reach out to sympathetic lawmakers, Attorneys General and regulators,
  2. Change timeshare developer practices to allow those alleging they were defrauded to be made whole again, by not hiding behind the fine print, but to listen and learn. The enemy is not your customer. The enemy is your predatory sales agent.
  3. Reach out to military Facebook pages and websites to warn members of the military and law enforcement, due to the alarming number of complaints from law enforcement officers and all branches of the armed forces, alleging they were white-collar crime victims.  One Marine lost his air unit command and three are worried about losing their security clearance.

Anthony and Ashley Davis recorded their predatory sales presentation, which has been provided to law enforcement and regulatory authorities. This is our January 13, 2018 interview with Anthony and Ashley.

https://www.youtube.com/watch?v=phUjnrIG3bI    

Timeshare Advocacy Group needs sub committees or teams that work independently, coordinating with a central committee. Listed below are nine proposed teams and team leaders, based on their expertise and past willingness to serve.

Please let us know if you are willing to be become involved. Those alleging they have been victimized include doctors, lawyers, professors, law enforcement, the military, even a member who worked as a contract specialist for Consolidated Edison, and many others.    

Proposed Teams

44 Core Advocates

Our Core Advocates are members or former members of Wyndham, Hyatt, Bluegreen, Diamond, Vacation Village  

Reporting: Irene (4 members)

Media/Social Media: Gay Hart-Brewer (22)

State Real Estate Divisions: (anonymous) (5)

Legislative Efforts: Anonymous (8)

Secret Shopper: (anonymous) (5)

Military outreach and awareness: Jeff Diehl (20)

Timeshare Exit Scams: Karen Krokosh (7)

Foreclosure Support Group: Anonymous (3)

California Team: Ken Sylvia (7)

Member supported U. S. Timeshare Advocacy Facebooks

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/

Advocacy team

Contact Inside Timeshare or a member of a member supported, not industry influenced, Facebook or website.

Thank you Irene and all those who helped in this article, especially the legals who ensure that they are legally accurate.

If you require any further information on this or any article published, Inside Timeshare will be pleased to help.

 

letter-from-america

Friday’s Letter from America

Here we go another Friday’s Letter from America, this week Irene Parker explains reporting a crime to the FBI, regarding timeshare complaints. To us in Europe this appears a little excessive, especially when we take the situation with timeshares purchased in Spain. But in the US, consumers do not seem to have the same protection as those in Europe.

Now for a round up of European news, once again Anfi have been ordered by the High Court in Las Palmas to return over 36,000€ plus legal fees and legal interest to an ex client. In this case the contract was again declared null and void, the main infringement of the timeshare law is once again the contract duration of over 50 years, or what is known as perpetuity. This point has been the subject of many rulings from the Supreme Court.

Still on the subject of Anfi, a Norwegian journalist and Anfi member is starting to ask questions about the accounts for Puerto, Monte and Gran Anfi. It would seem that they are owed huge amounts from Anfi Sales and Anfi Resorts.

At present Inside Timeshare is looking into this and will publish in the near future, suffice it to say, from the copy of the post received, it looks as though there is a substantial amount outstanding. This journalist also asks the question if this is the reason for the lack of maintenance and upkeep at the resort?

More on this subject as and when we get the confirmed information.

Amador Galeca, one of the “Fake” law firms which springs from the Litigious Abogados family has been active again, with Inside Timeshare receiving many enquiries as to if these are genuine.

Once again, these firms are not genuine law firms, they have in place a very elaborate fraud, designed to fool owners into believing they have cases at court. Search Litigious Abogados in the search box, there you will find the story going back around two years.

The unfortunate aspect of this is the frequency with which they change the names of the law firms and the websites. This makes it very difficult for the authorities to keep up on their investigations. The one thing that does help, is the fact the websites are all the same except for the names.

In the end, it is up to you to check if they are genuine before paying these companies, it is no use after you have made the bank transfer, that money is long gone. This is the reason for creating the urgency, with stories such as the director is pleading guilty and the trial is in 3 weeks, so you need to hurry if you want to be part of this claim!

Now on with this week’s Letter from America.

How to Report a Crime to the FBI

graph

By Irene Parker

January 19, 2018

There has been a change in strategy in reporting to the FBI if timeshare members feel they meet the definition of white-collar crime, financial institution fraud defined as “deceit, concealment, violation of trust, bait and switch.”

I’m still recovering from the comment Anthony Davis posted January 11 in response to one of my articles. Anthony wrote that he recorded a timeshare sales presentation. Anthony is an army vet, 90% disabled after serving three tours in Iraq and Afghanistan. Coincidentally, someone who works in law enforcement contacted me just after I spoke with Anthony, informing us they wanted to donate a GoPro Hero 5 Session camera. My husband and I picked up the camera and drove to Orlando to meet Anthony and Ashley. They came to Orlando because they said they were required to attend a mandatory timeshare presentation scheduled for January 13th. This was their second required new member orientation and they had to bear the air and Uber expense to travel from Tennessee to Florida for two days, just to attend the orientation. Armed with our new GoPro, we recorded an interview with Anthony and Ashley. We also recorded the recording of the orientation.

https://www.youtube.com/watch?v=phUjnrIG3bI

The next morning, alarmed at what I had heard on the recording, I contacted the FBI. It took a while to explain the significance of this recording, because the FBI is not as familiar with timeshare as they are with say, terrorism, but the agent took the time to understand. At the end of our conversation agent #2222 (I did not ask permission to use his real number) concluded timeshare members need to call their local FBI field office and report orally through the FBI public access line, selecting option #4, white-collar crime. I thought he was going to dismiss me by sending members to the Attorneys General Offices! Here are the FBI field offices:

https://www.fbi.gov/contact-us/field-offices

Previously, FBI agents had advised me to direct members to the IC3.gov portal. This is the FBI’s online complaint site. Filing at IC3.gov is similar to filing an online AG complaint. Timeshare members who feel they have been a victim of deceit and bait and switch should still file with IC3.gov, in addition to filing orally with your local FBI field office. Here’s the IC3.gov link:

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

From the FBI website (my comments are in italics)

Mortgage fraud is a subcategory of Financial Institution Fraud. It is crime characterized by some type of material misstatement, misrepresentation, or omission in relation to a mortgage loan which is then relied upon by a lender. A lie that influences a bank’s decision—about whether, for example, to approve a loan, accept a reduced payoff amount, or agree to certain repayment terms—is mortgage fraud.

Inside Timeshare US has received 278 timeshare complaints from readers. Of the 278 complaints, 263 allege that what happened to them meets the definition of white collar crime, “deceit, concealment, violation of trust, bait and switch.” Several timeshare members have reported timeshare sales agents advised them to falsify information, or the agent on their own falsified information, discovered when the member compares what they signed at the time of purchase to the document the timeshare company provides to the member after they asked for a document when pursuing a complaint.

The FBI and other entities charged with investigating mortgage fraud, particularly in the wake of the housing market collapse, have broadened the definition to include frauds targeting distressed homeowners.

This includes distressed timeshare members as a timeshare loan is considered a mortgage and is reported as a foreclosure, the same as a home mortgage foreclosure. However, timeshare attorney Mike Finn of the Finn Law Group did sue Bluegreen and managed to get foreclosed knocked down to “charged off” on behalf of 11,000 Bluegreen members and, going forward, Bluegreen no longer reports their timeshare point “take backs” as a foreclosure. Foreclosure is the most damaging hit to a credit report, and according to Mike, timeshare companies tend to pick the most damaging category to report.  

There are two distinct areas of mortgage fraud—fraud for profit and fraud for housing.

  • 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.

Timeshare member can relate to this definition! We have compiled three repeat offender summary reports. One of the reports describes highest loyalty members being up-sold to buy more points because they will be able to pay maintenance fees or sell points when no such program exists.

The FBI seeks to maximize its impact on the mortgage fraud and financial institution fraud as a whole through collaboration.

For example, the Bureau operates Financial Crimes Task Forces within several field offices throughout the country that act as force multipliers in addressing large scale financial fraud schemes. Comprised of federal, state, and local regulatory and law enforcement agencies who work together on a daily basis, these tasks forces have been an effective way to merge valuable resources of participating agencies.

By leveraging the skills, knowledge, and resources of various government agencies and private industry, the FBI and its partners are able to bring more perpetrators of fraud to justice.    

Common Mortgage Fraud Schemes (I selected those pertinent to timeshare)

  • Foreclosure rescue schemes: The perpetrators identify homeowners who are in foreclosure or at risk of defaulting on their mortgage loan and then mislead them into believing they can save their homes by transferring the deed or putting the property in the name of an investor. The perpetrators profit by selling the property to an investor or straw borrower, creating equity using a fraudulent appraisal, and stealing the seller proceeds or fees paid by the homeowners. The homeowners are sometimes told they can pay rent for at least a year and repurchase the property once their credit has been reestablished. However, the perpetrators fail to make the mortgage payments and usually the property goes into foreclosure.

