Browse Tag

Diamond Resorts

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

letter from america

Friday’s Letter from America

Welcome to another edition of Friday’s Letter from America, today Irene Parker asks the Florida Attorney General Pam Bondi, What about us? Ms Bondi seems to have a reputation for backing big business rather than the consumer, but more of that in Irene’s article. As usual we begin with what is happening in Europe.

CLA Logo

Some news which was breaking yesterday has now been confirmed, Canarian Legal Alliance issued a press release informing us of the latest Supreme Court victories.

Legal history has now been made with CLA achieving their 60th victory in Spain’s highest court, we say legal history as this is unprecedented. No other law firm has ever managed to get this number of cases through the Supreme Court. This is a fantastic achievement since their first victory in March 2015, in the past two and a half years they have not only made history but have also made law.

Their latest victories have been against Silverpoint, in sentence number 59, the court ordered the return of over 65,000€ plus the payment of First Instance legal fees and legal interest. The client’s contract was also declared null & void, which now makes them timeshare free with no more ongoing maintenance fees.

With sentence number 60, the same court ruled that the contract be declared null & void, ordering Silverpoint to return over 92,000€ plus Appeal Instance legal fees and legal interest. This now makes a total of 21 judgments from the Supreme Court against Silverpoint alone.

Then the following day, the Judge at the High Court Number 3 in Tenerife, followed the Supreme Court rulings declaring another client’s contract with Silverpoint null & void. The judge also ordered the return of over 11,000€ plus legal interest.

Not only must the clients be celebrating, but I will wager there was some celebrating going on in the Lawyer’s office!

amador-galeca-300x191

Following the publication of yesterday’s article on the new fake law firm Amador Galeca Abogados, we received an email from a reader who has already been taken in by them. Unfortunately they have already paid the Procurator a fee, but at least it was not a large sum, yet something prompted them to start checking the internet for information before they paid them next amounts.

As we said yesterday it would only be a matter of time before we found out the new name of the Procurator and the bank account they are using, here it is:

Procurator: Graham Ingum Gorrin

Address: C/ Layanva, Edif Colmenas, Oficina 2223, 38003, Santa Cruz de Tenerife.

Bank: Deutsche Bank Sociedad Anonima Espa, C.P.A. BCN, Ronda General Mitre 72-74 Barcelona.

IBAN: ES3900190172854010033761

As for the address of the procurator, searching on google and google maps it does not exist, so any post sent there will obviously never be delivered.

This reader has also supplied some new and interesting information, Amador Galeca informed them that the directors of their timeshare had pleaded guilty in court and that all their assets had been seized, not bad, it seems that all the directors according to this group of fake law firms plead guilty!

The amount paid was for a relinquishment through the Spanish courts, which needed to be done first before they could go to court for compensation. The strange thing is, once again it seems that the jurisdiction of the Spanish Courts now extends beyond the borders of Spain and encompasses timeshare in the UK!

These readers have been lucky, they have not lost a huge amount, they have also informed their bank who is going to issue an alert to all other banks.

This does prove the point, never believe what you are told, especially when it comes to timeshare,

IF IT SOUNDS TOO GOOD, STOP THINK AND DO YOUR HOMEWORK!

homework

Now on with Irene’s article.

Florida Attorney General Pam Bondi – What about Us?

Irma Iniki and Timeshare

most people

By Irene Parker

Friday September 22 2017

Florida Attorney General Pam Bondi expressed her outrage over price gouging during hurricane Irma. While her dismay is understandable and commendable, why has there been so little effort expended to come to the aid of Florida timeshare buyers alleging they were deceived into buying a timeshare? Nationwide there have been lawsuits and Attorneys General investigations too numerous to mention.

Ms. Bondi has been quick to investigate timeshare resale scams.

Florida Attorney General Pam Bondi has filed a lawsuit against a company she accuses of violating Florida’s Timeshare Resale Accountability Act.

Florida has a specific law covering timeshare resales because it has so many of the properties, whose owners are often desperate to unload them.

In this latest case, Bondi sued Prime Resorts International, based in central Florida. She accuses the company of making telephone calls to timeshare owners all over the country, telling them they have a buyer for their timeshare. She says the company also claimed to be able to guarantee the deal would close.

https://www.consumeraffairs.com/news/florida-sues-another-timeshare-reseller-031116.html

The Berkley Group

Sources tell us Ms. Bondi is investigating The Berkley Group. The Berkley Group owns Vacation Village Resorts. With a BBB rating of F, looking into this company is a start, but acting on only 110 out of 2,360 timeshare complaints filed from April 2012 to April 2014 seems underperforming at best.

https://www.bbb.org/south-east-florida/business-reviews/timeshare-companies/vacation-village-resorts-in-fort-lauderdale-fl-4003645/reviews-and-complaints

Ms. Bondi opened this resale investigation after receiving 85 complaints.

The attorney general opened her investigation after she said her office got more than 85 complaints, claiming to have lost more than $110,000. The suit seeks a permanent injunction against the company, consumer restitution, and a civil penalty of $10,000 per violation.

Inside Timeshare has received 144 timeshare complaints of which 130 allege they were deceived on the front end of the sale. The dollar amount in question concerns well over one million dollars. The 14 not alleging deceit say they seek relinquishment because they say they cannot afford the annually increasing maintenance fees. ARDA and the industry continue to ignore deception exists, and with lawmakers turning a deaf ear, the court of public opinion seems the only avenue open for families reporting how they have been financially devastated by their timeshare plan.

follow money

Timeshare revenue in Florida is a lot of dollars to tamper with.

As the state’s No. 1 industry, tourism is crucial to Florida’s economy – generating 23 percent of the state’s sales tax revenue and employing more than one million Floridians. In 2011, tourism was responsible for welcoming 86.5 million visitors to Florida and generated $67.2 billion in direct economic impact.

http://www.flgov.com/governor-scott-applauds-floridas-tourism-marketing-2/

The industry will be quick to respond that there are nine million who own timeshares. What difference does a couple hundred families make? It makes a world of difference to the families affected who have contacted Inside Timeshare.

Recently, the Finn Law Group took issue with the lack of disclosure provided to timeshare buyers. If feeling deceived, after spending $5,000 to over $500,000 on a vacation plan, families are shocked to learn their timeshare has no secondary market and the contract is perpetual. Contracts are deceptive in that they often state points can be sold. Buyers are not informed about the lack of buyers should they need to sell.

LARGO, Fla.–(BUSINESS WIRE)–An administrative petition has been filed against Florida’s Department of Business and Professional Regulation alleging that the agency’s approval of a request by timeshare developers to make statutorily mandated public offering statements available by providing an online address at the closing rather the furnishing hard copies violates Florida law.

http://www.businesswire.com/news/home/20170905006015/en/Finn-Law-Group-Files-Petition-Florida-Agency

Ms. Bondi appeared on Las Vegas Attorney Bob Massi’s Property Man Show in 2016 explaining how the Florida Attorney General’s office worked with ARDA and the Department of Justice to shut down timeshare resale or release scams. Mr. Massi encouraged timeshare members to contact a member of the Licensed Timeshare Resale Broker Association if they need to sell their timeshare. When I contacted LTRBA about selling our Diamond timeshare points, I was informed by several LTRBA members they know of no licensed LTRBA broker who will even accept a listing for our points due to secondary market restrictions.

https://www.youtube.com/watch?v=VHCdcS2Ds-U

Inside Timeshare has also started hearing from Bluegreen members. One member is Lela Renea, a Bluegreen member and a detective. Lela Renea says she was deceived into buying a timeshare. If a Florida detective, allegedly reports being a victim of deceptive sales, what chance does the average timeshare buyer on the street have?

http://insidetimeshare.com/fridays-letter-america-11/

When I wrote an article for TheStreet, Jim Cramer of Mad Money’s investment news service, challenging what is in my opinion gestapo like tactics demanding Diamond members stay vacationed, Diamond demanded a rebuttal, stating they understood life’s changes could render their product a liability so they were introducing a program called Transitions that would allow qualified members in good standing a way out. That was June of 2016, yet the company has yet to introduce the program. “Qualified” is the key word. Most members contacting Inside Timeshare have loans, and many allege they succumbed to high interest rate loans and credit cards after hours long aggressive sales presentations. A timeshare must be unencumbered to be eligible for any voluntary surrender program.

https://www.thestreet.com/story/13624491/1/is-apollo-returning-to-its-junk-roots-with-its-acquisition-of-diamond-resorts.html

“Is Apollo Returning to its Junk Roots?” is the article Diamond found objectionable. Most remember the subprime mortgage crisis, but a decade earlier was the Drexel Burnham Lambert junk bond scandal that sent Michael Milken to jail for securities fraud. DBL founder and banker Leon Black filed bankruptcy on DBL only to reform and rebrand as Apollo Global Management, purchasing Diamond Resorts in 2016. If DBL liked junk bonds, which had some value, timeshare points that have no value the moment the contract is signed, should a buyer need to sell, must seem attractive.

Hurricanes and Timeshare

hurricane

One of the top complaints Inside Timeshare has received concerns upsells by timeshare sales agents on the US mainland selling against timeshare agents in Hawaii. This would be normal competition were it not for the fact the dueling agents work for the same company. Buyers tell us sales agents on the mainland side tell existing members they should not have purchased a Hawaii timeshare because of damages from hurricane Iniki that struck Hawaii on Kauai in 1992. They are encouraged to buy more points and transfer to US mainland points, despite Florida resorts included in their purchase. Obviously, Florida is at risk for hurricanes.

pam bondi 1      Ms. Bondi, please listen to us. The Arizona Attorney General has received over 900 timeshare complaints about Diamond Resorts:

http://insidetimeshare.com/arizona-attorney-generals-assurance-discontinuance/

Wyndham former timeshare sales agent Trish Williams was awarded $20 million by a jury concerning overly aggressive and predatory timeshare techniques:

https://www.nytimes.com/2016/11/25/business/my-soul-feels-taller-a-whistle-blowers-20-million-vindication.html?mcubz=0

Eric Schneiderman’s $6.5 million settlement with The Manhattan Club:

http://nypost.com/2017/08/17/new-york-ag-reaches-6-5m-settlement-with-manhattan-club/

In addition to member families,Charles Thomas at Inside Timeshare has heard from eight current and former timeshare sales agents alarmed at the escalation in predatory sales. The following comment made by a former experienced sales agent mirrors the others.

“I watched every day, agents selling DRI for double and close to triple what it was supposed to be sold for but management laughed and congratulated them for doing it.  The maintenance fees statement about buying more and using that to pay your maintenance fees was a practice that was encouraged, but be careful.  Some of the agents, who still work at DRI, would sell the program for $98k when it was only in the 50k range.  One of the guests came back to cancel but the agent said no worries, “I have it packed 40k but I’ll give then 15 off and still make a killing!”   This made me sick because these particular guests were in their late 70′ early 80’s.  I asked the agent if he had a conscience and he just laughed…if you can get them to pay more you’re a hero!!  They have the money!!

Deception actually goes back further than that.  We were told to pack the price for a trade in and imply that it was what they got back for their TS… we sold it for the regular price….they got nothing for their TS!”

(Charles Thomas, editors note: we have published on many occasions on the “stack and drop” tactic. This has been used for many years and we have seen it throughout Europe. It is used as a tool for upgrading or poaching other companies members. The consumer then believes they have had value for their other purchase).