The DOJ places timeshare exit scams complaints second only to debt collection complaints. Timeshare exit scams flourish when timeshare companies do not allow a secondary market. This is a 13 page DOJ report on timeshare exit scams:

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

One new timeshare term I learned is “Viking Ship” comparing fraudulent timeshare transfers to the term used to describe how Vikings put their dead on a ship, set fire to it, and shipped it out to sea.

http://insidetimeshare.com/timeshare-hoa-collections-agent-shares-experience/

Loan modification schemes: Similar to foreclosure rescue scams, these schemes involve perpetrators purporting to assist homeowners who are delinquent in their mortgage payments and are on the verge of losing their home by offering to renegotiate the terms of the homeowners’ loan with the lender. The scammers, however, demand large fees up front and often negotiate unfavorable terms for the clients, or do not negotiate at all. Usually, the homeowners ultimately lose their homes.

Foreclosure is a guarantee, but you certainly don’t need to pay anyone to help you foreclose. These scams say foreclosure meets their promise of a guarantee!

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

Law rights

Thank you to our FBI field offices for even listening to us as no one else is. We appreciate the efforts of Attorneys General but they are limited in their scope. Federal enforcement is needed.

If you need help with a timeshare concern, contact Inside Timeshare or contact one of these U.S. advocacy groups we endorse, feeling they are truly member supported, not influenced by industry.

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/

There we have it, timeshare consumers in the US now have another way of fighting back, things across the Great Lake are a little more complicated for timeshare consumers than in Europe.

If you have any questions or comments about this or any other article published, contact Inside Timeshare, we will help you get the best advice possible.

Have a good weekend.

weekend cat

complaints penguin

How to File a Timeshare Complaint: Revised

How to File a Timeshare Complaint

Revised December 15, 2017

Start with the FBI if a victim of a “bait and switch”

fbilogo

By Irene Parker

Inside Timeshare has received 238 US timeshare complaints (135 since our last complaint form revision 9/17). An escalation in the criminal nature of allegations, especially, voiced by nine active duty and retired military, led us to the FBI. If your timeshare experience has met the FBI’s definition of white collar crime, financial institution fraud, the FBI’s appropriate guidelines are described below. I followed their recommendations after speaking with two FBI intake workers and two FBI agents over the past year. According to the FBI website,

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).

http://insidetimeshare.com/timeshare-advocacy/

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

Mortgage fraud (which is the option timeshare buyers fall under) 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.

“The 3Rs or F of Timeshare” allowing the beleaguered timeshare member to put a bad decision in the rear view mirror are:

  • Resolution
  • Relinquishment
  • Refund
  • Foreclosure

http://insidetimeshare.com/part-ii-three-rs-timeshare/

The most common complaint:

  • The agent said I could sell my points

The backend of timeshare fraud has been widely reported, but there has been little attention paid to the front end. This US Department of Justice timeshare scam report details the extent of the fraudulent resale industry. Many of our Advocates feel the front of the timeshare sale contains a comparable level of criminal activity, based on 223 of our 238 complainants alleging they were victimized in a way that meets the FBI definition of financial institution fraud.  

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

How to File a Timeshare Complaint

Name (s) and age of member

Phone Number

State of Residence

Member Number

For each contract or for the contract in dispute:

Where Purchased and Date of Purchase

Sales Agent and Sales Agent ID# (if available)

Purchase Price

Amount Financed and Interest Rate

Current Loan Balance

Loan Number

Current Maintenance Fees

Name of Credit Card (if one was used)

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

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

If your investment is $40,000 or less and you owned and used your timeshare for ten years or more consider relinquishment.

Complaints expressing dissatisfaction with general availability will go unheeded, as will a request based on not being able to afford the timeshare. The FBI complaint should be filed only if there are credible allegations of deceit and bait and switch.

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.

The most common allegation is bait and switch. If you feel you were deceived, list the reasons why.

How Advocacy Works

Email Inside Timeshare your complaint if you would like to talk with someone about your concerns. Before you begin, raise your right hand. Do you promise to tell the truth, the whole truth, and nothing but the truth, so help you God? It is important to present your information factually and without opinion or inflammatory language.

Consider becoming a volunteer report writer if you have reporting experience.

If you have questions about this form, email Irene Parker

ireneparker377@gmail.com

Cell – 270-303-7572 EST Feel free to call any day of the week from 1:00 to 5:00 PM EST or email to schedule a call. All calls and emails are returned within 24/48 hours. If you do not receive a response to your email, please call.   

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 listed below. We have also developed media relationships and will continue to work with broadcast and print media to alert the general public as to what questions to ask before buying a timeshare. Life events, such as a hurricane, can change your life in an instant or a day. If your timeshare provides no secondary market, it can make a member feel hostage to their vacation plan. Contact a member of the Licensed Timeshare Resale Broker Association to find out whether your timeshare has a secondary market.

http://www.licensedtimeshareresalebrokers.org/

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 or inform you, “If something was important to you, you should have asked for it to be put in the contract.”  They may conduct an investigation and report back that the sales agent(s) denied your claims. File a rebuttal if you disagree.

Depending on the nature of your complaint, especially complaints directed against an agent with multiple complaints on file, an Advocate may file your complaint on your behalf with the firm’s public relations office and ARDA, the timeshare lobby, for violating ARDA’s Code of Ethics. ARDA’s Code of Ethics can be found on ARDA’s website. We do not recommend owners make the voluntary opt in or opt out ARDA ROC contribution on your maintenance fee invoice for ARDA ROC (Resort Owners Coalition). ARDA is basically a PAC that lobbies for the industry when the issue is one that is at odds with members. We will also inform NTOA (National Timeshare Owners Association) and the bank that financed your loan or issued a credit card through the Consumer Protection Bureau online complaint form. By having the Advocate file on your behalf, we can track complaints, documenting patterns of criminal behavior.

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. It may take up to 30 days to hear back from the resort. If you feel you were a victim of deceit and bait and switch, give the resort a week to respond before filing regulatory complaints.

The member will report back to us with a positive or negative outcome. Due to the required non-disclosure or mutual release form, terms and conditions will not be discussed. Just report a positive outcome or resolution.

Once the resort denies your claim begin filing complaints with regulatory and law enforcement agencies beginning with the FBI if you feel you meet the definition of white-collar crime. There are three ways to report to the FBI. We recommend calling the nearest field office after filing with IC3.gov. Filing online will help you organize your thoughts.

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

You can find the nearest field office from this website.

https://www.fbi.gov/contact-us/field-offices

The FBI assigns Financial Institution Fraud the highest priority.

The next step is to file a complaint with the Attorneys General of the state where you signed your contract, where you live and where your resort is domiciled. It can take a month or more 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.

If there was an unauthorized credit card charge or you feel you were deceived into signing off on a loan, you should file with the Consumer Financial Protection Bureau under the mortgage option (even if no mortgage) and select the bank that financed your loan or issued a credit card. One common complaint is that the buyer was told they could get a lower interest rate from a bank or credit union. File with the CFPB only if there is a loan outstanding or a credit card was used.

https://www.consumerfinance.gov/

You should file a complaint with the state Real Estate Division in the state where the agent is licensed if your complaint is against a sales agent. The Advocate can help you if you don’t know the agent ID number. Timeshare sales agents are real estate licensed in most states.

File with the Better Business Bureau, although the company’s BBB rating can be misleading in that the BBB only rates how efficiently a company responds to complaints.

Most importantly, 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 pitfalls before engaging in a timeshare sales presentation.

Our “Chicken Soup for Timeshare’s Soul” Inside Timeshare article is linked at the end of this article explaining what to expect or not expect when you file with a regulatory or law enforcement agency.

Summary of Regulatory and Law Enforcement Agencies

  • The FBI at IC3.gov portal, if you feel you were deceived by a bait and switch, and then contact your nearest FBI field office to file an oral tip.
  • Attorneys General where you signed, where you live and where the resort is domiciled. 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. “Right-to- use” membership programs are not defined as real estate, but the agent is typically a licensed real estate agent.
  • ARDA if you feel ARDA’s code of ethics has been violated.
  • The media – the court of public opinion is often the only court available. Inside Timeshare, published in Spain, publishes timeshare articles online focusing primarily on the need for reform and oversight.
  • The Consumer Financial Protection Bureau under the mortgage option, selecting the bank that issued the travel credit card or financed your loan.
  • The Federal Trade Commission – due to lack of secondary market
  • The Better Business Bureau
  • 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 a lot of work, it is, but you can file with some, all, or none of the agencies. We feel “Action and Advocacy” is the way to change questionable timeshare business practices. Change requires volumes of complaints.

What to expect from regulatory agencies

http://insidetimeshare.com/chicken-soup-timeshares-soul/

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 to Inside Timeshare.

Who We Are and Why We Do This

The timeshare industry is wealthy and powerful, able to influence politicians and Attorneys General. Timeshare owners typically are struggling with maintenance fees, unorganized and alone. Venting on complaint sites has no effect whatsoever.

There are a number of timeshare members and non-timeshare member advocates working behind the scenes to assist in the complaint process. If all else fails, we will refer 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.

After retiring from Edward Jones working as an Investment Representative, I worked three years as a CASA supervisor, writing and editing court reports for Family Court on behalf of foster children. I find two commonalities between children of abuse, neglect or dependency, and deceptive timeshare sales.

  1. The abnormal becomes the normal. After hearing 238 complaints, we fear deception is endorsed and encouraged by some timeshare companies. I have interviewed twelve current and former timeshare sales agents and managers. I’m told making false claims is called “pitching heat” or “No Heat, No Eat”. Of course not all sales agents are dishonest. We hear primarily from buyers seeking assistance when victimized by unscrupulous agents. Inside Timeshare endorses Disney because of their scarcity of complaints.
  2. Victims are silenced and isolated via non-disclosure agreements and arbitration. Encourage those considering the purchase of a timeshare to opt out of arbitration. This must be done normally within thirty days of signing the contract. Non-disclosure is appropriate in the case of a settlement, but when a family receives nothing after an alleged bait and switch, after spending $5,000 to $500,000 or more on a vacation plan, not allowing the victim to say anything disparaging about the company seems harsh. We receive many calls about this clause.  

There are many who use and enjoy their timeshare. My husband and I owned three timeshares for 25 years with no problems or complaints. After we attended a pathetically aggressive sales presentation in 2015, I began researching the industry, writing articles and assisting timeshare victims. I am not compensated by anyone. Our Advocacy group is composed of volunteers. We hope there will come a day our Advocacy Group is not needed.

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/

get involved

December 15, 2017 Irene Parker Timeshare Advocacy Group™

 

capone

The Tuesday Slot with Irene Parker: Marriott Vacation Club Racketeering Lawsuit

Welcome to the Tuesday Slot, in this article Irene Parker looks at the Marriott Vacation Club and the law suit for racketeering.

First some recent news fro the Supreme Court in Madrid which came in this morning, this is the 73rd ruling by Spain’s Highest Court.

Another Silverpoint contract has been declared null and void with the British clients set to receive over £37,000 plus legal fees and interest.

No details are yet available, but as with other cases the main infringement is likely to be a contract over 50 years. The one important factor is that these contract contravene the Spanish Timeshare law 42/98.

Now for Irene’s article.

marrioot symbol

The Marriott Vacation Club Racketeering Lawsuit – an Update

Timeshare Wars – Members vs Developers and ARDA Part II

evolution

November 28, 2017

By Irene Parker

Part I – The Manhattan Club and the possible dismantling of the Consumer Financial Protection Bureau

http://insidetimeshare.com/tuesday-slot-irene-parker/

Part I describes how New York Attorney General Eric Schneiderman achieved a $6.5 million settlement for The Manhattan Club timeshare members after a battle that lasted almost three years. ARDA, the American Resort Development Association, seemed to be on the side of the TMC developers. In today’s article we look at ARDA’s involvement in the Marriott Racketeering lawsuit filed May 2016. Timeshare members should research ARDA ROC before making their voluntary donation which appears as an “opt in” or “opt out” donation on their maintenance fee invoice.

In the Marriott racketeering lawsuit, attorneys for the plaintiffs, Anthony and Beth Lennen, challenged Marriott’s points based system. Once again ARDA’s lobbyists are at the forefront.

“This was bigger than a lawsuit,” Hunter says. A negative ruling “could have a consequence of being devastating, conceivably, to the industry.” Florida Trend

I can imagine slave traders and slave owners making the same argument ARDA lobbyist Gary Hunter makes in opposition to the challenge to the points based timeshare product.The legal structure of the points based timeshare product is complex. It seems the points based programs are not products that should be associated with real estate. It would be as if a country club charged me closing costs for joining their right to use program. Bluegreen seems to employ a similar model. As usual, I asked timeshare attorney Mike Finn of the Finn Law Group if he agrees with me.

“Several developers are using a similar trust based hybrid product like Marriott’s. I think Bluegreen may have initiated it originally, but don’t hold me to that. Yes, the products are very similar. I felt Bluegreen was intentionally hurting their defaulted owners with their credit reporting as ‘foreclosures’, when I knew this was incorrect for the same reason as the allegations in the Marriott lawsuit, namely that the interest the ‘owner’ ends up with is personalty, not real estate. You cannot accurately call a personalty repossession a ‘foreclosure’ as there’s no legal procedure to ‘foreclose’ on personalty, according to UCC codes. My efforts to get Bluegreen to change were ignored; hence our litigation which resulted in at least 11,000 individuals getting foreclosures redacted from their credit reports. However, in our preparation, at the last minute, we researched the Florida timeshare act and realized Florida had anticipated our move! The statute was modified to define the Bluegreen timeshare plan as “real estate”. It was like legislating a duck into a goose,” Mike explained

https://www.finnlawgroup.com/learning-center/timeshare-vs-vacation-home

Is timeshare deemed real estate when it comes to charging buyers fees associated with actual real estate, but not real estate in matters having any control over the property? Is this a case of having your cake and eating it too?

I asked timeshare member and economics professor Michael Nuwer to review the amended Marriott lawsuit complaint filed October 25, 2017 by the plaintiffs’ law firm, Newman Ferrara LLP. The complaint suggests suspicious legislative maneuvering intended to circumvent the lawsuit. The amended complaint addresses the Marriott-forced law changes in 2013 and 2017. The recent (2017) amendment to the Florida Timeshare Act purports to exclude pre-existing weekly owners as “interest holders” and pre-existing Condo Declarations as “encumbrances” with regard to sales of multisite timeshare plans that use pre-existing timeshare estates. According to the complaint,

“It allows massive profit-making – including administrative fees, closing costs, recording fees, transfer taxes, maintenance, assessments, and title insurance premiums.” Amended Marriott complaint 6:16-cv-00855-CEM-TBS

“As far as I know, none of the trust fund based timeshare systems “convey real property interest,” said Michael. “Ownership is a “beneficial interest” in the trust fund, although a recent ruling in Canada found the Diamond Resort Embarc members don’t even have that.”

http://insidetimeshare.com/fridays-letter-canada/

“If Florida law requires a real property conveyance, then I think there could be a problem,” Michael added.

Michael Kosor, a Wyndham owner and timeshare advocate, circulated a similar argument at the last two Nevada legislative sessions, proposing greater disclosure, but again ARDA’s lawyers fought against the members. The legislation proposed would have allowed better disclosure as to the lack of or limited secondary market and the fact that timeshare today has nothing to do with real estate. Timeshare agents typically inform buyers during their presentations that they are real estate agents, further enhancing a false security that the buyer is protected by real estate rules and regulations.  Even the name reflects the change. Fixed week timeshare buyers were “owners”. Points based buyers are “members.”

I have been researching timeshare since attending an astonishingly deceptive sales presentation July 2015. Like peeling an onion, I discovered at timeshare’s core, the points based system provides a recipe for deceit. As the Lennen complaint describes, point programs began in 2008 when timeshare developers did not know what to do with aging, foreclosed or repurchased inventory.

Inside Timeshare has received 216 US timeshare complaints from our readers, the majority concerning points. Not one of the 216 members understood, at the time of purchase, the difficulty selling their timeshare. Of the 216 complaints, 201 allege deceit and bait and switch on the front end of the sale. Of the 216 complaints, only two came from a Marriott member. It saddens me to see Marriott singled out when the entire industry may be guilty of selling a product that is more smoke and mirrors than reality.

The Marriott racketeering lawsuit was first reported by Paul Brinkmann May 2016 at the Orlando Sentinel

Case No. 6:16-cv-855-Orl-41TBS

According to the suit, Marriott (NYSE: VAC) timeshare customers pay fees associated with owning real estate — such as closing costs and recording fees — but don’t actually own any real estate. Despite not actually being real estate owners, the lawsuit says, buyers are still paying closing costs, recording fees, title policy premiums and real estate taxes.

Marriott has argued, in its motion to dismiss the case, that “plaintiffs have misread the statutes that they assert have been violated” and “the allegations are without merit and the MVC Plan fully complies with applicable law.”

http://www.orlandosentinel.com/business/brinkmann-on-business/os-marriott-timeshare-rico-20160524-story.html

Except it seemingly did not fully comply with applicable law, so ARDA lobbyists and industry executives forged ahead to initiate legislative changes that would change the definition of “beneficial interest” so that Marriott would comply.

http://www.orlandosentinel.com/business/brinkmann-on-business/os-comptroller-marriott-rico-20170113-story.html

The following excerpts are from a November 23, 2017 Florida Trend article. The full article is linked below. In bold is my emphasis.

“Engineering the Law” Politico

However, Marriott began fighting the suit on another front. The company turned to the Florida Legislature, acting through the American Resort Development Association, the trade group that represents the timeshare industry. At the time, ARDA’s chairman was Steve Weisz, Marriott Vacations’ president and CEO.

In both provisions, the lobbyist, Gary Hunter, of Hopping, Green & Sams in Tallahassee, included extra sentences saying the changes were meant as “a clarification of existing law” — an effort to ensure Marriott could use them as a retroactive defense in the Lennen lawsuit.

ARDA sent more than talking points and issue briefs. A few days after Hunter sent in the additions to the bill, the organization gave $25,000 to the Republican Party of Florida and another $25,000 to a committee controlled by Senate Republican leaders. In April — on the same day that both the House and Senate scheduled the legislation for floor votes — ARDA gave another $10,000 to the state Republican Party. (ARDA, which represents a heavily regulated industry and works on legislation every year, is a reliable source of money for the state GOP, which controls all levers of state government. The organization gives more than $100,000 to the party and its affiliates every year.)

The legislation passed both chambers in late April, and Gov. Rick Scott signed it into law a month later. After the legislation passed, ARDA gave another $50,000 to the fund controlled by Republican Senate leaders.

Two weeks to the day after the bill became law, Marriott went back in court in Orlando, alerting Judge Mendoza to the new Florida law whose provisions “go to the very heart” of the case. “These clarifications of existing law … decimate much of the complaint,” Marriott’s attorneys wrote.