It is our hope Diamond Resorts will listen and respond, along with Wyndham, Bluegreen and others, to improve timeshare sales today after the rise of “right to use” programs. In my opinion, such programs leave wide berth for misrepresentation and deceit.

The following are self-help Facebook pages representing over 1000 timeshare member families:

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

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

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

A few of the 144 families who have contacted Inside Timeshare:

Marsha, Ann and Marjorie

http://insidetimeshare.com/fridays-letter-america-18/

Bonita Hill

http://insidetimeshare.com/tuesday-review-clarity/

Eron Grant ARDA’s Code of Ethics

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

Irina Allen

http://insidetimeshare.com/monday-start-another-week/

Justin Morgan and Michael Nuwer June 30, 2017

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

Alan Callner

http://insidetimeshare.com/wednesday-article-america/

Detective Lela Renea

http://insidetimeshare.com/fridays-letter-america-11/

David Franks Chapter 4

http://insidetimeshare.com/fridays-letter-america-15/

Karen Garello Secret Shopper June 22, 2017

http://insidetimeshare.com/works-industries-not-timeshare/

Romeo and Lily

http://insidetimeshare.com/fridays-letter-america-9/

Dr. Jeffries

http://insidetimeshare.com/fridays-letter-america-7/

Angela Johnson

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

Neina Orrillo

http://insidetimeshare.com/diamond-in-the-news-again/

Barclaycard and Member stories May 17 2917

http://insidetimeshare.com/timeshare-barlcaycard-us/

Marjorie Menacker

http://insidetimeshare.com/another-nightmare-timeshare-street-client-experience-diamond/

Eron Grant May 12, 2017

http://insidetimeshare.com/fridays-letter-america-4/

Barclays Bank Charles May 11, 2017

http://insidetimeshare.com/timeshare-finance-barclays-hot-water-high-court/

Nancy Callahan April 24, 2017

http://insidetimeshare.com/another-nightmare-timeshare-street/

A Filipino Family April 13, 2017

http://insidetimeshare.com/anatomy-timeshare-foreclosure/

Laurie Sabbagh March 17, 2017 Clarity Review

http://insidetimeshare.com/friday-review-news-across-ocean/

A Military Family March 6, 2017

http://insidetimeshare.com/consumer-protection-week-usa/

The Hurleys January 25, 2017

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

Irina Allen January 13, 2017

http://insidetimeshare.com/timeshare-news-across-atlantic/

Kathie Old December 6, 2016

http://insidetimeshare.com/call-change-us-timeshare-industry/

Wyndham Trish Williams $20 Million Whistleblower Jury Award December 5, 2017

http://insidetimeshare.com/wyndham-whistleblower-update/

The Peasant of Venice and the Queen of Versailles November 7, 2017

http://insidetimeshare.com/peasant-venice-queen-versailles/

Sylvia Saldana and the Barclaycard October 25, 2016

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

Hug Your Haters! By author Jay Baer on the importance of Social Media

http://insidetimeshare.com/customer-service-message/

need you

Will anyone listen? Author Jay Baer is to be keynote speaker at the upcoming October Interval International Shared Ownership Investment Conference, attended by developers and private equity firms. In Hug Your Haters, Mr. Baer strongly urges companies to listen. Members are hopeful, but doubtful, developers will listen to him.

Thank you Irene and those that proof read your article and gave advice, timeshare is a crazy world, which is such a shame as it is a great idea, with many who have enjoyed it for many years. There are some very good developers and resorts, but the reputation of the industry is being spoilt by a few.

Have a great weekend.

weekend-picard

         

 

letter from america

Friday’s Letter from America

This week’s Friday’s Letter from America is not the one we originally planned from Michael Kosor, this will be published in due course.

First a little news from Europe, only last week we told of the calls from HMRC informing people that they have money from the Spanish courts, one reader has sent us this information.

They were called by a Kipp Stuart from HMRC Accounting, this was with reference to a ruling at the Malaga courts, Kipp informed them that they were holding over £22,000 on their behalf, unfortunately as there was no paperwork then the funds could not be released. They were given reference numbers along with the following telephone numbers:

08713 581033 to confirm with HMRC

0034 602489947 for the Malaga Court

Wonderful, only problem, the 08713 number is not used by HMRC and also carries rather hefty charges.

The 0034 number is a Spanish mobile number and no court will issue mobile numbers for confirmation.

As we published before

HMRC DO NOT CALL PEOPLE WITH NEWS THEY ARE HOLDING MONEY ISSUED BY THE SPANISH COURTS!

On the subject of courts, it has been a rather busy, that lot at CLA have announced six more wins. There have been five in Tenerife, four of these against Silverpoint, with one of the largest awards we have seen for sometime. In this case the client was awarded over 67,000€ including legal interest and second instance legal fees with the contract being declared null & void.

The other case involved European Coast & sun Holidays SL, the judge of the Court of First Instance declared the client’s contract null & void, along with the return of over 15,000€, then as a double whammy he also ordered back payment of over 16,000€  double the deposit paid.

Then in Fuengirola at the High Court the judges reaffirmed a sentence from the Court of First Instance against Petchey Leisure, by awarding over 14,000€ plus interest and legal fees.

Back to Gran Canaria and the Court of First Instance in Maspalomas once again declared an Anfi contract null & void with the return of 21,000€ plus legal interest.

These are just some of the cases announced this week, it is certainly an expensive one for those companies.

Now on with this week’s letter.

The Deep, Dark, Dank, Obscured From View, But Very Lucrative Timeshare Developer Revenue Stream: Are Its Days Numbered?

money tree

By Mike Finn, Finn Law Group

Originally published by Inside the Gate

https://www.finnlawgroup.com/learning-center/timeshare-developer-revenue-stream-days-numbered

Clarifications in blue added by Irene Parker for non-legal minds (like mine)

September 14, 2017

We as consumers, with a certain level of understanding of business, probably attribute the lion’s share of timeshare resort revenue to two central factors: timeshare sales and timeshare rentals. As it turns out, there is a third major revenue stream that’s related to sales, but is an entirely separate source of revenue, and it’s a significant one. Depending on the nature of the initial purchase, whether it was a deeded interest, or more commonly over the past fifteen years or so, a “right to use” amalgamation of points, this shrouded revenue source may indeed also be in violation of certain state consumer rights statutes, including the Uniform Commercial Code.

I’m speaking to the universally accepted resort practice of the resort retaining every dollar received from a defaulting purchaser, even if the entire purchase price or an amount close to the total was paid over to the resort prior to the owner’s default. This would include a cessation of paying the purchase price, maintenance fees or capital assessments.

It’s not considered relevant, at least if one believes the purchase contract, to factor in the sometimes quite significant amount paid in up to the moment of default, in terms of any form of accounting back to the sum of money paid by the defaulting purchaser. It’s all retained by the resort pursuant to the purchase contract, as “liquidated damages”.

In other words, an unwitting purchaser could have paid in say $18,000 of his/her $20,000 purchase price (not to mention the additional payments of interest and annual maintenance fees), defaulted for any number of reasons and still be pursued by the resort as a debtor for the unpaid balance! Well, isn’t that appropriate, you may retort! After all, the purchaser has defaulted on a perfectly legal (on its face) promissory note obligation of $20,000 when only $18,000 has been paid? Well maybe, but let’s examine what happens next.

Foreclosure of real property and disposition of personal property are governed by different bodies of law. Real property foreclosure sale varies dramatically among the states. Personal property disposition is governed by each state’s versions of Article Nine commercially reasonable disposition.

I found this explanation of the difference in real property foreclosure compared to personal property distribution in Texas helpful:

Texas Real Property Foreclosure

Section 51.002, et seq. of the Texas Property Code defines the minimum statutory procedure that must be satisfied to properly foreclose upon real property. In addition to the minimum statutory requirements, the deed of trust executed by the debtor-mortgagor details the agreed contractual terms and conditions for foreclosure of real property.

Personal Property Disposition in Texas

Article Nine of the Texas Business and Commerce Code defines the minimum statutory procedures that must be satisfied to foreclose upon personal property. In addition to the Article Nine requirements, the security agreement executed by the debtor-mortgagor defines the contractual terms and conditions for foreclosure of personal property. Generally, personal property disposition must be commercially reasonable.

Commercially reasonable is the key concept here. We can all relate to selling a car. According to NOLO, there is no hard and fast rule on what “commercially reasonable” means. What is commercially reasonable depends on a number of factors.

The procedure, not the price, ultimately determines whether the sale is commercially reasonable. Whether a sale is commercially reasonable depends on four factors, the:

  • manner
  • time
  • place
  • terms of the sale.

Perhaps Mike’s concern as it pertains to timeshare foreclosure being commercially reasonable, as it applies to car sales, also applies to timeshare.

“There are times, however, when a private or “dealer only” sale may not be commercially reasonable”, such as in the following instances provided by NOLO. Two of the six points they mention seem to apply to timeshare:

  • the creditor has the ability to sell the car on the retail market
  • the creditor buys back the vehicle then resells it a significantly higher price.

What If I Believe the Sale Was Not Commercially Reasonable?

If you can demonstrate that the creditor did not sell your car in a commercially reasonable manner, you can raise that as a defense against any lawsuit brought by a creditor looking to collect on the deficiency balance. In some instances, if you can prove the sale was not commercially reasonable, the court may reduce or even eliminate your obligation on the deficiency balance.

http://www.nolo.com/legal-encyclopedia/car-repo-sale-was-commercially-reasonable.html

Back to Texas

Comparison of Texas Foreclosure Procedures for Real property and Personal Property

Real property and personal property foreclosures are dramatically different. Real property foreclosures are conducted on the first Tuesday of each month between the hours of 10:00 a.m. and 4:00 p.m. at the courthouse door in the county in which the real property is located, with a notice posted at the courthouse door, personal notice to the debtor, and filing of the notice with the county clerk, all 21 days before the foreclosure sale. These requirements are defined by § 52.001 of the Property Code and are unique to Texas law. Personal property foreclosures are conducted under § 9.504 of the Texas Business and Commerce Code, which generally requires a commercially reasonable sale. The requirements of Article Nine of the Texas Business and Commerce Code are followed, with some minor variations, by all states except Louisiana.

Thus, real property foreclosures in Texas are very defined and structured procedures unique to Texas law which do not require the sale to be commercially reasonable. On the other hand, personal property foreclosure sales are not structured by statute, but they must be commercially reasonable as to every aspect of the disposition, including method, manner, time, place, and terms. The apparent conclusion is that although the legislature has specifically defined the procedures that must be followed to dispose of real property, personal property may be disposed of in any manner the secured party elects, as long as the sale is in all respects commercially reasonable.

The differences between real and personal property foreclosure procedures and requirements have had interesting effects upon lenders and borrowers. The notice provisions for real property foreclosures mandate procedures known to both the lender and the borrower. The procedures provide certainty as to the mechanics of the sale. Both lender and borrower are offered an opportunity to dispose of property, with each fully understanding when, where, and how the sale or purchase will occur.