A spokesman for Marriott declined to comment on either the lawsuit or the legislation. But Hunter, the lobbyist for the American Resort Development Association who worked the bill, says the goal of the legislation isn’t just to help Marriott defend itself. It is, he says, meant to protect the entire timeshare industry from similar attacks in the future, should a judge, who is unlikely to be familiar with the history and intricacies of timeshare law, interpret state statutes in a way that no one in the industry ever intended.

http://www.floridatrend.com/article/23307/engineering-the-law-marriotts-class-action-timeshare-battle

Florida Republican Representative Mike La Rosa, Oceola County was one of the lawmakers behind the amendment along with Republican Senator Travis Hutson, St. Johns County. Representative La Rosa is a member of ALEC. Senator Nan Orrock of Georgia has described ALEC as a “corporate bill mill.”

https://www.alec.org/person/mike-la-rosa/

After the legislative amendment was made, Mr. Brinkmann at the Orlando Sentinel once again picked up the thread:

A third-party observer, Ben Wilcox of the nonprofit government watchdog group Integrity Florida, said the timeshare law changes are suspect.

“It has the appearance of unethical influence, the appearance anyway,” Wilcox said. “The question would be, does it represent misuse of office or conflict of interest? Is it meant only to benefit those corporations and change the rules of the game?”

http://www.orlandosentinel.com/business/brinkmann-on-business/os-marriott-timeshare-legislation-20170719-story.html

Legal Dept
It’s not unusual for Florida to spearhead legislation that ultimately gets rolled out nationwide. Like the 2017 Florida amendment, in 2015 Florida passed a bill that alarmed advocacy groups. Advocacy groups felt the 2015 bill made it more difficult to be released from timeshare contracts. This new amended 2017 bill is also expected to be rolled out nationwide. ARDA lobbyist Gary Hunter is instructing Senator Hutson to remove language from the proposed 2017 Amendment that provided that the law applied only to Florida properties. He called the language “non-substantive” clearly intending to broaden the reach of the amendment to cover properties from single-site timeshare plans outside of Florida (which make up the bulk of MVC Trust properties).

Timeshare, in my opinion, is virtually an unregulated industry. There is no federal enforcement, and some Attorneys General may be influenced by lobby dollars. Florida is a timeshare Mecca with billions of tourist dollars flowing into the state. As mentioned in Part I, the Florida Timeshare Division only acted on 110 out of 2,360 timeshare complaints from April 2012 to April 2014.   

https://www.nytimes.com/2014/10/29/us/lobbyists-bearing-gifts-pursue-attorneys-general.html

How will it end? I fear big money will get its way at the expense of middle class timeshare buyers, even it means labeling a duck a goose.

Marriott Inside Timeshare July 2017

http://insidetimeshare.com/starting-the-week/

Contact Inside Timeshare or a member sponsored self-help group if you have a timeshare concern or a story to share.

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

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

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

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

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

Thank you Irene and all who helped with this article, especially Mike Finn of Finn Law Group for his legal views, this will certainly be of interest not just to those across the Great Lake, but also those owners in Europe.

If you have any questions or comments on this article or any other timeshare matter, please contact Inside Timeshare and we will do our best to help.

 

letter-from-america

Friday’s Letter from America

It’s that time of the week again, so welcome to this week’s Friday’s Letter from America, this week we publish Part II of Timeshare Debt and Hedge Funds. This article is from Justin Morgan and Michael Nuwer, with the introduction from our very own Irene Parker. But as usual a roundup from Europe.

It has been a very busy week in the courts again with many case being heard, with sentence still to be issued by the judge but there have been a few announced.

gavela

On Monday there were two announcements, the first was the judge of the Court of First Instance in Maspalomas found against Anfi, once again the contract was declared null and void, the client in this case will be returned over 12,000€ plus legal interest. The courts are certainly sticking to the letter of the law.

In the second case that was announced, the Court of First Instance in Tenerife found against Silverpoint (Resort Properties). In this case the judge found that the contract was in breach of the timeshare law 42/98 in that it exceeded the 50 years that is allowed, this should have also been explained to the customer before signing.

The judge declared the contract null and void, ordering Silverpoint to pay the client over £59,000 plus legal interest.

The following day, Tuesday, another sentence against Anfi was announced by the Judge of the Court of First Instance in Maspalomas. Another contract was declared null and void, with Anfi being ordered to return over 26,000€ plus legal interest.

Back in September Petchey Leisure (now MGM Muthu) was ordered to repay over 16,000€ and declared the contract null and void, by the High Court in Tenerife. The client in that case has now had the money transferred to their bank account.

On Thursday, there were three court sentences announced, Once again Anfi have been ordered to return over 20.000€ plus legal interest, this was by the Court of First Instance in Maspalomas. The judge also declared the contract null and void.

In Tenerife the Court of First Instance declared a Silverpoint contract null and void, ordering the return of over 30,000€ plus legal interest.

In the High Court in Tenerife, Regency Resorts was ordered to return £35,200 plus an extra £35,200 as double the deposit taken in the cooling off period, which is forbidden by law. This particular client will now be receiving £70,400 plus legal fees and legal interest. A nice Christmas present for this client!

Today as we this article was being prepared for publishing the following news was issued in a press release:

The Supreme Court in Madrid issued another damning sentence against Silverpoint, the Court ordered the return of the full purchase price plus double the deposit and all legal fees. The contract was also declared null and void. In this case the client will be receiving over £105,000.

All these cases have been brought on behalf of clients by the Arguineguin law firm Canarian Legal Alliance, who are certainly at the forefront in the field of timeshare law.

cla-brochure

Inside Timeshare is still receiving many enquiries regarding “claims” companies and “law firms” contacting owners with the promise that they have cases and can get their money back. Many of these readers don’t even own in Spain, or even upgraded in Spain since the law came into place in 1999, so how can these cases go to the Spanish Courts?

Some of these are also being told that they pay for a relinquishment, then the claim will be filed on a no win no fee basis. This can only mean one thing, an attempt to claim under Section 75 of the Credit Consumer Act 1974. Another aspect to this is the client will also be told at the meeting the only way they can do this is by purchasing another product! Sounds like the classic “bait and switch”!

There is also more news which at present we cannot publish as it has not been verified, so that is it from Europe, now on with our Letter from America.

Timeshare Debt and Hedge Funds – The Developer vs the Member

wall st

By Justin Morgan and Michael Nuwer

November 17, 2017

On Monday Inside Timeshare published an article comparing hedge fund involvement in Puerto Rico to hedge fund involvement in timeshare. Today we examine further how debt affects timeshare with help from Economics Professor Michael Nuwer and private equity investor Justin Morgan.

http://insidetimeshare.com/tuesday-slot-american-perspective-comparison/

Introduction by Irene Parker

As a Diamond Resorts member, I have access to information I would not have about other timeshare companies, so once again Diamond is used as an example with help from Michael Nuwer, also a DRI member, and Justin Morgan, a former DRI member, to explain the mechanics of timeshare inventory valuation and timeshare debt.

I asked Inside Timeshare Australian Contributor Justin Morgan how a company like Diamond can have a $2.2 billion dollar valuation when the entire inventory of points is worthless to the members, given so many complaints about the lack of a secondary market. Of course, there is value to staying at a property, but for discussion purposes, timeshares are a liability on an individual member’s net worth statement. Inside Timeshare has received 196 timeshare complaints from our readers against four major developers. The majority allege they were sold or upsold by deceit and bait and switch. I have interviewed many families devastated, sometimes just weeks after purchase.

In an article I wrote for TheStreet, I expressed concern over inventory valuation irregularities that delayed DRI’s second quarter 2016 earnings report, the last public report before being taken private. Diamond previously reported 11 quarters of consecutive robust earnings growth. After announcing the delay, just after the Apollo acquisition announcement, earnings had to be restated from 2014 going forward.

“After the correction, the change resulted in a decrease in net income of $5.6 million for 2015 and a $1.3 million decrease for the first quarter, in each case from amounts originally reported, according to the second-quarter release. Significantly, second-quarter net income decreased $10.1 million or 28.5% to $25.5 million year over year, compared with a first quarter increase of $8.4% or 32.6% to $34.4 million, prior to the restatement.”

https://www.thestreet.com/story/13702895/1/diamond-resorts-international-s-second-quarter-earnings-reversal-is-worrisome.html

Justin Morgan’s analysis

The whole industry itself uses some quite questionable inventory valuation methods that may be designed, according to some, to target more the financing arrangements that were the traditional model in the industry when GMAC and others were underwriting timeshare sales departments. This is why private hedge fund equity in the industry has somewhat caused a shift in thinking. If private equity is funding the model based upon equity vs loan models, the capital structures underneath begin to change. The same accounting reports will still be drawn upon to make sense of the numbers, but let’s not forget that inventory valuations do have a bit of leeway to move. Even financial reporting itself can diverge from standard reporting models, but it usually is flagged as a change in accounting methodology that would have otherwise tipped off Apollo.

Like Enron, it depends upon who’s looking, and who might be wanting to look away to get a deal done. Even if Apollo did know, it doesn’t mean they’d fess to the knowledge of spotting an irregularity if they believed they were able to profit in the end, and I believe that Michael Nuwer showed the sort of cap structure that Apollo introduced. It largely turned the debt into the membership, so whilst Apollo may have even noticed non-standard valuations, it might have only forced a better price to come from Diamond vs flagging the issue or walking away from the overall deal. Clearly, Apollo are their own beast in these type of private equity deals which reap profits and shift debt restructuring unwittingly into club members. This is a bigger issue. It’s like taking a loan out in someone else’s name and handing them the bill after you’ve taken what you want for the deal. Club members were only ever at Apollo-DRI’s mercy after this.

There are definitely some important and significant value-implied shifts from these numbers since the street uses earnings to make their valuations, but the valuation of inventory is an area that is somewhat suitable itself. The industry bodies know how to make it work and actually fought to use non-standard inventory models. But I’ve not gauged for differences between the pre-order hedge fund industry and the one we’re seeing rise out of the seas today.

I have looked with horror upon the entry of these private hedge funds because I know that they have little interest in the product itself. They are only in it to devour the membership of as much as they can get, and given the legal models, that could be the scariest evolution to date. At least cryptocurrencies attempt to establish some monetary supply rules, but timeshare clubs know that they can just keep raising budgets legally to cover their required rates of returns.

In an industry that generally looks for 30% per annum returns as a rule of thumb, that’s going to cause some high maintenance fee jokes in the future. But I remember the old DRI hiking maintenance close to 25% circa 2007 and then again in 2009. They first blamed a strong economy, whilst the second blamed the weak economy. More like a satyr blowing hot and cold in the one breath! But the disturbing thing to me is how Apollo financed this whole arrangement. They shifted the debt onto the members. They made their money from the start…The rest is just cream…The debt which now pays the Apollonian entities is the debt Apollo created and lumped into the membership at the financing stage.

We must be clear. They created the debt specifically to land it on membership; so really, it is as if the DRI members paid a good chunk of the deal. If the Attorneys General don’t see this, then they’ll miss what chicanery has been done here.

Michael Nuwer

Diamond reports show increasing levels of bad debt accompanied by decreasing membership since the peak in 2013.

chart1

Membership is down 9% since 2013

chart2

One thing that is not clear to me is the economic value of points. It often appears that a developer sells the points (say 10,000 points) for, say, $20,000. But, the next day, if I (the owner) try to sell those points in the secondary market, they are worth, maybe, $1,000. (If Bluegreen points; DRI points are worth $0.) The economist in me thinks the developer originally sold me points for $1,000 plus a club membership for the remaining $19,000. Thus, if my points are foreclosed and resold for the full $20,000, only $1,000 is the value of the points.

So, the question here is: what is the developer selling. Is the sale just vacation points or is the sale a bundle that includes points plus other stuff? I’ve read my DRI contract many times and still can’t tell what it specifically covers.

So what happens when someone buys timeshare points?

Let’s look at this example:

Say Diamond makes a sale for $30,000. The buyer might make a down payment of 20% or $6,000. The remaining $24,000 is a loan. Diamond now has a short term financing problem. They have $6,000 in cash and $24,000 in a non-liquid asset. But Diamond has immediate operating costs. A bit more than $15,000 from the sale is needed for advertising, marketing, and commission expenses. The carrying cost of the inventory must also be paid. Additionally, Diamond faces G&A costs (general and administrative) which need to be paid. All of these are current expenses, but Diamond only has the cash down-payments to cover them.

To pay current expenses, Diamond borrows money from a bank (the jargon is a “warehouse facility”). This facility is a credit line agreement, and, just like my credit card, Diamond’s credit line has a limit. Before Apollo, Diamond’s credit line was $100 million with Capital One.

In short: Diamond must borrow money from a bank to cover the current year’s expenses while it waits 7-10 years to get re-paid on the outstanding loans made to members.

Securitization of the outstanding loans is a way to oil, and thereby speed-up, the lending machine. Once Diamond reaches its $100 million credit limit, it will not be able to offer more loans for the purchase of points. Thus, to overcome this limit, the company bundles outstanding loans into a trust fund and sells shares in that fund as an Asset-Backed Security. The proceeds from selling these shares are used to pay down the credit line and Diamond’s perpetual loan machine continues.

Irene asked how Apollo Global Management will fare in their purchase of DRI. Will the restatement of inventory valuation have an impact?

DRI EBITDA in 2015 was $385 million and thus the valuation multiple ($2200/385) is a mere 5.7. Apollo got the company for a steal. If they can spruce it up and get 10x, the valuation will be $3.8 billion. There’s Apollo’s 30% profit.

trust earned

Thank you to Michael Nuwer and Justin Morgan for their analysis. I have nothing against private equity, but extraordinary investment returns at the expense of timeshare members or Puerto Ricans is not acceptable if so many complaint allegations are true. In addition to 192 Inside Timeshare readers who are timeshare members, I have interviewed ten current and former timeshare sales agents that all confirm predatory sales practices are widespread in this industry. There have been several recent investigations and settlements by Attorneys General including New York, Wisconsin, Missouri, Arizona, Tennessee and Colorado as well as lawsuits too numerous to mention. It is our hope developers will confront the problem and work with member complaints to improve the quality of timeshare sales today rather than continue to deny such practices exists. Contact Inside Timeshare or an Advocacy Facebook if you have timeshare concerns.   

Timeshare self-help Facebook groups

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

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

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

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

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

Thank you to Justin and Michael, also to Irene for her introduction. This week Irene has been very busy dealing with the many enquiries we have received from US owners / members. Within an hour of publishing Tuesdays article, we received 3 pleas of help, these are sent to Irene who then makes contact with the relevant advice and which of our advocacy team can help. Keep up the great work US Team.

If you need any information or help with any timeshare matter and don’t know where to turn, Inside Timeshare is here to help.

Also remember to do your homework before engaging with any company that either contacts you or you find in an advert. This last one rings very true for one UK reader, She found an advert in the Royal British Legion Magazine for a company that said it could help with a claim. Being in the British legion magazine she believed it would be genuine, well we all would! Unfortunately, adverts are not checked for authenticity, they are sold by a marketing company to pay the cost of publication, the same is also true for any newspaper or magazine. So the it proves that you need to do your homework!

On that note, Friday is here, the weekend is once again upon us, so have a great weekend and we will be back on Monday.

friday dog

 

vulture

The Tuesday Slot: An American Perspective and Comparison.

I can’t speak for Americans, but I imagine EU timeshare members, and even lawyers are not aware of the impact vulture lending by hedge funds has on impoverished Puerto Ricans and timeshare members. Not familiar with the term, my research uncovered the term private equity used to be called in the 80s venture capital and a venture capitalist was called a vulture capitalist due to targeting extraordinary returns for their investors. Fast forward 20 years and “Vulture” Funding in Puerto Rico is being talked about in American Financial news.   

puerto rico

It took me a while to “connect the dots” as Irene says in her article. The majority of complaints Inside Timeshare received concern rising maintenance fees. Legacy owners are particularly affected. Legacy owners are timeshare owners who have not given up their deed to convert to the points based program.

Diamond Resorts does not build new properties. Their strategy is to buy existing properties. Members tell us they are told they have to give up their deeded weeks and convert to points. This is not true. Some contacting Inside Timeshare report maintenance fees doubling or tripling after their resort is acquired. While Diamond will insist to owners, such maintenance fees increases are necessary to bring the resort up to standards, investor conference calls told a different story, explaining that 15% is added onto every budget line item after acquisition, affording investors a guaranteed and immediate 15% profit.

The Finn Law Group questioned the increases in this lawsuit filed against Diamond owned Bali Condominiums.

http://www.businesswire.com/news/home/20170629005705/en/Finn-Law-Group-Files-Suit-Timeshare-Maintenance

Not everyone has a background in private equity like Justin Morgan, economics like Michael Nuwer or an MBA like Irene Parker. Justin and Michael expressed their concerns about private equity and what is necessary for investors to achieve a 30% or better return.

http://insidetimeshare.com/fridays-letter-australia-no-read-correctly/

While explosive returns are often achieved in starting up a company like Apple or Amazon, expecting 30% or better returns out of timeshare may require tactics like those expressed by our readers, claiming they are being crushed by high interest rate loans and higher interest rate credit cards.

Let us know if Irene’s connecting of the dots makes sense to you.  Now to Irene’s article.

What does Puerto Rico’s Debt and Timeshare Debt have in Common?

The payouts they seek are potentially enormous – running into the billions of dollars, with predatory rates of return – if other vulture debt plays are any guide. (Hedgeclippers)

Witch

Part I – Puerto Rico and Timeshare Debt

Is Apollo Global Management involved with both?

By Irene Parker

Part II Friday November 17  

The Effect of Debt and Inventory Evaluations on Timeshare

By Contributors Justin Morgan, Australia and Michael Nuwer, US

November 14

Anthony Bourdain’s CNN show Parts Unknown, which aired November 6, described how Puerto Ricans are being crushed under the weight of debt orchestrated by hedge or “Vulture Funds”. Similarly, many timeshare members struggle with high interest rate timeshare loans and higher interest rate credit cards. It’s not surprising to find out hedge funds are involved with both Puerto Rico and timeshare debt.  

http://www.foodandwine.com/news/anthony-bourdain-parts-unknown-puerto-rico

FOX Business reporter Maria Bartiromo interviewed Diamond Resorts CEO Michael Flaskey April 2017.  The Milken Institute was prominently displayed during the interview. Connecting the dots, Michael Milken, formerly known as the “King of Junk” in the 80s because of his role in a junk bond scandal, worked at the brokerage firm Drexel Burnham Lambert. According to Wikipedia, Drexel Burnham Lambert banker Leon Black founded Apollo Global Management after DBL declared bankruptcy, having incurred $650 million in fines. Diamond Resorts, owned by Apollo, is managed by an affiliate of affiliate of funds.