In contrast, the nebulous standard of a commercially reasonable sale leaves both the lender and the borrower uncertain as to the ultimate and satisfactory sale or purchase procedure for personal property. Article Nine attempts to place the burden on the secured lender seeking a deficiency to sell in a commercially reasonable manner, whatever that may be in the particular circumstances found by the lender. Likewise, the debtor has no knowledge of how the lender will proceed with foreclosure and has the burden of proof, if attacking the sale, to show that the sale was not commercially reasonable. The more certain real property foreclosure procedures seem to work more effectively for both the lender and the borrower.

http://www.lenders360blog.com/2008/10/real-estate-foreclosure-vs-ucc-personal-property-commercially-reasonable-disposition/

Commercially reasonable according to Cornell Law School: A disposition of collateral is made in a commercially reasonable manner if the disposition is made:

(1) In the usual manner on any recognized market;

(2) At the price current in any recognized market at the time of the disposition; or

Wait a minute here!

face

“At the price current in any recognized market at the time of disposition” means my Diamond Resorts points should be sold for nothing. Not one of the 64 members of the Licensed Timeshare Resale Broker Association will even accept a DRI listing and even Howard Nusbaum, CEO of the timeshare lobby ARDA, has been quoted as saying modern timeshare is a right to use product so the member should not expect any value back. I think Mike really is onto something!  

Other timeshare companies may argue that they do have a secondary market, but even those fortunate to be able to sell their timeshare, frequently sell them for pennies on the dollar of their original investment.

(3) Otherwise in conformity with reasonable commercial practices among dealers in the type of property that was the subject of the disposition.

https://www.law.cornell.edu/ucc/9/9-627

Now on the edge of my seat, we continue with Mike’s narration:

In our original example, is the developer out the missing $2,000?  Ask what happened to the object of the $20,000 purchase? Well look at that, the actual property never, even for a moment, left the possession of the developer! My goodness, the developer just re-sold the interest to another brand-new buyer for a fresh new $20,000! So now are you still comfortable with the original purchaser being pursued for the missing $2,000? Perhaps sued, almost definitely having derogatory credit reporting, not to mention harassment from bill collectors? So what exactly happened to the first purchaser’s $18,000 paid to the resort? Is any of it accounted for with maybe a portion returned to the guy who ended up with nothing except perhaps a lawsuit?

Not a chance in Hades! The so-called ‘extra revenue stream’ is now actually an extension of the existing stream to the developer from sales, and sales, and maybe still more sales. How many times can the same unit interest (or bloc of points) be resold over the life of the project?

The distinction (and thus a portion of the reason for my overly dramatic title) is that typically sales revenue in say a condominium project is recorded once, and the revenue is, of course, offset by the cost of acquisition of land, construction costs, marketing costs, etc. and the net amount remaining after those costs is the developer’s profit. However, in the case of the timeshare developer, the original buyer covered those costs in their initial transaction, therefore the new additional piggy-back to back transactions didn’t come with any more land acquisition or construction costs, and therefore essentially came only with very little new or fresh costs of sale beyond the re-marketing costs.

light bulb

Well wait, you might say, this can’t be right! You sure this practice is universal? Yes? Well then, are you sure this unconscionable practice is even legal? Good question, and one wherein the answer to that question may be evolving and it’s not necessarily the laws in place that are changing, it’s the timeshare product changeover, the newer form of the property that is being marketed by the developer that is creating a change in which already existing laws are now perhaps becoming relevant to the timeshare purchase, and by doing so may be enforced by the previously out of luck defaulting purchaser. In fact, it may well be that the same old existing law pendulum may be swinging back in favor of the consumer!

I reference the fact that over the past decade plus a few years, there has been a change in the product that the timeshare industry is selling. Just after the turn of the century, the industry has backed off of selling of the deeded weekly timeshare product, which was indisputably a real estate product, in favor of a product they tout as being more user flexible: a product called a “right to use” product. Setting aside the differences in the actual ability to use the two very different types of timeshare “ownership,” the focus of this article is on the migration of the timeshare product from a real estate based product, morphing into what we attorneys refer to as “personalty”.

In our lawyer’s world, everything not legally defined as real estate is personalty (the only other option in the law). Presumably a ‘right to use’ timeshare product (points based) is not considered by the law as real estate, (if it no longer possesses any attributes of real estate and therefore as ‘personalty’, is subject to differing state laws particularly including the universally adopted, in some form in every state, Uniform Commercial Code).

Additionally, state laws regulating the real estate within its boundaries, do vary from state to state. Personalty, however, is a commodity of a different color. The Uniform Commercial Code (UCC), as its title suggests, is nearly uniform in its textual content, and from an applicability standpoint, every state in the Union has adopted, with minimum exceptions not applicable to this article, a version of the UCC almost identical with its neighboring states. In other words, as we discuss the law of personality (again, all that is not deemed real estate) we can speak to it across the board. These laws apply everywhere within the USA.

As a Florida lawyer, you may have seen other articles where I either cite specific Florida statutes or have issued a cautionary statement that the principles I was espousing may not apply in other jurisdictions. Contrast this article where I do not constrain my statements. Also, rather than cite state specific portions of the UCC, I, in places, simply refer to Articles within the UCC and in others the ‘pure code provision’.

Further, this article is not intended for an audience of lawyers or jurists. It’s intended for consumers to get a grasp of a relatively new set of laws, including the Uniform Commercial Code, that now may begin to play a much greater role in the laws governing timeshare projects and correspondingly, the developers who operate these projects.

I would like to ask Mike at this point about another universally accepted practice – advising borrowers to go home after purchasing their dream vacation plan and arrange financing with their bank or credit union. Perhaps it’s the subject of another article, but the majority of complaints received by Inside Timeshare say their sales agent advised them to seek a home equity loan to lower timeshares usury type timeshare lending rates. Many have done just that. My husband and I were told we could get lower rate financing, “No one should finance at our rates,” warned Donna. (Grand Beach, FL July 2015) I guess buyers that follow that advice are just out of luck, like Sylvia Saldana, now stuck with a $30,000 home equity loan after Diamond Resorts “took back” $60,000 worth of timeshare points. To make matters worse, Sylvia said she was aggressively encouraged to open Barclaycards, told buying more points would lower their maintenance fees. Had she succumbed to that suggestion, Sylvia and her husband would have lost even more money.

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

Back to Mike

Consumer rights may also get a major boost by the applicability of the UCC as well, since, to the extent that a contract provision contradicts an applicable statute, that contractual provision will be rendered null and void.

So, for example take the typical contractual provision that, “all monies paid will be retained by the developer as ‘liquidated damages.’’’ Essentially, the amount of damages fixed must be reasonable ‘in light of actual or anticipated harm’ and a term fixing an ‘unreasonably large amount’ is void as a penalty.

Therefore taking a contract, say with a 10% down payment and then adding subsequent monthly payments, the sum total could easily become ‘unreasonably large’, particularly in light of the quick turnaround on the “use rights” for which there has been a default, assuming which I think is fair with on-site sales team (ARDA’s Mr. Nusbaum calls them forever sales centers), that the interest will be promptly re-sold.

Another example of a UCC provision that may well change the way defaulted buyers are treated is as follows. The included reference to the specific UCC provision is the actual textbook unadulterated Code provision number, and may well differ from numbered state specific statutes. The developer or secured party is under a duty to notify debtors of the disposition of collateral under UCC Section 9-611. Further, the disposition must be done in a commercially reasonable manner.

Of particular importance, the secured party/lender is required to apply proceeds of any disposition to the underlying debt once expenses have been taken.

Is this where we end up with money back to the debtor? Can we go back to our original example?

I paid $20,000 and default at $18,000. For sake of discussion I am current on maintenance fees (which is probably not the case). The developer sells to the next hamster my forfeited points for $20,000. I am relieved of the $2,000 still owed, but if the developer sells for $23,000, I will be relieved of the $2,000 owed plus get $3,000 from the surplus amount? This next sentence sounds like the answer?

Also of notable significance is the duty of the secured party to pay the debtor any surplus which results from the disposition of collateral.

Additionally, the secured party/developer is liable for any damages caused by its failure to comply with Article 9.

In summary, a new day in the life of an unhappy timeshare owner is dawning. Existing laws never before applied to timeshare purchases may well now apply and particularly those timeshare interests that are non-real estate based like the ‘right to use’ interests that are now the mainstream of the timeshare community! Stay tuned for future developments on our website as we begin to apply the theories and applicable state statutes referenced hereinabove.

Respectfully submitted,

Michael D. Finn, Esq.

www.finnlawgroup.com

michaeldfinn@finnlawgroup.com

work desk

Whew! That was exhausting. It’s a good thing we have legal eagles to figure these things out because Charles Thomas and I get pretty depressed at times listening to “Nightmare on Timeshare Street” stories. We have heard enough to fund a series. The question I am most frequently asked is, “How can they sleep at night?”

Thank you to Mike Finn for the chance to publish this and also to Irene to add her clarifications for those without legal minds.

It now only remains to say be careful who you do business with, check and check again, if you need help, then contact Inside Timeshare. Have a good weekend.

weekend02

letter from america

Friday’s Letter from America

Here we are again, another Friday and another letter from America, yes, this week we are back with our cousins across the great lake. Irene Parker gives us another article in the series Nightmare on Timeshare Street. Irene and her Husband have evacuated from their coastal home due to Hurricane Irma, which is set to hit over the weekend, we hope that you all remain safe.

nightmare

Now on with some news from Europe, as we have shown in the past there are many types scams to rob you of your hard earned cash, this is the latest we have been informed about.

It begins with a telephone call supposedly from Her Majesty’s Revenue and Customs, from a Mr D Clarke, he informs the timeshare owner they have received from the Spanish courts several million pounds, which is to be divided up and paid to owners. In this case the lucky owner is to receive over £24,000, but as it is over the £10,000 limit the owner has to ring the number given and quote the supplied reference number.

The numbers supplied by our reader are 003460209896 which is a Spanish mobile number and 033558663 (the reader has missed out some numbers).

No doubt the next phase is when you do call, there will some “tax” that you need to pay first, once this is paid then you will get the money. Well, we have heard that one before!

hmrc

Firstly, HMRC will not make telephone calls or send emails, they will contact by post, they will also not be working for the Spanish courts to hand out “compensation” especially for timeshare. If you have employed a lawyer or law firm to take legal action in Spain, then once your case has been heard and the court awards you payment, this will be dealt with directly from the court. The court will pay you through a bank transfer direct to your account. They will not be sending it to HMRC or any other third party.

CLA have also published a letter from one of their Norwegian clients, in this case they purchased from Anfi 2 floating weeks in 2005, for around 34,000€. They explained that after 4 years they found what they had purchased was not for them, it wasn’t working in their interest. They also found out that it was difficult to get out of the contract, selling would not get them anywhere near what they paid.

They came across CLA who then took on their case, their case was heard at the Supreme Court, their contract was declared null & void on the basis of the illegality of the floating weeks and the taking of deposits within the cooling off period. Eventually, in June this year the awarded amount was transferred to their bank by the court. This does show that contrary to claims made by Anfi that no one gets paid out, clients do eventually get their money.

So, now on with our Friday’s article from Irene.

Triple Nightmares on Timeshare Street!

Diamond Resorts says Marjorie Menacker’s claim is without merit

Virginia Attorney General Mark Herring Closes Case

A Victory for the Oral Representation Clause

back hander

By Irene Parker

September 8, 2017

Marjorie, Ann and Marcia share their experience

Inside Timeshare has received 130 Diamond Resorts complaints from US members. The following three timeshare dream vacations nightmares are allegations, but with 119 out of 130 complaints alleging deceit and bait and switch, in our opinion, a compelling and compounding pattern seems to have developed.

As in any industry, the bad apples make things difficult for timeshare sales agents trying to compete honestly in a world where Master Closers earn $1 to $2 million a year working at sales centers that can book $10 million a month. I have interviewed nine former and current timeshare sales agents and managers who assure me “pitching heat” is endorsed and encouraged top down and industry wide by sales agents that hop from resort to resort as they make their way up the ranks.

https://www.nytimes.com/2016/11/25/business/my-soul-feels-taller-a-whistle-blowers-20-million-vindication.html?mcubz=3

This came as a shock to me. I built my business as a stockbroker, myself hopping from timeshare resort to resort in Hawaii, signing up timeshare sales agents for retirement and stock trading accounts. Back then many sales agents were independent contractors. “So we’re the units!” they would jokingly say. They were good people and one of those sales agents is still a close friend today. She too is shocked by the escalation in aggressive tactics, assigning buyers to a perpetual contract, often with no secondary market.

Today’s Triple Nightmare on Timeshare Street includes Marjorie, Marsha, and Ann. Marsha called me on the eve of what would been her 51st wedding anniversary, attempting to file a Mark Herring Virginia Attorney General complaint online. Marsha told me she was literally having Diamond Resort nightmares. All three direct their complaints against Diamond’s Virginia sales centers. Inside Timeshare has received twelve complaints against Virginia sales agent. Six of the members have reported a positive outcome feeling Diamond, after many rebuttals, listened and took appropriate action. Diamond Resorts Advocacy Department has resolved issues for a total of 31 out of a total of 74 formal complaints filed by our readers. Ann and Marjorie’s complaints are against the same Virginia sales agent.

Inside Timeshare has reached out to AG Herring and to Diamond Resorts for comment. To date they have not responded. Diamond has introduced a program called CLARITY ™ which they say offers transparency, accountability and respect for members.

I will call the following nightmares allegations, but Marjorie, Ann and Marsha would argue this is what really happened. Ann and Marsha have asked not to be identified, but they want to show Marjorie their support, having experienced up-sells similar to what Marjorie alleges.

3 women

Marjorie’s story

Elle and I purchased an additional 6000 Diamond points December 26, 2015 having been told about an exciting one day promotion if we purchased that day. The sales agents said we would not have to pay maintenance fees for 2016 or beyond. We had been struggling to keep up with rising fees as a result of medical expenses. Our contract lists a William Humphries as our sales agent, although we spoke to Brian and his supervisor Jeff at Diamond’s Greensprings Plantation Resort. We were encouraged to open two Diamond Barclaycards to finance the purchase. The finance rate is 25.74%.

The  sales presentation was very high pressure. We repeatedly stated that we could not afford anything that would require a loan, and did not like the difficulty we encountered finding availability. Maintenance fees were rising faster than we expected.

Brian repeatedly assured us that if we took advantage of the promotion offered that day, we would not have to worry about any maintenance fees ever again. He illustrated in chart form on paper how this program would save us money by trading in part of our total points each year. He said the remaining points would actually get “treated as double points.”

We were told this promotion would have been offered to us had we participated in dinner meeting offers over the previous year. I’ve learned almost all Diamond presentations begin with, “You should have been invited to a dinner meeting.” Out of our sight, Brian obtained special permission from his supervisor Jeff to extend the offer only for the day (12/26/2015).

http://insidetimeshare.com/another-nightmare-timeshare-street-client-experience-diamond/

Ann S

First, last January, when meeting with Brian Humphries at an ‘Owner Update’ in Virginia, we were told FLAT OUT  that if we bought 7500 more points we would now be part of an ‘ELITE’ group of Platinum owners who are credited 30 CENTS PER POINT when ‘recycling’ annual points back to Diamond so that Diamond can bring in potential owners. We were told that the conversion at 30 cents per point would be more than enough with all our points to pay our annual fees and still have points on which to travel. We restated the claim back to Brian several times to make sure we understood correctly. Brian now denies that he made any such promise. When I called Diamond and even the Platinum Department no one had ever heard of such a program and kept referring us back to Brian. He had even told us “When you get your bill and it’s time to pay your maintenance fees just contact me and I’ll explain how you do this.”  We would NEVER have purchased that day had that not been our understanding. But then nothing was ever given to us in writing (they even somehow took our personal notes from us and did not return them) and repeated emails and phone requests only ended in denials or flat out ignoring of our questions. After hearing what happened to Marjorie, I will be filing a complaint with the Virginia Attorney General’s office.

Marsha Y

I only purchased additional points because the sales agents at Diamond’s Powhatan Resort in Williamsburg said the maintenance costs would go down if I purchased more points. I have since learned this was not true. I had told the agents I could not afford the rising maintenance fees. I was also not told a $7,100 charge would be charged to a Barclay card for a down payment. The same thing happened in Hawaii. I was not told a Barclay card was being opened to charge a Sampler. I later learned the agent in Hawaii was later fired for this.

The hospitality agent in Williamsburg, when I told her about how I had been deceived previously, told me she understood and that is why sales were stopped at the Williamsburg center for a while until the CLARITY ™ program was put in place. Still, when I attended the Williamsburg presentation, I was charged $7,100 on a Barclaycard without my knowledge.

My husband (now deceased) and I originally owned three deeded weeks. We had no complaints about the agents that sold us those weeks. Up until this point, what I owned was within my budget. The additional charges have caused a great hardship. I am a widow on a teacher’s pension. The actions of these agents have taken away my financial security. I feel trapped. My credit score has dropped from over 800 to the 700s. I had no intention to buy points as it is not as easy or enjoyable to travel without my husband. I can still travel with friends and would be able to remain a Diamond customer if I would be returned to Silver status.

Will the timeshare industry ever admit to deception on the front end of the timeshare sale? Are these customers really not to be believed, along with so many other identical complaints? All three attended the presentations with their families and are adamant what they heard was what they were told.

The following Facebook pages consist of members helping members. Contact Inside Timeshare or join with others members working towards reform if you have a timeshare story, positive or negative, to share, or need help with a timeshare concern. After this Attorney General’s ruling, it really does seem the only court available is the court of public opinion. We posted below “Do you know your Consumer Rights?” Are there any Consumer Rights?

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

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

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

consumer rights 1

Thank you Irene, Marjorie, Ann and Marcia for your contribution to this week’s article, as you can see, timeshare can become a nightmare, it all sounds so great in the presentation.

It just leaves us to say have a good weekend, and for those of you in the path of Irma, stay safe.

weekend cat

letter from australia

Friday’s Letter from Australia

We start September with another Friday’s Letter from Australia, just to give our American cousins a rest. Today Justin Morgan, looks at the the role private equity plays in timeshare, with the introduction and comments by our very own Irene Parker. But first a little from Europe.

europe

Earlier in August we said that it tends to be a quiet month, well this was not the case this year, as our roundup of the month article yesterday showed. We also mentioned that September usually sees the start of new companies, changes of name or even resurrected ones. Well they have started to surface already.

Doing our usual daily rounds of the internet, one site, mindtimeshare, since the beginning of August has published the names of 6 that have come to their attention. 3 of these were published yesterday. We begin with:

Appointing Consultants, with the following website, which was only registered on the 14 August, as usual, the registrant is hiding under a privacy service.

http://appointingconsultants.co.uk/

According to the website, they are a company that offers the following services:

  • Appointment Setting; We can provide your business with qualified appointments for your sales team.
  • Lead Generation; We can offer bespoke leads from both websites and telemarketing operations.
  • Customer Service; Create the best customer services team for your business.
  • Online Marketing; Run an online marketing campaign. We can help you with SEO or e-mail campaigns.
  • Data Sourcing; Source the best possible data to make your business thrive.
  • Sales Training; Teach your team with one of our professionals to be the best. (Their spelling mistake)

The thing is they are informing timeshare owners that they have grounds to make a claim, which for a telemarketing company making appointments for another company is a little worrying.

They also do not appear on any company house records.

The next one is Barlow & Scott, with the telephone number 01904 501 389 which is a York number. When checking on who is calling, one name comes up First 4 Legal, there was a company of this name registered in London, but it was dissolved in February 2012.

There is no mention of a website and they seem to be contacting Club Class members, stating that they are a solicitors office and that there is money being held for the client by the courts in Spain!

They claim that the purchase of membership was never completed as the client never had an NIE Number, no problem for £500 we can get this for you then you can get your money back.

This is however untrue, you do not need an NIE number unless you are going to live in Spain or for any of the following:

  • Open a bank account
  • Buying, selling or insuring a property
  • Arranging a mortgage or credit
  • Pay taxes
  • Being employed
  • Registering with employment agencies
  • Registering to study
  • Applying to start a business
  • Registering with social services, receiving social security benefits
  • Applying for a driving licence
  • Inheriting assets

The NIE is a Spanish Tax Number for foreigners. So beware these types of claims.

The next is called Stapleton Consultancy. Once again they claim that the Spanish courts are holding money owed to the consumer from a previous fraud. Now to get this money paid out Stapleton Consultancy will need to be paid in order to do the work. There are no contact details available, so very little is known.

There is a company called Stapleton Consulting Limited, but they are chartered building surveyors, so absolutely nothing to do with timeshare. As and when new information comes to light, we will publish it here.

This really does show that you must do your homework before dealing with any company that calls you out of the blue, especially when they inform you that you have a payment waiting to be released by a court!

homework1

Just to finish off the month of August, Canarian Legal Alliance announced yet another sentence from the Court of First Instance in Maspalomas, once again it is against Anfi, who still deny that they have any cases against them.

In this particular instance the court declared the contract null & void, the infraction was again a contract over the stipulated period of 50 years. The court awarded this consumer over 23,000€, they also awarded over 4,000€ as double the amount that was taken as a deposit within the mandatory 14 day cooling off period.

If August was a quiet month, what will the next few months bring? Keep an eye on these pages and you will see.

So here we go to the land down under and this weeks article from Justin.

What Role Does Private Equity Play in Timeshare?

we the corporations

By Justin Morgan

Introduction and comments by Irene Parker

September 1, 2017

Private equity firms, traditionally providing capital to fund high growth start-ups, may be shortchanging timeshare consumers in their quest for returns typically targeted to reach higher returns than those of the public market.

Timeshare in general has been facing increased pressure due to overly aggressive sales tactics. This warning about escalating default rates was published February of this year by American BankerDiamond Resorts and Wyndham under pressure due to aggressive sales tactics. Wyndham is a publicly traded company. Diamond is owned by private equity firm Apollo Global Management.

Diamond Resorts ABS under Pressure from Company’s Sales Tactics

https://asreport.americanbanker.com/video/diamond-resorts-abs-under-pressure-from-companys-sales-tactics

The question is – how are higher returns for private equity investors won?

Is timeshare even an appropriate venue for private equity investment? Can higher returns be earned without strangling the timeshare consumer with excessive maintenance fee increases, reduced availability and other unsavory tactics driven by such demands?

Former Diamond CEO David Palmer explained this concept to investors at a September 2014 conference, according to a transcript, “Anything that is put in the budget that gets expended on an annual basis, we get our 15 percent fee, That is basically a 100 percent profit business.”