Apollo Global Management, LLC is an American private equity firm, founded in 1990 by former Drexel Burnham Lambert banker Leon Black. The firm specializes in leveraged buyout transactions and purchases of distressed securities involving corporate restructuring, special situations, and industry consolidations. (Wikipedia)

https://www.bloomberg.com/graphics/2015-drexel-burnham-oral-history/

Debt and Michael Milken are as synonymous as debt and timeshare.

While Mr. Milken is known for his generosity, he is also known to have served 22 months in jail for securities fraud. Mr. Black emerged from the DBL bankruptcy unscathed, today worth $5.1 billion according to Hedgeclippers, $6.3 billion according to Forbes 2017 ranking (Hedgeclippers footnote link 85)   

Only Bloomberg subscribers can read the article linked below, but the headlines speak volumes.

Munis Meet Milken as Hedge Funds Dictate Puerto Rico Terms

Laura J. Keller

June 29, 2015, 12:01 AM EDT Updated on June 29, 2015, 11:40 AM EDT

Puerto Rico is getting a thorough introduction to Michael Milken’s junk-bond world as it increasingly relies on some of the financial industry’s most aggressive players to solve its crippling financial troubles.

https://www.bloomberg.com/news/articles/2015-06-29/munis-meet-milken-as-hedge-funds-dictate-puerto-rico-debt-terms

Vulture activity in Puerto Rico: Excerpts from Hedgeclippers

http://hedgeclippers.org/hedgepapers-no-17-hedge-fund-billionaires-in-puerto-rico/

Hedge funds and billionaire hedge fund managers have swooped into Puerto Rico during a fast-moving economic crisis to prey on the vulnerable island. Several groups of hedge funds and billionaire hedge fund managers have bought up large chunks of Puerto Rican debt at discounts, pushed the island to borrow more, and are driving towards devastating austerity measures.

Known as “vulture funds,” these investors have followed a similar game plan in other debt crises, in countries such as Greece and Argentina.

argentina

The spoils they ultimately seek are not just bond payments, but structural reforms and privatization schemes that give them extraordinary wealth and power – at the expense of everyone else.

The payouts they seek are potentially enormous – running into the billions of dollars, with predatory rates of return – if other vulture debt plays are any guide.

Apollo Global Management, the third largest US-based private equity firm, has not yet been reported to be a member of the Ad Hoc Group looking to collectively pressure the Puerto Rican government, but press reports have indicated that Apollo, along with Fortress Investment Group and Aurelius Capital, are looking to take on a “more activist role” as the debt restructuring continues.

I think we can add timeshare to the list after Greece and Argentina given our reader responses and Diamond’s increased loan loss provision. Moody’s has placed Diamond on a downgrade watch after the company raised its loan loss provision to 18.4% March 31, 2017, from 12.9% the prior year.

The review for downgrade is a result of Diamond Resorts’ high leverage — Moody’s adjusted debt/EBITDA was about 7.0x for the last 12 month period ended March 31, 2017 — and increasing loan loss reserves which will make it difficult for the company to reduce leverage. Diamond Resorts, and other timeshare companies, has increased its loan loss reserve over the past year as a result of an increase in timeshare owner defaults, which to a large degree have been initiated by third party activities. Diamond Resorts’ loan loss provision increased to 18.4% of gross Vacation Interests sales at March 31, 2017, from 12.9% in the prior year. Should the loan loss reserve trend not improve, the company will have difficulty lowering its leverage below our trigger for a downgrade (below 6.5x).

https://www.moodys.com/research/Moodys-places-Diamond-Resorts-ratings-on-review-for-downgrade-including–PR_370606

Of note is the blame placed on third party activities, which includes fraudulent transfer companies and resale agents, some posting ads above our Inside Timeshare articles as soon as we publish. Ignored is deceit on the front end of the sale, despite numerous Attorneys General investigations and lawsuits too numerous to mention, as well as the severely limited or sometimes non-existent secondary market. Without a secondary market, a timeshare contract is worth nothing the moment the contract is signed and it is not uncommon for a timeshare to cost over $100,000.

Timeshare members struggling to meet loan and credit card payments can relate to those suffering in Puerto Rico. Inside Timeshare has heard from 192 of our readers of which 183 are from Diamond Resort members. The majority allege they were sold or upsold by deceit and bait and switch, locked into loans and credit card debt they can’t afford, owning a perpetual vacation product they can’t sell.

Holding timeshare members hostage is a short term profit plus for Apollo’s investors, but is squeezing money out of middle class families at 12% to 24% sustainable? Not one of our readers was aware of the difficulty selling points due to lack of buyers. Contract language doesn’t help because the contract states “you can sell your points” but the part about secondary market restrictions and lack of buyers is not included, at least not in the contract I signed. Timeshare companies will either take back points or foreclose, reselling the same points over and over, described as a hamster wheel by one former Diamond sales agent.

money man

They say history repeats itself, but I would have never imagined, as a former Drexel Burnham Lambert client, the subsequent Apollo firm would buy my vacation plan twenty years later. This, in addition to reading so many online complaints posted by timeshare members who seemed to have nowhere to turn, motivated me to join Charles Thomas and Inside Timeshare in an effort to provide factual timeshare information and to warn the general public to do due diligence before buying any timeshare. I felt there was a need to go a step beyond helpful Facebook posts to warn members away from fraudulent listing and transfer agents, steering them towards regulatory and law enforcement agencies, if they feel they were a victim of a bait and switch.    

On Friday Inside Timeshare Contributors Justin Morgan and Michael Nuwer will explain in Part II their take on the role private equity plays in timeshare.

Inside Timeshare has already heard from Diamond members worried about special assessments after this season’s catastrophic hurricanes, especially St. Maarten. They fear a repeat of the Poipu water damage assessments that resulted in a class action lawsuit.

http://advantagevacation.com/the-point-at-poipu-angry-owners-file-lawsuit-against-diamond-resorts/

As timeshare members brace for 2018 maintenance fees, Inside Timeshare will be here to help those who have questions, given the perpetual contract that still exists in the US, along with member sponsored Advocacy Facebooks.

We seek to provide Diamond Resort 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://www.facebook.com/groups/180578055325962/

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

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

not alone

I don’t know about you the readers, but my head is spinning after this, finance and economics have never been my strong point, but it does look a little clearer now, so thank you Irene.

If you need any help or advice about any timeshare matter, or just about any company you may be thinking of doing business with or that has contacted you, Inside Timeshare will point you in the right direction.

 

letter from america

Friday’s Letter from America

Welcome once again to Friday’s Letter from America, the article we had planned for today by Mike Finn, has been postponed until Tuesday, the reason, some very important breaking news from the US. Inside Timeshare received the press release yesterday 26 October at 5.53pm, It was then sent to Irene Parker our US branch who prepared it for publication today.

As usual we start with Europe, Inside Timeshare has again been receiving many comments from readers regarding the Mark Rowe enterprise ABC Lawyers, all have been the same.

The timeshare owner has attended a meeting at one of their offices, enticed with the prospect of ending their timeshare and claiming compensation. Sounds good, but then comes the crunch, the “salesperson” starts to pitch the Rowe product “Jive Hippo”. Does this sound familiar. Well it should, after all sellmytimeshare.tv (another Rowe company) enticed people to their meetings with the promise of selling their timeshare, but then were pitched into the “Monster Credits” product.

It also appears that the “Jive Hippo” product is required in order to “Relinquish” then “claim compensation”. Once the contracts are signed, the client is also told there is no “cooling off period” as it does not come under timeshare regulations, there is no right to cancel and the full cost must be paid.

On Thursday we published the breaking news on a Norwegian client of Canarian Legal Alliance receiving a massive payout, involving Anfi, since then there has been more news coming in.

At the High Court in Tenerife, the judge ordered that Regency Resorts returns over £13,000 plus legal interest to another client. The contract was also declared null and void.

The same court in Tenerife has also awarded a client over £53,000 plus legal interest against Silverpoint, with again the contract declared null & void.

In one of the lower courts in Tenerife, the Court of First Instance number 5, declared another Silverpoint contract null & void, as it did not conform to the law which requires specific information to be included. In this case it did not contain information regarding a specific date or apartment. The client will be receiving over £44,000 plus legal interest and the return of legal fees.

So it has been all go in the courts on Tenerife, now on with our Letter from America.

Liberté

Breaking News from America!

Finally a Timeshare Exit Strategy with Promise!

October 27

Introduction by Irene Parker

Anything to help beleaguered timeshare members who no longer want or need their timeshare, spells relief for perpetual timeshare members.

With the launch of TARS TIMESHARE ADVISORY AND RESOLUTION SERVICES LLC new “limited term deeded” program, consumers enjoy all the “pros” of traditional timeshare, and none of the “cons”, plus even more benefits, according to TARS President and General Counsel, Martin M. Kandel. “Our program allows legacy owners to safely trade-in their existing traditional timeshare and purchase a limited 5 year term timeshare at their Resort”, Kandel said.