Meanwhile, timeshare members received this notification:

“Timeshare owners of the Grand Beach Resort, a 192-unit property in Orlando, Fla. … learned in a letter in September that their annual maintenance fee would rise 14.9 percent this year.”

I asked Advocate Justin Morgan, our Australian Contributor, his thoughts:

This is the ‘Super Profits’ issue that I questioned years ago… I pointed out that retail prices for vacation points were sometimes four to six times retail value across Asia and Australia. But the real focus involves turning vacation ‘currency’ into more fiat currencies at super profit level. In my opinion, they are not interested in member value at all. It’s an early version of cryptocurrency! My sentiments are no different today…even worse.

In my case, I found my Diamond Resorts account terminated for renting, although my contracts clearly gave me in writing the right to rent. If they changed the rules, that’s unfair, but virtually all timeshare contracts state the rules can be changed at any time for any reason.  It is now apparent we were ‘all-in’ against the Vegas House that takes all it can get.

Irina Allen agrees. Irina is a professional who ended up with 139,000 Diamond points alleging she was up-sold to that level by deceit. Inside Timeshare previously reported on how Irina’s account was suspended for posting one ad on RedWeek. Rental ads for Diamond points on RedWeek abound.

http://insidetimeshare.com/monday-start-another-week/

The timeshare point’s product is a cryptocurrency that offers no backing other than your promise to keep paying ‘whatever it is this year’ maintenance fee increases. Some timeshare companies force maintenance fee increases for any reason…They can then pick up default points.

Timeshare developers pocket millions and millions this way. Most members are not allowed to leave. It’s like ‘Hotel California’s’…you can check in anytime you want, but you can never check out.

“Last thing I remember, I was

running for the door

I had to find the passage back

to the place I was before

“Relax, “said the nightman,

“We are programmed to receive.

You can check-out any time you like,

But you can never leave!” The Eagles

It doesn’t matter much whether they are public or private, though I feel private equity firms have far less scrutiny. The problems lie in the legal structuring of these entities, and how they can basically bill members for whatever tab that they find is allowable. If they control the HOA, and therefore budget approvals, the rest of the structure is usually just a financing and ‘dividend’ pay out model. Wages can be like a hidden dividend, if they are simply looking to pull money from members over to those they seek to pay out:  i.e. usually management, vs the actually financiers, who are often at the back of house in the financing structure.

In my opinion these private equity firms are targeting the timeshare industry now because they understand that they can raid them by simply jacking up maintenance fees by 20%, or even their required rate of 30% return, by simply hiding cost allocations within their structure, or simply paying their executives directly from the Club. There’s no stopping what they can do under some structures. It is a license for them to take what they want.

dollar man

As reported by Business Wire, “A class action lawsuit has been filed against timeshare developer Diamond Resorts International, timeshare owners associations Bali Condominium Association and Parkway International Owners Association, and auditor RSM U.S. L.P. alleging breaches of fiduciary duty, breach of contract, and professional negligence over billing practices for maintenance.”

The plaintiffs allege that the language addressing maintenance and management fees in the condominium association’s governing documents were outdated and ambiguous. The outdated language allowed the defendants to include subsequent amendments to:

  • Charge inappropriate maintenance fees.
  • Inflate management fees.
  • Hide inappropriate fees.
  • Charge costs unrelated to the maintenance and management of the timeshare development including an “indirect corporate fee.”

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

Bluegreen is exploring a possible Initial Public Offering. I asked Bluegreen member and Economics Professor Michael Nuwer if Bluegreen BBX Capitol falls into this private equity category.

http://www.otcmarkets.com/stock/BBX/news?id=167811

BBX Capitol is not a private equity firm. Alan Levan has had a significant ownership interest in Bluegreen since at least 2008. Something like 85% of BBX revenue and 75% of their income comes from Bluegreen.”  

squiggle

What falls from the mouths of timeshare company public relations departments in their message to the investment community often sounds like a foreign language to beleaguered timeshare members. New York, Tennessee, Colorado and Arizona Attorneys General settlements against timeshare companies are but the tip of the iceberg.

Thank you Justin, we look forward to more from our Australian cousins and your insights into this worldwide product called timeshare. No matter where you are, the story seems to be the same, you are the UP’s, you have the money and we will take it from you, but give you nothing but hassle in return!

It now just leaves us to say thank you to all who contribute to Inside Timeshare, a very big thank you to all the volunteer advocates of our advocacy group, who do a splendid job of helping others with their problems. Have a great weekend and we’ll be back again next week with more from the murky world of timeshare.

BBQ chef

 

6-pillars-with-text

Hug Your Haters Part II: A Customer Service Message

Today’s article by Irene Parker is part II of her Hug Your Haters, which we published on 15 August,

http://insidetimeshare.com/?s=customer+service+message

But first some of the latest in Europe.

At the end of last week, even though the courts are closed for business, another sentence against Anfi Sales SL and Anfi Resorts SL was published. This was issued by the Court of First Instance Number 1, based in Maspalomas, the court ruled according to the precedents set by the Supreme Court in Madrid.

Court Masp

In this case, the court ruled that the contract be declared null & void with the return of over 13,279€ plus legal interest. In this case the infraction was the length of the contract was greater than the 50 years allowed by Spanish timeshare law 42/98, which came into effect in January 1999.

Again this flies in the face of Anfi’s assertion that their contracts are legal and that they have not lost any cases, see the article “Truth, What is Truth?”  Published on 10 August.

It is not just Anfi who deny these facts, Silverpoint have been doing so for years, they have even left the RDO and claim they no longer sell “timeshare”. So what are they now selling?

Well, we do know one product is Keys Concierge, a so-called “Lifestyle Credits” product, which promises a great deal but does it actually deliver? Another ploy by Silverpoint is the move to transfer the blocks of timeshare weeks they sold to clients (with the promise to sell in 2 years for a profit), into what is euphemistically called a “Company Participation Scheme”. Not much is known at present, a lot more research is yet to be done, but it appears that clients sign a document at the notary which makes them shareholders of the company Club Paradiso. If this is the case, then all liabilities of the company will fall squarely on those clients shoulders. More on this when the research is complete.

Now on with Irene’s article.

Hug Your Haters Part II

My Marriott Customer Service Experience

testimonials

By Irene Parker

August 29, 2017

Customer Service is a Spectator Sport, according to Hug Your Haters author Jay Baer. Although Hug Your Haters was written primarily for the providers of customer service, users of Customer Service can benefit from the book as well. Social Media has dramatically changed Customer Service in a way many timeshare companies have yet to acknowledge. The Marriott hotel chain seems to have gotten the message and has adapted to the new world order.

 

Mr. Baer discusses in his book the difference between onstage and offstage Haters. Many of the complaints Inside Timeshare has received are from offstage Haters, unfamiliar with Social Media. Sometimes offstage Haters need an onstage Hater to plead their case.

Disney Vacation Club seems to have bucked the timeshare trend, refusing to fall back on the oral representation clause that states, “I did not rely on any oral representation to make my purchase” which translates to the customer is always wrong. Disney has few timeshare complaints so it’s not surprising to find former Walt Disney theme park executive Lee Cockerell, author of The Customer Rules, mentioned in Hug Your Haters. Mr. Cockerell explains in his book how he would encounter employees blaming the customer:

“From time to time over the years, a customer would complain to me that a frontline employee had been belligerent. When I asked the employee what happened, I’d usually be told the customer was wrong about the facts, or had been abusive, or trying to cheat the company. Most of the time, the employee believed it was better to lose a bad customer than appease one.” p. 115

A Lesson for Other Timeshare Companies

Another Hug Your Hater example is Pella Windows and Doors, VP of marketing Elaine Sagers. “Monthly, our executives call a random selection of unhappy customers to talk about their experiences with us…..We’ve also played recordings from the call center so you can hear the emotion in our customers’ voices around what’s been happening with jobs and their homes.” p. 120

Having listened to 133 timeshare complaints, mainly about maintenance fee relief programs that do not exist, or the ability to sell points when no secondary market exists, it’s hard to understand how companies can so often ignore or dismiss allegations, especially when a volume of complaints (119 out of 133) meet the definition of white collar crime – “deceit, concealment, violation of trust and bait and switch” – painting a compelling and compounding picture of trouble within a company or within the timeshare industry as a whole. I challenge any timeshare executive to listen to the tone of the voices of families devastated financially by their vacation plan. “Well you signed a contract,” is not the appropriate answer. I’m sure Mr. Baer would agree.

Mr. Baer makes another important point I have often stated when it comes to offering a customer wronged an apology. “In some corners of the business universe, anyone interacting with customers is prohibited from saying (or typing) an apology, because it is believed – by particularly Draconian attorneys – that it could weaken the company’s position in a legal proceeding.” “In the world of Charles Dickens, ‘If that’s the law, then the law is an ass,’” Mr. Baer quotes Michael Lasky, an attorney and litigator with the Davis & Gilbert law firm in New York City. Mr. Laskey emphasized that of course companies should be careful about what they say, but the answer is not to ever say “I’m sorry.” p 125

marriott rewards

Page 138 of Hug Your Haters discusses the importance of rapid complaint response time. My husband and I have been Platinum Marriott Rewards members for several years. About a decade ago I complained about something I can’t remember at a Marriott Hotel front desk. I was just complaining, not asking for compensation, yet the company responded with an automatic adjustment in reward points. Every 20 or so stays, something might happen that I would complain about had it not been for the times the company responded rapidly and appropriately.

Right out of the Hug Your Haters playbook, I posted a comment on the Marriott Facebook about how a trainee and a manager patiently and pleasantly changed our room three times to address our concern about highway noise. I posted this experience on Marriott’s Facebook and they almost immediately responded, “Irene, we would like to share this on our comment site if that’s alright with you.” As Mr. Baer explains, onstage Haters (or Lovers) don’t expect to be answered. When they are, they are taken aback, astonished that a company as large as Marriott would care.

I can’t speak for Marriott Vacation Club, the timeshare company, because I am not a member, but one of our Advocates, a senior manager with a Fortune 500 company, also a Marriott Vacation Club member, made this comment about Marriott in Part I of our Inside Timeshare article Hug Your Haters, “I think of a brand like Disney first and foremost. Also, while I know a company like Marriott has their critics, in all my years traveling and staying at their hotel and timeshare properties I always got the impression they were serious about fulfilling their fiduciary responsibilities and providing top shelf customer service and a quality customer experience.”

Onstage Haters compared to Offstage Haters – Chapter 7

Some companies respond to negative comments by expanding their advertising budget. “Advertising is a tax paid for being unremarkable,” is a quote Mr. Baer said is usually attributed to Robert Stephens, founder of The Geek Squad,  but he rephrases the comment appropriately, “Advertising is a tax paid when you’re poor at retaining your current customers.” p. 18

“Listening is the ability to pay attention to what the sounds means and understanding it. We hear noise, but we listen to music. That is because noise falls on our ears without any effort at our end,” said an anonymous writer explaining the difference between hearing and listening. Too often customer complaints are dismissed as noise in the form or automatic denials to a complaint filed against a timeshare sales agent (s).

create

These are but a few timeshare Advocacy Facebooks and websites of members helping members because company complaints so often fall on deaf ears. They are closed groups, but all would welcome corporate representatives bold enough to listen and learn. We hope timeshare industry executives, ARDA and lawmakers will take the time to not just hear, but listen.

Bluegreen and Diamond Resorts 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/groups/DiamondResortsOwnersAdvocacy/

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

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

New York Attorney General Eric Schneiderman recently sent a message in the form of a $6.5 million settlement against The Manhattan Club timeshare accused of restricting availability for members who paid thousands of dollars for a timeshare while allowing access to those booking online. The settlement response was a reaction to a chorus of timeshare members mobilized and action orientated. All timeshare owners are grateful because a victory for one is a victory for all. Lack of availability is a universal complaint.

change

Thank you Irene, once again you have given us a look into the world of “Customer Service” or in some cases lack of. It is one of the main complaints that Inside Timeshare does receive, in many cases the sales staff are only intent on getting more money from you, rather than helping to get the best from your membership.

If timeshare is to flourish, developers and resorts really do need to look at this aspect and change their practises. Disney is a very good example of this as we showed in a previous article by Irene, “Disney Vacation Club Vs The Timeshare Industry”, published in July’s “A Lesson for Other Timeshare Companies”.

If you have any questions or comments Inside Timeshare invites you to contact us, your views are important, it will help to change the industry for the better.

Have you been contacted by a company you have never heard of, or want to know more about but don’t know how to start, again contact Inside Timeshare and we will point you in the right direction.

help

letter from america

Friday’s Letter from America

It’s Friday! Time for another Letter from America, this week one of our advocates writes an open letter to an industry advocate, Irene Parker provides the introduction, but first some news from Europe.

Those nefarious fake lawyers from Tenerife are at it again with another new twist to secure your money. This time it is from Armando Gareca Abogados, one of the new names in the Litigious Abogados family, thank goodness this reader decided to search the web before paying any money and found our articles.

armando-gareca-abogados-logo-1

This particular reader was contacted by Armando Gareca and informed that a case had been lodged with the court against their timeshare resort, not bad considering the courts are closed in August. They were informed they could become part of this case and once they paid the Procurator fees of 1,012€ the case would proceed. It all sounded very good, they were told how much they would be getting back and when they would receive it. Obviously this law firm has a crystal ball and can tell the future!

As we said the courts are closed in August, but also they have expanded their jurisdiction, the Spanish courts and these so-called Spanish lawyers now have the power to take a Greek resort to court in Spain. Not only that Spanish law is applying to a purchase made in Greece!

So just to recap, if you purchased your timeshare in Spain or any of its territories, then Spanish law will apply, if you purchased in the UK, Malta, Portugal, Greece or anywhere else in the world, then Spanish law will not apply. Also it takes at least 12 to 18 months to get a case to court, there are some lengthy procedures to go through before it gets to trial, so the promises of this particular group that the case is being heard within weeks are false.

We have also had some enquiries regarding finance for timeshare purchases arranged by the sales staff, many of these are with Barclays Partner Finance or Hitachi. Some of our readers who have been contacted by various claims companies are told that once they sign up for legal action, they will have the loan stopped and the interest repaid.

This is a false claim, the timeshare resort acted as a broker for the finance, your agreement and contract is a personal one with the finance company and nothing to do with who sold you the timeshare. If you are taking legal action against your timeshare company, the loan is a separate issue, which can only be dealt with after a successful outcome against your resort. By stopping any payments to the finance company you are then leaving yourself open to legal action by debt collectors and subsequently receiving a CCJ, or County Court Judgement. This will have a devastating effect on your ability to get any credit, even being able to get a mortgage.

So beware of many claims, these people will play on your emotions, make promises that are not there, it pays to to check and double check. Do your homework!

homework

Now we move on to this week’s Letter from America.

An Advocate’s Open Letter to an Industry Advocate

greed1

By an Advocate

Introduction by Irene Parker

August 25, 2017

The following is a letter submitted to Inside Timeshare written to a timeshare industry proponent by one of our Timeshare Advocates. The letter is in response to an article the author wrote posing the question as to whether the timeshare industry needs to look in a new direction.

The letter writer asked that he not be identified and that the title of the article not be mentioned as this was a personal letter written to the author. One thing sorely lacking is dialogue between critics and proponents of the right to use timeshare product which can be financially devastating for a family when the resort denies their release and when no secondary market exists.

Following the article I have offered comments agreeing and disagreeing with both the author of the article and the letter writer. We encourage others to weigh in.

Thank you to our Advocate reaching out to the industry. We hope he receives an answer.

QA

In your article you state, “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.”  While I agree with your assessment that it is not an investment, I must ask, are you saying timeshares are not real estate or are not an investment?  I also read other timeshare articles you wrote. You are knowledgeable, but I believe you missed some of the key issues a potential buyer of the product needs to understand. You are not the only financial timeshare writer glossing over two important issues:

  • Timeshares have no viable secondary market,
  • The timeshare product has evolved to no interest in real property.

Consider the potential impact on the industry, or better stated, why the issues have not yet impacted the industry.

You rightly state in your article, timeshares are overpriced and there is no appreciated value in the real estate. I wish you had made it clear, that once purchased, a timeshare has no value. You must be aware of the fact that there is no viable secondary market. With little data available (the industry controls it), I find the “sale” of most timeshares on the secondary market require the seller to bring money to the transaction. That equates to a negative value.  

Recently, in an effort to avoid increasingly ugly publicity, many of the largest players are offering a “give back” or “surrender” option to older owners, not actively using or able to use their timeshare, provided the associated home facility is viable and the product is fully paid. These guys are such good sales people they have actually been successful in improving their image, offering certain members in select properties the opportunity to give back their timeshare to the developer with nothing in return other than to escape their burden. The timeshare interest they bought for $20K to often well over $100K is given up for nothing so the developer can resell as new.  

The non-viable secondary market environment is no accident. It certainly is not caused, as ARDA would have you believe, by an oversupply of inventory, or the result of advocacy groups and “sell your timeshare” type organizations that illegally prey on owners. ARDA has long acknowledged the lack of a viable secondary market and has for years committed to fix it. While out of the public eyes, ARDA does nothing, even works not so secretly against efforts to raise a secondary market.

I am sure you have read industry 10Ks. In most every 10K I have read for the past 15 years, the existence of a secondary resale market would have a significant negative impact on developer earnings. It’s no surprise the industry is active in suppressing the market to eliminate their perceived risk. I just wish our consumer protection guys, wherever they may be, would mandate the same level of discourse for the individual timeshare buyer.      

I also wish you had not implied a timeshare interest is necessarily tied to a real property interest (and again the industry should be required to disclose this to potential buyers). The classic deeded timeshare is today by far the minority of sales. Timeshare consumers buy either an interest in a “user rights” trust, not the underlying real estate, or simply buy into a timeshare “club” arguably not a timeshare at all. Many in the industry call them vacation clubs.

Please understand my criticism of your piece is meant to be constructive and more importantly, intended to spur some additional interest on your part by examining the member’s perspective. Few consumers really understand the product and/or business model. The consumer protections guys are asleep at the wheel or have no mandate/political incentive to get involved, and the industry will not speak up for fear of risking a very profitable business model born on the backs of timeshare buyers fallen victim to the oral representation clause, locked into a perpetual contract. It’s tough for the consumer or the industry to get the real picture.

Have you had a chance in the past several minutes, as you struggle through my letter, to consider my question about the implications of the issues presented?

  • No secondary market,
  • Inadequate regulation,
  • ABS markets,
  • Cash flow should the issue of a non-equity product make the light of day,  
  • Inadequate disclosure as to the lack of a secondary market.

I am right?  No?

Well, I will end now and hope you do consider the implications of what I touched on. If I have sparked any additional interest on your part I’d like to talk more. Please call or write.

Respectfully,

An Advocate

gps cartoon

I would like to add a few comments to some of the issues raised or not raised by the letter writer and the article’s author.

First, I disagree with the article’s author in his statement that only a few overzealous timeshare sales agents sell a timeshare product as an investment, as the US side of Inside Timeshare continues to receive complaints almost daily from our readers reaching out to us for assistance after they allege being sold by deceit, concealment, violation of trust and bait and switch, meeting the definition of White Collar Crime, Financial Institution Fraud. Timeshare sold as an investment, told it would be easy to resell, is still one of the top five complaints.

We always want to acknowledge sales agents and developers trying to exist in a timeshare world so ingrained in deception on the front end of the sale. The 7,000 plus timeshare members belonging to five Bluegreen and Diamond Resorts Facebooks are filled with posts concerning allegations of deceit.

Second, surrender programs are no help to the majority of timeshare members that have reached out to Inside Timeshare because these members allege they were duped into signing up for high interest rate loans and credit cards. High 25% interest rate credit cards now can pop out on site like toast out of a toaster. Multiple credit cards are often opened.

As to a secondary market, we have heralded Disney Vacation Club as a company that allows an acceptable secondary market.

http://insidetimeshare.com/mid-week-report/

This is where the letter writer and I disagree. Licensed Timeshare Resale Broker Judi Kozlowski of RE/MAX would argue Hilton also has a solid secondary market in that they don’t punish the secondary point buyer to the extent other developers do. Judi has been working the Hilton Grand Vacation timeshare resale market since the beginning of their current resale program.

“In my opinion, Hilton has the best resale market out there – the developer does not punish the resale deeded points buyer. Buyers of points on the secondary market are rewarded with the ability to join the Elite Club. They are still allowed to use the open season rates, trade internally and use RCI through Hilton.”

Third, I disagree with the letter writer in that he states ARDA has stated they want to fix the secondary market problem. I think that is old news from a 2014 RedWeek article. In recent statements, ARDA CEO Howard Nusbaum has stated timeshare is a right to use produce so members should not expect any value back. My rebuttal is that if timeshare is now defined as a country club of sorts, why is the contract perpetual? What country club is out there you can’t quit? What country club, except for the likes of Mar-a-Lago, requires an initial payment of often $50,000 or more?  What about the consumer that has turned over $50K to sometimes over $100K only to learn two weeks later they allege they were lied to as showcased in several of our Nightmare on Timeshare Street articles.

The letter writer mentioned Advocacy groups. I would like to make a distinction between real advocates and scam artists that call themselves advocates, including some law groups. We have 93 timeshare members helping other members I consider real Advocates. We also have 55 Advocates, including several attorneys and professionals, who donate their time pro bono to offer an assessment or opinion after the resort has denied the member relief.

Thank you to our letter writer and to all our Contributors. Your voice is important because one or two voices alone do not a concert make. Contact us or one of the Bluegreen or Diamond Facebook pages if you need assistance, would like to share your timeshare experience, or express your opinion.

pin up

Timeshare Advocacy Group™

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

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

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

There we have it, the end of another week and the start to what we hope will be a great weekend. Inside Timeshare thanks all those who contact us with information and enquiries, it is with your help we can bring those issues to a wider audience. Keep them coming.

Have a great weekend and join us again next week.

weekend01

law

Legal News From the US: Castle Law Group PC v Timeshare Developers

Today Irene Parker gives us an insight into one lawsuit that has made the headlines in the US, it would seem that across the great lake it is the timeshare companies that are on the legal offensive. In Europe the timeshare companies are very much on the defensive as we have seen in some of our previous articles.