I spoke with TARS Chairman Dennis DiTinno. “Our program is geared toward smaller, deeded fixed week owners, but we hope the brand name resorts will take note and will consider similar exit plans that do not place undue burden on their members or the HOAs.”

Timeshare developers and Attorneys General have focused on shutting down fraudulent resale, transfer and listing scams, rather than attacking the root of the problem. A reasonable exit plan nullifies the ability for such entities to prosper. This multi-page single-spaced Department of Justice reports illustrates the depth of the problem.

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

“Not only can a five year exit plan such as our put such unscrupulous entities out of business, it will ease the burden of debt collection for HOAs,” Mr. DiTinno further explained. “When we presented our exit program at the TBMA Timeshare Board Member Association in Las Vegas last weekend, we were pleased that those in attendance listened and appeared to like what they heard,” he added.

Inside Timeshare has received complaints from 176 readers who describe sometimes catastrophic financial distress unable to be released from their timeshare contract.   

hope1

FOR IMMEDIATE RELEASE

TIMESHARE ADVISORY AND RESOLUTION SERVICES LLC EXPANDS SERVICES FOR LEGACY RESORTS AND OWNERS

Timeshare Advisory and Resolution Services LLC (“TARS”) a company dedicated to promoting the interests and rights of long-time timeshare owners, homeowner associations, and consumers contemplating the purchase of timeshare, has announced the launch of unique programs designed to ease the transition of long time owners, out of their “perpetual” timeshare and also attract new consumers, seeking the benefits of timeshare ownership without the burden of increasing maintenance fees or the hassles of resale.

The program also intends to assist legacy resorts in planning for either continued use as a timeshare property or for an alternative use pursuant to an organized repurposing plan.  In addition, TARS announced the acquisition of a significant interest in the company by Liberté Management Group of the Pinellas Islands, Inc. TARS will be operated as a subsidiary of Liberté and will be jointly headquartered in Treasure Island, Florida.

With the launch of TARS new “limited term/unlimited fun” program, consumers enjoy all the “pros” of traditional timeshare, and none of the “cons”, according to TARS President and General Counsel, Martin M. Kandel. “Our program allows legacy owners to safely trade-in their existing traditional timeshare and purchase a limited 5-year term deeded timeshare at their resort”, Kandel said.  “Legacy owners will continue to be able to enjoy their resort and unit every year of the term, or rent or exchange it as they do in a traditional timeshare. However, they will no longer be billed any maintenance fees during the entire term, which terminates by going back to the resort with no further obligation. There are no worries about resales or fraudulent transfer and exit companies, and the HOA’s have a systematic and controllable, and scalable means to make certain all of their intervals are paying intervals”, Kandel concluded.

Dennis F. DiTinno, CEO and President of the Liberte’ Management Group of Companies, will serve as Chairman of TARS and oversee the close interaction between TARS and Liberte’. “As a manager of legacy resorts, I have been committed to working toward a robust resale market to benefit older resorts and their owners, particularly those resorts fighting to remain financially stable and relevant. TARS will help these sold-out resorts find new owners to enjoy their products and services. I am excited to join with Marty and devising innovative ways to fight for and protect the resort associations and owners upon whom the timeshare industry was originally built”, DiTinno said. “I sincerely believe that what we are doing is to provide ‘out of box solutions… in a box’”, DiTinno added.

In conjunction with select strategic partners, TARS will provide an á la carte menu of products and enhanced services designed exclusively for the legacy market segment. TARS will target self-managed resorts, management companies (in those instances where such a company has been previously retained by the HOA), and individuals for whom timeshare has become a burden.

TARS business objective will be to provide new ways to address old problems by enhancing TARS’ original consumer-centric mission (www.tarserv.com) to provide legacy resorts with a means to maintain their resorts for a decade or more in order to plan for robust continuation or an orderly repurposing of the resort and its timeshare program.  Along the way, TARS may more readily assist individual legacy timeshare owners in parting with their timeshare as a part of the overall HOA program.

DiTinno established Liberté Management and related entities in 1987 to address a burgeoning demand for professional, turnkey resort property management along the Florida Gulf Coast, Liberté Management provides a comprehensive array of personalized services for a wide variety of vacation properties. Services include rentals, sales and resale services for timeshares, resort condominiums and hotels.

Clients range from large developers and community associations to individual owners who expect an unparalleled level of quality and commitment. DiTinno served with distinction in Viet Nam as a member of the United States Marine Corps.

Kandel attended University of Baltimore School of Law and Rutgers University and is a member of the State Bar of Maryland. He is a former Maryland Assistant Attorney General and Counsel to that state’s Real Estate Commission and Commissioner of Consumer Credit, and is the primary author of the first Maryland Timeshare Act. Since 1984, Kandel has served as counsel to timeshare developers, lenders, builders, and a variety of other industry related clients, as well as individual consumers and consumer groups.  He has also operated timeshare development and sales and marketing entities in the US, Australia, and Europe, and has served on the Board of Directors of ARDA and ATHOC.

calm

It’s nice to be on the same side of the fence for once! Imagine a world with no Timeshare Wars with members pitted against developers like North Korea and America. There’s no reason we can’t all get along by releasing timeshare members who feel like they are being held hostage by their vacation plan. Charles Thomas and I would like nothing better than to publish articles about people and places doing things right. Thank you to Marty and Dennis for their olive branch, offering a bridge between greed and need.

Inside Timeshare will publish a monthly resale recycle report to examine how this revolutionary plan is working out. We hope to interview timeshare owners and HOAs taking advantage of this opportunity. I’ll call my favorite timeshare people, Port Elsewhere in the Missouri Ozarks and Maui Hill at Maui Lea to hear what they think.       

So that’s it for this week, two breaking news stories from both sides of the Great Lake, our apologies to Mike Finn for not publishing his article, I’m sure he will understand. We will however be publishing that on Tuesday.

Once again, if you need any information on any company that has contacted you or you are considering dealing with, but are not sure where to look, Inside Timeshare will point you in the right direction.

It’s Friday, the weekend is once again upon us, have a good one and we will be back on Monday.

friday dog

 

letter from america

Friday’s Letter from America

Welcome to this week’s Friday’s Letter from America, somehow we think that when you have read this story you will be shocked, we certainly were.

shocked cat

Inside Timeshare heard from its first US timeshare member seeking advice one year ago. Like today, it was a Hispanic family. We in Spain feel like first cousins to American Hispanics, so are particularly affected when we hear one of our own might be faced with the possibility of foreclosure.

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

When the resort says no, a family may have no choice but to consider foreclosure. There is no one company to blame. Deceit on the front end of the timeshare sale has been talked about since timeshare began. The industry has had its ups and downs, but the emergence of the “right to use” point programs seem to have escalated timeshare complaints and lawsuits from both sides of the fence. There has been a flurry of developer lawsuits against exit, transfer or claims companies targeting members desperate for help, as well as lawsuits against lawyers practicing questionable business practices. Legitimate law firms are not immune.  Several Attorneys General in America have been investigating various timeshare companies.

Caught in the middle is the timeshare member, like the Vargas family. Hoping to warn the general public as well as existing timeshare members, to the danger of buying something that cannot be sold, Deneise Vargas shares her story.

How easily a Vacation Plan can result in Foreclosure

Hispanic

By Deneice Vargas

September 29, 2017

woman 1

I had hoped Diamond Resorts would help us. A hospitality agent had told me to supply medical documentation about my husband’s medical condition, so I thought they had listened and responded in a positive way. I then learned the person I had spoken with had quit. The person who replaced her said they would not help us because Louis got Bell’s palsy a week before we signed the timeshare contract. Bell’s palsy is not the flu! Symptoms include muscle weakness, drooling and an inability to make facial expressions. Just because a person has not been diagnosed, does not mean they are not suffering from a disease.

In dollar terms, this is what we are facing:

  • Current Loan Balance: $93,671 financed at 13.5%
  • Paid already: $76,627
  • Current Maintenance Fee: $6,948
  • We have accumulated 67,500 vacation points

Why buy so many timeshare points?

We purchased a timeshare at Polo Towers in Las Vegas and at Palm Canyon. We were never told maintenance fees would go up each year. With the loans and the maintenance fees, we have used all our savings.

At the Las Vegas sales presentation, the sales manager threatened to have our first sales agent from Palm Canyon in Palm Springs, Tim, fired because it was not legal, per them, for Tim to hold a price for us. The manager got on my phone, speaking to Tim, chewing him out. I was so upset I started to cry. I was confused and did not know what to do. We signed that contract so Tim would not be fired. They opened and charged a Diamond Barclaycard because I did not have enough money. Another $3135 was charged to two different Visa cards. Last July we had to refinance our house to pay off the credit cards.

We went to Las Vegas twice in 2015.  They told us we had to attend an informational meeting about Apollo Global Management because Apollo had purchased Diamond. They said it was not a sales presentation. They lied because they again tried to sell us more points. We were told we should buy more points because we could use points to pay maintenance fees and buy plane tickets and other things. We were not told Platinum members can only use points to pay maintenance fees at four cents a point or that a vacation point is only worth pennies per point if used to buy plane tickets.