Yesterday we published an article about the legal battle being waged against Silverpoint, they have stated that they will be filing a case with the High Court of Justice of the European Union, arguing that Spain has got the EU Timeshare Directives wrong.

eu court justice

Just to clarify one point on the EU Timeshare Directives, that is what they are “directives”, they are not law. A directive issued by the EU is a guide to all EU States to enact into their own domestic laws certain aspects which affect citizens. It is up to each individual state to interpret those directives as they see fit. The whole point is that each State may strengthen the directives, which is what Spain has done with their own timeshare laws, firstly with Ley 42/98 and more recently with Ley 4/12.

Directives are there to try and unify each State’s laws, especially on the matter regarding consumers rights, which the timeshare directive was intended to do. Before the timeshare directives came out, timeshare in Europe was what can only be described as lawless, timeshare companies could walk all over the consumer, there was no protection, timeshare was a new concept which nobody actually understood.

It followed an old economic system known as Laissez-faire, which has its roots in the 17th and 18th centuries, it was to be free of any government intervention, such as regulation. More recently a new term was conceived by conservative politicians and economists ‘free-market capitalism’. Timeshare has always followed this model, profit, profit and more profit at the expense of the consumer. (Again it sounds like Star Treks Ferengi).

Until laws are strengthened to the benefit of the consumer, we are going to see many more of these legal battles, be it consumer against developer or developer against law firms, the stage is set, let battle commence!

Now on with today’s article by Irene

Castle Law and Judson Phillips is Sued in Federal Court for Fraud

Orange Lake v. Castle Law Group PC

Westgate v. Castle Law Group

Diamond Resorts v. Castle Law Group

Who Next v. Castle Law Group

Speak truth

By Irene Parker

August 22, 2017

Who is Judson Phillips?

Tea Party Nation is a conservative American group considered part of the Tea Party movement.   The group was created by former Shelby County, Tennessee assistant district attorney Judson Phillips in 2009

https://en.wikipedia.org/wiki/Tea_Party_Nation

Judson Phillips Ridiculed for Wanting to Deny Others the Right to Vote

Judson Phillips, the lawyer behind Castle Law Group (Nashville), latest idea has created a hurricane size backlash against Mr. Phillips. The Castle Law Group owner believes that only property owners should have the right to vote.  Phillips seems to believe those who aren’t the elite feudal lords of property can’t be trusted to vote. Instead, they must be put back in their place as serfs, working for their lords for scraps off the feudalistic tables.

http://www.brighthub.com/money/home-buying/articles/123520.aspx

A Bright Hub reader’s response:

Yes, I am Republican but in no way would I ever want to be affiliated with any political group who deemed renters shouldn’t vote in public elections.

Who Castle Law Group is not:

http://www.castlelawgrouppa.com/

I contacted attorney Ben Hillard of the Castle Law Group P.A. in Largo, Florida a few months ago – by mistake. Mr. Hillard responded saying he thought I had his law firm confused with Castle Law Group PC of timeshare fame, law firms differentiated only by the initials P.A. and PC. Mr. Hillard would like to make it clear his firm is in no way associated with Mr. Judson Phillips or his law firm Castle Law Group PC. In a recent letter to Mr. Hillard, Mr. Phillips said his firm is considering rebranding for reasons not associated with Mr. Hillard’s concerns, the similarity in names.

Here is the Castle Law P.C. and Orange Lake Lawsuit as reported by Paul Brinkmann at the Orlando Sentinel

Orlando-based timeshare companies Westgate Resorts and Orange Lake Country Club filed nearly identical lawsuits in Orlando against Tennessee firms Castle Law and Castle Marketing. Westgate and Orange Lake accuse the Castle companies of charging some customers an upfront litigation fee of $7,500. Orange Lake said Castle filed no lawsuits for any of its owners who paid the fee; Westgate said Castle hasn’t filed lawsuits for some owners who paid the litigation fee.

A senior partner with Castle — attorney and Tea Party leader Judson Phillips — denies those allegations…. he said in an email he believes the suits are frivolous, and he and Castle have obtained good results for clients.

http://www.orlandosentinel.com/business/brinkmann-on-business/os-bz-timeshare-cancellation-fraud-20170618-story.html

According to a letter sent to Orange Lake attorney Brian Lower, from a Castle Law Group attorney, Castle accused Orange Lake of “gross misrepresentations regarding the terms and conditions of the Orange Lake timeshares in that they were fraudulently induced to enter into the timeshare contract and the debt instruments associated with such contracts in violation of federal and state laws.”

A letter from a lawyer like this triggers a “cease and desist” demand of all communication with the client, including collection attempts. This cease and desist letter has served as a bone of contention to timeshare developers in that a debt collector may not communicate with a consumer if the consumer is represented by an attorney or has an open Attorney General complaint, under the Fair Debt Collections Protections Act.

Among the twelve causes of action in Castle’s cease and desist letter against developers, are those our Inside Timeshare readers who have contacted us asking for help would not disagree with:

  • Improper and unethical high pressure sales tactics.
  • Gross and deliberate misrepresentations regarding benefits of ownership.
  • Gross misrepresentation regarding the ability to utilize timeshare points to cover fees associated with membership and exchanges.
  • False information regarding the ease and/or ability to resell for a profit.
  • False sense of urgency to purchase the same day.

Castle Law Group PC is not Better Business Bureau accredited, is nonrated, and a consumer complaint warning has been posted.

https://www.bbb.org/nashville/business-reviews/timeshare-cancellation-and-litigation-attorneys/castle-law-group-pc-in-nashville-tn-37113357

According to the Castle Law website they are timeshare lawyers trusted by thousands with a 4.7 out of 5 star ranking based on 12 reviews (powered by GetFiveStars). When I reached out to the firm for comment, I was put on hold for a very long time.

https://timesharecancellation.com/

you decide

Greg Crist, CEO of the National Timeshare Owners Association was recently quoted by the Orlando Sentinel that more lawsuits against cancellation companies were likely in the works.

“Some of those cancellation companies that have been targeted by developers were actually started by their own former timeshare employees. Those folks learned how to exploit the system by learning what is called the inside track. They know how the high-pressure sales tactics work,” Crist said. “They attract timeshare owners in the same way — post cards offering a free dinner, or an evening out. They show owners how maintenance fees escalate, and literally scare the hell out of these people using calculations that are wildly inaccurate and overstated. These are not law firms but represent to have an attorney on staff, giving the illusion that there are legal services involved in the transaction. Rarely does the company even communicate with the resort and the timeshare owner doesn’t even know what is happening until it is too late. Why is that?”

Crist explained this is often due to an unqualified money back guarantee the company provides that isn’t worth the paper it’s printed on. The owner is simply lulled into a false sense of security, until they are foreclosed on and that’s when all hell breaks loose. Crist has watched this happening for years, but says the industry is making a mistake by throwing legitimate attorneys in the same mix with resale, transfer and advocacy groups.

While the NTOA is involved with educating owners, advocating for their rights and helping them engage in the product they already own, they do not sell, transfer or offer services like TPE’s do. Any timeshare member or owner can join NTOA.

https://www.ntoassoc.com/

GBUgly

The present legal climate in the timeshare world is reminiscent of the old west with summons flying like bullets back and forth across the corral. Lost in the middle is the consumer, many complaining they purchased a timeshare based on false promises. The timeshare lobby ARDA and the major timeshare developers seem determined to ignore outcries of deceit on the front end of the timeshare sale.  

All attorneys are not created equal. It seems that timeshare developers don’t want a timeshare member to ever contact any lawyer and they lump all attorneys into a kettle of frivolous lawsuit filers. Two major developers attributed their rise in default rate due to “attorneys targeting members and cease and desist letters.” As in any profession, some attorneys do have questionable business practices, but any citizen should have a right to their day in court and the legal representation that accompanies that right if they feel they were deceived into purchasing a timeshare.

One former Hyatt and Diamond Resorts sales agent described “inventory recycling” as a hamster wheel that sometimes begins with deceit and bait and switch on the front end of the sale. To date (as of August 16, 2017) Inside Timeshare has received 124 inquiries of which 110 allege they were deceived on the front end of the timeshare sale. Most have outstanding loans.

“I am asking you to look at the moon and you are staring at the end of my finger,” deceased Jesuit Priest Anthony DeMello once wrote. That’s how I feel listening to case after case from family members, often financially devastated, alleging they were deceived, sometimes just days after a rescission period. Why won’t developers take a closer look at their own house?

ethics cartoon

Contact Inside Timeshare if you have a positive or negative timeshare experience to share, through your experiences others may have a better understanding of what they are going through and see that they are not alone.

If you need any further information regarding any article published, or wish to know where you stand legally with your timeshare, Inside Timeshare is here to help. Contact us and we will point you in the right direction.

letter from america

Friday’s Letter from America

Welcome to this week’s Friday’s Letter from America, this week we publish Part II of Karen Garello’s Secret Shopper report, but as usual we look at what is happening in Europe.

During our daily searches of various timeshare websites and forums this particular article made us chuckle. It was published on the Travel & Leisure Group (timeshare resale) website under information and Timeshare Blog, it is an interview with Gavin Brown and his recent stay at Anfi, he is manager of the said company, obviously written by one of the employees who conducted the interview.

The piece starts out with Anfi Beach Club is known throughout the timeshare industry as a real gem”. It then goes on to describe the location, “Ideally located on a heart-shaped island in Gran Canaria”. Well straight away that brought everyone down laughing, the heart shaped island is a man made island which is situated between the beach and the marina. It does not have the room for the huge resort called Anfi! It does however have sunbeds, a cocktail bar and a restaurant. You can also hire the island for weddings, if you can afford the 12,000€ for the basic package.

heart shaped island Anfi
The heart shaped island at Anfi

It turns out that Mr Brown, who has been in the timeshare industry for years, has never owned a timeshare, (I wonder why?). Mr Brown stated that he always booked with online travel agents and package holidays, but due to sometimes being disappointed with room location and the standards of the hotels, he felt that timeshare resorts offered better standards.

Well, we can agree with that, so why did he choose Anfi? As he put it he has a great knowledge of Anfi, having sold so many resale weeks, so when “A fantastic week and apartment became available at a great price, and I couldn’t pass it up”. Although we couldn’t help wondering if he would have bought at the ridiculous prices direct from Anfi?

He then goes on with a wonderful sales pitch on how great the place is, the wonderful facilities and the great restaurants, with reasonable prices compared to other 5* resorts. Well sorry Mr Brown, but you can get even better food at even better prices by leaving the resort and heading to some of the local restaurants.

The article then ends with “If this has made you consider Anfi Beach Club, or any of the other Anfi resorts, why not call Gavin himself or one of his colleagues to discuss further”?

Could it be they have that many weeks on their books they need to do a sales drive to get rid of them?

The other point to remember is that when you buy resale you don’t get all the benefits as you would buying direct from Anfi. See the link to the previous article on Resale Vs Direct.

http://insidetimeshare.com/?s=anfi+resale

It has also been announced that ABC Lawyers Ltd, another Mark Rowe company has bought Lansdown Financial Ltd, a claims company registered with the Ministry of Justice. This is another acquisition following that of Tucola Ltd and Justice4 Ltd, Mr Rowe is certainly expanding, the question is why?

After all, his past is not what you could call squeaky clean, there has been a lot in the press and on TV about some of his past enterprises, Monster Credits springs to mind. By purchasing a company already regulated by the MoJ it does save him the problem of applying to the MoJ for authorisation, then having to pass the competence and suitability assessment, which is not a simple task.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/481751/CMR_Applications_for_Authorisation_Guidance_WEB.pdf

Going back to Anfi, although the courts are closed during the month of August, some staff are still working and issuing sentence papers from cases heard previously, this particular case was heard on 6 July. The Court of First Instance in Maspalomas awarded the former Anfi member 42,625€, again the infringement of the timeshare law was the length of the contract, being over 50 years in duration. So Anfi, do you continue to deny that you are losing in the courts?

So on with this week’s Letter from America.

Link to Karen’s first report.

http://insidetimeshare.com/works-industries-not-timeshare/

Timeshare Advocacy Group™

Secret Shopper Questions and a Secret Shopper Report

two meeting

By Karen Garello, Secret Shopper Coordinator

August 18, 2017

Inside Timeshare encourages its readers to submit positive articles about timeshare experiences, so I was relieved to have attended a positive sales presentation at The Suites at Fall Creek in Branson, Missouri. Unfortunately, the presentation was followed by a less than positive customer service experience.

My Diamond saga began when I purchased a trial Sampler program I had not realized I had purchased until I returned home and saw a $3,995 charge to a Barclaycard. Diamond would not reverse the charge.

http://insidetimeshare.com/works-industries-not-timeshare/

Trying to make the best of a bad situation, I decided to attend a presentation as this is required when purchasing a Sampler. After I returned home from a Branson presentation, I attempted to access Luxury benefits but was denied access. Luxury benefits include luxury hotels, shopping and wine. When I contacted customer services at the Sampler department, asking why I was denied access, the customer service agent put me on hold for a long time while he called Branson. After completing his “investigation” he told me the reason I could not access Luxury benefits is because Branson reported me as a “NO SHOW”!!!

Had it not been for our Diamond Resorts member supported Advocacy Facebook, I probably would not have gotten the sales agent’s name, and I certainly would not have prepared a report.

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

Admitting deceit it seemed, the customer service agent said, according to the notes during the presentation (he initially said I had not attended), I had told the sales agent TK I had complained about the unauthorized charge to purchase the Sampler. I pointed out that I had used my American Express for all the charges I made at The Suites. Customer service said they will investigate further and get back to me.

Now onto my original article

buttons

Many timeshare companies already have Secret Shopper programs. Still, it doesn’t hurt for timesharing member Secret Shoppers to evaluate for other members how near or far a timeshare sales agent ventures from his or her script.

I guess I am not that secret of a Secret Shopper in that my name is on this article, so I hope the good experience I had at Diamond ResortsThe Suites at Fall Creek in Branson, Missouri wasn’t because they were aware of my Timeshare Advocacy Group™ position, Secret Shopper Coordinator. I’d like to give them the benefit of the doubt.

My presenter was TK Armstrong. She used to work for Bluegreen but joined Diamond because she said they have more resorts. TK and I talked for about 45 minutes. I went over my Polo Towers experience. She seemed sincerely concerned. She showed me a description of CLARITY™ Diamond’s new Enhanced Quality Assurance program. She was supportive of the program and said she was going to abide by it. She went over the Sampler product I did not realize I purchased until I returned home from Polo Towers. At least I know what I bought now.

We have three new Secret Shoppers. We will not identify them because they are, well, secret. After compiling over 100 complaints from readers who have reached out to Inside Timeshare for assistance, we have determined the most popular complaints involve the following:

  • Maintenance Fee relief program that do not exist,
  • The ability to sell points or weeks when there is no secondary market,
  • The value of travel awards,
  • Misrepresenting the value of using a credit card to offset Maintenance Fees,
  • Stating a lower loan interest rate can be obtained from a bank or credit union in order to escape high timeshare loan interest rates,
  • Oversold availability

We arm our Secret Shoppers with intelligent questions that, maybe because of being on vacation brain, people forget to ask. These are questions of course that any timeshare consumer can ask, so we share them with our readers. Transparency, honesty and accuracy are rated on a scale from one to five with a five being the most honest. Results are tabulated quarterly and sent to our team for review. After we complete our pilot program, we hope to submit the data to the respective resort for review.

Suggested Questions

  • May I take notes?

Qualifications

  • How long have you worked at this resort?
  • Have you worked at other resorts?
  • What did you do before you sold timeshare?

Consumer Protections

  • May I call my lawyer to discuss your proposal?
  • May I take the contract to my room so that I can have an adequate amount of time to review such a major purchase?
  • Are you a member? May we log onto your account so I can check actual availability and value? I am spending a significant amount of money on something I have not even attempted to use.

Resale or Exit Program

  • What happens if I can no longer use or afford the timeshare?
  • If I can sell it, how can I sell it? Who do I call? Can you give me a reference?

Note: Contact a member of the Licensed Timeshare Resale Broker Association to ask about the benefits or lack of benefits buying on the resale market and to see if they will accept a listing for the timeshare you own.

http://www.licensedtimeshareresalebrokers.org/

Maintenance Fees

  • Please show me in the paperwork the cap on maintenance fee increases. How much does a maintenance fee go up on average annually? Does it go up every year?
  • Can you provide a five year history of Maintenance Fee increases?
  • Is there anything I can do to offset Maintenance Fees?
  • If I can use my points for maintenance fees, how much per point are they credited?
  • Where in the paperwork can I verify this information?
  • If I offset Maintenance Fees with credit card purchases, please provide an example of the value of a $1 purchase and how many purchases it would take to pay off my annual maintenance Fee? (One member reported it would cost over $270,000 in annual purchases to pay a $2,700 Maintenance Fee!)
  • Can I rent my timeshare to pay Maintenance Fees?

Travel awards

  • If I can use my points for hotels, what is the value per point?
  • If I can use my points for airline tickets, what is the value per point?
  • If I can use my points for a cruise, what is the value per point?

Loans

  • Where in the paperwork does it state my loan interest rate?
  • How much will I pay for the timeshare if I carry the loan for the maximum term?
  • Is there anything I can do to reduce my interest rate?
  • What is the interest and penalty if I miss a payment?

risk

If consumers must take out a loan to buy a timeshare, consider carefully the actual cost of financing a vacation at 12 to 18%. America is a buy now pay later society. I don’t think many financial planners would recommend financing a luxury item without comparison shopping. Well over half of the complaints Inside Timeshare has received involve high interest rate financing.

We hope Secret Shoppers create smart shoppers asking the right questions before plunging into a purchase so many of our readers have come to regret. Societal changes are influencing the wants and needs of today’s traveler. Are timeshares more flexible or less if you are locked into usage and maintenance fees increasing annually.

Our first Secret Shopper, Laurie Sabbagh, offered the first Timeshare Advocacy Group™ Secret Shopper report. She reported some good and not so good observations. Of merit is the warning to timeshare buyers to take the promise of travel awards a step farther and ask, “At what value?” In general consumers should buy a timeshare for its intended purpose which is to vacation at a resort. Here is Laurie’s report:

http://insidetimeshare.com/friday-review-news-across-ocean/

Contact Inside Timeshare if you have interest in becoming a Secret Shopper or would like to share a positive or negative timeshare shopping experience. There are several member supported Facebooks and websites where members can reach out to other members to share experiences. Timeshare Advocacy Group™ posts information from all sites. Our motto, courtesy of Jimi Hendrix, is –

knowledge speaks

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

Thanks to Karen for her Secret Shopper part II, also thanks to Irene as usual for the editing and coordination from the other side of the great lake. We have many more articles coming up in the next few weeks with part II of Hug Your Haters and a piece about the Castle Law Group lawsuit with Orange Lake. We will also be having another article from our Antipodean friends from the other side of the world.

So that’s it for this week, have a great weekend and we will be with you next week.

 

 friday dog

 

victory-1

Manhattan Club: $6.5 Million Settlement

It would look like the long drawn out battle between the New York State Attorney General, Eric T Schneiderman and The Manhattan Club is finally over. It was back in July 2014, that AG Schneiderman announced he had obtained a court order halting the sale of timeshares at The Manhattan Club.

As AG Schneiderman put it in July 2014 “Purchasers Duped Into Paying Tens Of Thousands Of Dollars To Become Owners; Later Denied Benefits Of Ownership In Alleged Bait-And-Switch Scam”.

https://ag.ny.gov/press-release/ag-schneiderman-announces-court-order-barring-sales-manhattan-club-timeshare-hotel

They were also subjected to ever rising maintenance fees and unable to book as there was according to the hotel “no rooms available”. It transpires that rooms were being rented out over the internet to non-owners, even though they were told it was for the exclusive use of timeshare owners. This is not an uncommon problem that timeshare owners face, we see the same practice at resorts in Europe.

As part of the settlement, the Manhattan Club owners are not only being forced to sell, they must also give up management control and will be barred from the timeshare industry. This must go out as a warning to other timeshare developers, times are changing, if the industry itself cannot improve itself, then we can see more AG’s taking up the fight on the behalf of owners.

manhatton club

It must also be said that Eric Schneiderman is only one of a hand full of Attorney General’s who actually sides with the consumer, there are many more who are in bed with the industry. This is a list of those who are on the side of the consumer:

Arizona Attorney General Mark Brnovich issued an Assurance of Discontinuance following a probe of Diamond Resorts. A settlement of $800,000 has been awarded for restitution:

https://www.azag.gov/press-release/attorney-general-brnovich-announces-800000-settlement-diamond-resorts

Other Attorneys General have come down on the side of timeshare owners, including:

Colorado Attorney General Cynthia H. Coffman, as reported by Business Den reporter Amy DiPierro, concerning Highlands Resorts in Colorado and Sedona Pines in Arizona:

http://insidetimeshare.com/another-us-attorney-general-exposes-deceptive-tactics/

Tennessee Attorney General Herbert Slatery III settled with Festiva timeshare for $3 million:

https://www.tn.gov/attorneygeneral/news/38312

One AG that is conspicuous by her absence is the Florida AG Pam Bondi.

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

Others that need to be congratulated are the following coalition that worked with the Manhattan Club Independent Owners Group and the NYAG,  they are: NTOA, RedWeek, Sharket and Attorney Douglas Wasser. This goes to prove that by working together nothing is impossible.

Images from meetings of the Manhattan Club Independent Owners Group

image1 image3 image4

Follow the original article by Alison Fox published in amNEWYORK

am new york

http://www.amny.com/real-estate/the-manhattan-club-settlement-includes-6-5-million-in-restitution-ag-says-1.14048559

Article by Inside Timeshare’s  Irene Parker originally published in TheStreet back in September 2016

thestreet

https://www.thestreet.com/story/13653117/2/the-timeshare-industry-has-improved-its-reputation-but-still-faces-scrutiny.html

In Europe we are seeing Spain leading the way for timeshare consumers, the Spanish Supreme Court has now made 57 rulings against the industry, this is unprecedented. This has been largely due to the efforts of one law firm, Canarian Legal Alliance who continue to make Spanish legal history and help consumers to gain justice.

If the timeshare industry is to continue and prosper, it must take note and change the way it sells the product. The owner / member should be the priority, not huge profits for the sake of profit, (could they be the Ferengi from Star Trek)?

ferengi_profit_by_aweswanky-d5du6p4
Timeshare Developer

We have said this before, timeshare is a great concept, it does provide quality resorts, it does suit some, but it also becomes a burden to others.

Inside Timeshare welcomes your comments, if you have a story to share or just want information or advice, contact us and we will try to give you the best answers possible.