In 2016 we went again to Palm Canyon Palm Springs. Tim introduced us to Dan Vendl. Dan explained the benefits of being trial Platinum. I hesitated because the money was going. Dan said there was a company we could refinance with that had a better rate than Diamond, so our payment would be less. That was not true.

We were told “We are real estate agents. You can write off the interest paid and closing costs on these contracts because it is like real estate.” They said the proof was because they have real estate licenses. They are licensed real estate agents, but what they told us was not true. Our accountant said we were not allowed to take any deductions. We were told we had to buy that day so we could not talk to our accountant.

Anytime we check in, they harass us to do another update.  In Las Vegas while checking in, the woman wanted to follow me to the parking garage to get Louie to change his mind even though I had told her NO. She said she needed for us to participate so she would get credit.

We have cancelled other Diamond contracts after signing. One reason was our 16 year old granddaughter was dying of brain cancer.  My son had already lost his wife to cancer and we were helping him.

Now Las Vegas Polo Towers has been calling again. Binni Thomas and his Supervisor Melvin say we need to upgrade to 50,000 points to become permanent Platinum members.  Again, we are told we should never have been given a $3.30 price per point. He said the points are now selling for $8.70 each and that is what we should pay.

I told him No!

operators

Social Media helps. At least we know we are not alone. If you or someone you know does not know where to turn for timeshare help, contact Inside Timeshare or one of the self-help Advocacy Group as members work to help other members find the next step.

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

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

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

Now that you have read this story, do you not agree that things must change?

This type of selling must not be allowed to continue, whether it is in the US, Europe or anywhere else in the world. At least In Spain the law is on the side of the consumer, Spain now has some of the strongest laws relating to timeshare in the world. It is through the efforts of law firms such as Canarian Legal Alliance that have brought this about.

The rest of the world take note, have a good weekend.

friday cat

foreclosure

Timeshare Foreclosure

In yesterday’s article “Start the Week”, we had a look at the resale market in Europe, or the lack of it. We highlighted one resale company Fab Timeshare Resales, who specialise in Marriott resale. The prices advertised on their website started at a paltry 1000€ or $1,180 for a timeshare which starts at 17,000€ or $21,000 according to the Marriott website.

Today Irene Parker looks at the growing problem in the US of foreclosure and defaults, which may just be partly due to the lack of the resale or secondary market, but first a little more news from Europe.

here we go again

Last week in Friday’s Letter from America, we published the news released by Canarian Legal Alliance on their 60th Supreme Court ruling. Yesterday they announced another, which is now 61!

In this ruling it is yet again the Tenerife company Silverpoint, which bring rulings from Spain’s Highest Court against them to 22. The judges in this instance ruled the contract null and void with the return of over £43,000 plus legal fees and legal interest. We are still waiting for the actual infractions of the law to be released, but going by past judgements it will more than likely be the duration of the contract being more than 50 years.

alert

On the “scam” front, mindtimeshare have again highlighted another rather clever little ploy coming out of the Costa del Sol. This company is called Joint Returns Legal Consultants, who have apparently been appointed by the High Court to inform consumers that a case has gone through and the court is now holding money to be returned.

Obviously as with all these “scams”, there is a “TAX” to be paid and the “gentleman” on the phone going by the name Peter Sanchez, send emails confirming the story with letter headings from “Agencia Tributaria”. All this along with confirmation from the BBVA (Bank) and a Notary it all seems very plausible.

Telephone numbers:

Tel.: +34 632844887. Fax: 0872 113 1069

Email jointreturns@gmail.com

This really does go to show some of the lengths these people will go just to get your money, we have said this before and we will continue to issue the same warning.

THE COURTS DO NOT APPOINT PRIVATE COMPANIES TO INFORM CONSUMERS THAT MONEY IS BEING HELD. THERE ARE NO CASES AT COURT UNLESS YOU HAVE INSTIGATED THEM YOURSELF. DO NOT PAY ANY MONEY ESPECIALLY BY BANK TRANSFER TO AN INDIVIDUAL.

Now for today’s main article from Irene.

Timeshare Foreclosure

Is it survivable?

graph

By Irene Parker

September 26 2017

Inside Timeshare received five more complaints over the weekend. This makes over 150 timeshare complaints received. The rise in timeshare default rates reported by bond rating agencies and the lawsuits that have ensued as timeshare developers try to stop the flow of “Cease and desist” letters prove we are not imagining a crisis.

  1. Would you buy a house you could not sell?
  2. Would you buy a boat or car you could not sell?
  3. Would you pay $25,000 to over $500,000 to join a country club you can’t quit?

According to Bankrate

Avoid developer financing

Lenders won’t mortgage a time share because they haven’t been successful in resales or in their valuation, says Patricia Hayhurst, mortgage consultant for Capital Bank in Coral Gables, Florida. “They are considered high-risk lending.”

http://www.bankrate.com/finance/loans/timeshare-loans-primer.aspx

Our own Lisa Ann Schreier was quoted in the article.

“Most (consumers) I hear from are using the developer’s financing as they are unaware of any other alternatives,” says Lisa Ann Schreier, founder of the consumer consulting company Timeshare Insights in Clermont, Florida. “If a consumer can obtain a personal loan (elsewhere) for the time share, the interest rate can be significantly lower as typical developer financing runs 15% to 19%.”

The problem is this is how sales are made. “When you get home, get a home equity loan,” is a common suggestion as it gets the developer off the hook once the buyer realizes they cannot afford the timeshare. Rather than sign off on a high interest rate loan on the spot, demand that you have time to check with your bank or credit union to find out if such statements are true and if you qualify.

Financial journalist Robert Shaw in his 2016 Seeking Alpha article, “Does timeshare need a millennial act to attract new buyers?” questions the industry’s over reliance on upgrading or up-selling existing buyers.

Since an existing owner is familiar and already pleased with the product, sales to existing owners are typically much easier to close. It is hard to visualize an existing owner who is totally dissatisfied with their current ownership sitting through a 90-minute sales tour.

sales pitch

Based on the accounts heard by those reaching out to Inside Timeshare, the reason the upgrade is easy to close, is because of deception on the front end of the timeshare sales, offering buy-back and resale programs that do not exist, or ways to offset maintenance fees to those already financially burdened that do not exist.

Mr. Shaw also feels timeshare is no longer sold as an investment. Yes it is. Buy now because the price is going to double refers to the retail price, not the resale price, yet over and over we hear this repeated as the reason the member purchased additional points. Not one member who has contacted Inside Timeshare realized their contract was perpetual and there was no secondary market.

Timeshare is definitely not a real estate investment and apart from the occasional overzealous sales associate, timeshare companies long ago stopped pitching it as such an investment. Yet, its lack of being a real estate investment may make it less attractive to newer, younger buyers who are wanting value and the ability to sell it when they no longer want or need it.

https://seekingalpha.com/article/3991819-timeshare-need-new-act-attract-millennial-buyers

At least Mr. Shaw questions the concerns expressed by timeshare insiders. Most financial news services merely want to justify the buy on the stock price.

The Foreclosure process is gruesome. There will be threatening calls and the hit on your credit score. We are not attorneys and cannot give legal advice, but the Nolo article about timeshare foreclosure is one of the best articles I’ve read on the subject. Many have tried to resolve issues with their resort, but the oral representation clause reigns.

http://www.nolo.com/legal-encyclopedia/options-avoid-timeshare-foreclosure.html

A good number of those reporting back to us that their resort will not cancel their loan, despite alleged deception on the front end of the sale, has led to many indicating they will not be paying their 2018 maintenance fees. They have no choice because they cannot afford the timeshare. Do not respond to the ads appearing when we publish our articles asking for upfront money to get you out of your timeshare.

I question how the industry can survive. Almost all of the members contacting us have children and grandchildren. Although there is a bit of a role reversal with several parents telling us, “We haven’t told our kids about this”, many have, and those children and grandchildren want nothing to do with the timeshare product once they learn their parents were deceived into buying it.

Please continue to report your grievances. In the book The Burglary by former Washington Post reporter Betty Medsger, describing the break-in at the FBI office in late 1970 that led to the exposure of J Edgar Hoover’s illegal surveillance tactics, led by a Haverford College physics professor at the Media, PA FBI office.  Gloria Steinem wrote as a testimonial:

“Ordinary people have the courage and community to defeat the most powerful and punitive of institutions.”

Timeshare today is broken. When sales agents can lie and laugh about it, at the expense of the young and the old, financially devastated by their vacation plan, something is very wrong. Lawmakers, heavily influenced by the industry, don’t seem to care because timeshare buyers don’t typically buy a timeshare in the state they live in. Attorneys General try to protect the public, but the settlements achieved are mere speed bumps in extraordinary revenue streams.

Add your voice to the growing number of timeshare members who have had enough. Contact Inside Timeshare or one of these self-help groups if you have had enough of the hamster wheel called timeshare sales if deceit has been used to sell the product, foreclosure to retrieve it, and resale at full price to continue the never ending process.

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

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

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

green advocacy

 

So there we have it, no resale or secondary market equals foreclosure, what a state of affairs.

In Europe we are seeing the proliferation of the bogus claims companies, these are playing on the desperation of those who want out but are unable to do so. It may be the resorts or developers will not allow them out, it may be they are unable to sell due to no market, it used to be bogus resale companies that took owners for thousands, how times have changed or have they?

 

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