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Division of Florida Condominiums

Starting The Week.

We ended last week with a new contributor, Justin Morgan from Australia, along with some of the news from the courts in Spain. In those reports it was mention that the court in Tenerife had found once again against Diamond Resorts contracts. We have been reliably informed of many more cases in the pipeline.

If last week is anything to go by, we are expecting many more sentences being announced over the course of this week. Although, these will be among the last before the annual break in August, where Spain basically shuts down for the month.

Just moving away from Diamond for a change, last October we published an article of a class action lawsuit against Marriott. The case is for alleged “racketeering”, a term we usually associate with the old gangster films depicting the escapades of the likes of Al Capone, not large timeshare and hotel companies.

This the Irene Parker’s update on this story.

The Marriott Racketeering Case – An Update

Not since the Book of Genesis [1:9-10] has the extraordinary feat of creating land from nothingness been chronicled … and Marriott “saw that it was good” for business. (Plaintiff’s response to motion to dismiss)

Moses

By Irene Parker

Some stories tell themselves

July 3, 2017

Timeshare members find themselves with few friends in Florida state legislative and regulatory circles. The Florida Timeshare Division only acted on 110 out of 2,360 timeshare complaints filed from April 2012 to April 2014. In addition, a Florida law passed in 2015, making it more difficult to get out of a timeshare contract, sparked outrage among timeshare owners and advocates. I’m told $70 billion a year flows into Florida in timeshare dollars. That kind of money certainly could buy a lot of power and influence.

http://www.orlandosentinel.com/news/taking-names-scott-maxwell/os-gov-rick-scott-signs-bad-timeshare-law-20150617-post.htm/

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

Paul Brinkmann of The Orlando Sentinel first reported on the Marriott Racketeering case back in May of 2016.

The lawsuit takes aim at Marriott’s points program, which replaced traditional sales of timeshare weeks at specific resorts in 2010. According to the suit, Marriott timeshare customers pay fees associated with owning real estate — such as closing costs and recording fees — but don’t actually own any real estate.

The lawsuit says Marriott timeshare buyers “are being duped into believing they are obtaining title to a real-property interest … when, in fact, they are merely getting a right-to-use license,” the lawsuit says.

Edward Kinney, spokesman for Marriott Vacation Club, said the company will defend itself in court. He said the timeshare industry is highly regulated.

“We sense the people behind this lawsuit have a misunderstanding of how our product works. But we follow every aspect of the state regulatory compliance for vacation ownership sales,” Kinney said. “Everything we do as far as sales are reviewed by the state.”

Fast forward one year later

On May 23, 2017, Governor Rick Scott signed into law SB-818 which amends Section 721.05(21) of the Timeshare Act by adding a subsection (b) to clarify that, for purposes of a “multisite timeshare plan” (e.g., the MVC Product), an “Interest Holder” does not include any person or entity that has an interest in, or lien on, the underlying condominium or property:

https://www.flsenate.gov/Session/Bill/2017/00818/?Tab=BillHistory

Revising the definition of the term “interest holder” to clarify that the term does not include certain parties to a certain multisite timeshare plan; revising requirements for the termination of a timeshare plan; specifying the percentage of votes required to extend the term of a timeshare plan under certain circumstances, etc.

Marriott defendants then submit to the Court

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

This Notice is being submitted to alert the Court to a recent amendment (“Amendment”) to the Florida Vacation Plan and Timesharing Act, Fla. Stat. § 721.01, et seq. (“Timeshare Act”), in further support of the Marriott Defendants’1 and the First American Defendants’ Motions to Dismiss the Complaint (see Doc. Entries 77, 78, and 79, filed September 15, 2016).

Attorneys for the Plaintiffs respond to the request for dismissal (excerpts)

Based on the fact that the FVPTA Amendment (which became effective on May 23, 2017) is so specifically tailored to address a narrow exception pertaining precisely to the particular facts of this case, it is beyond obvious that Defendants (immediately following briefing on the motions to dismiss) railroaded the law through the legislative process.  Defendants’ blatant lobbying effort smacks of impropriety and amounts to an admission that their conduct is not authorized under existing law. Further, it is proof positive that Defendants are willing to use any means possible – including government influence – to mask the unlawfulness of their prior acts.  

Defendants were clever in making sure the FVPTA Amendment was characterized as a remedial “clarification.” Of course, simply calling it a “clarification” does not automatically bestow retroactive application – especially, in this case, where the FVPTA Amendment purports to clarify a long-standing law, enacted over twenty years ago.

An “interest holder” has a legally-binding property interest in the accommodations under the existing law. The definition of accommodation includes timeshare condominiums under the existing law. Fla. Stat. § 721.05(1). Therefore, it would substantively change the existing law to exclude from the definition of encumbrance anything that would be contained in a timeshare condominium declaration.

This makes it clear that the revision was recognized and acknowledged for what it truly is – a substantive change to existing law, creating new categories of exclusions to interest holders and having potential constitutional implications. Nothing in the legislative history, including any staff or committee analysis, provides even marginal support for the conclusion that the legislature intended the FVPTA Amendment to be a mere clarification that would have retroactive application in this case.

Regardless of Legislative Intent, FVPTA Cannot Have Retroactive Application because it will impair Vested Rights in Violation of the Constitution.

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As usual, I contacted timeshare attorney Mike Finn of the Finn Law Group for his take on Governor Scott’s legislative prowess. Our Advocacy group of 84 Timeshare Advocates includes 18 attorneys. Timeshare is extremely specialized so we do not suggest any aggrieved timeshare member seek legal advice from any attorney without real estate or timeshare experience. Mike has assisted several timeshare owners needing legal assistance.

According to Mike,

“The constitution of the United States protects US citizens from Ex Post Facto laws, meaning that you cannot take an act and make it criminal after the fact. You can criminalize that action, but you can only do so prospectively because any actor is entitled to notice that this particular act is now a crime. How unfair it would be to be able to punish someone who had no previous warning that a non-criminal act was suddenly and with no advanced warning or notice made criminal?”

“There is no comparable constitutional protection in the civil arena even though the consequences in suddenly and intentionally changing a civil law while a case is pending, and applying the new law retroactively to a set of facts that resulted in extinguishing an existing and viable claim for monetary damages are essentially identical. Imagine how you would feel as the litigant bringing a claim, after hiring an attorney, filing a lawsuit that was meritorious when you filed it, only to have your case dismissed because the rules of the game were changed after you had filed your case?” “How dishonest!”

Attorneys for the plaintiffs continue

On May 16, 2016, the Plaintiffs (represented by Jeffrey Norton and the law firm of Newman Ferrara) filed a class action complaint against Marriott and First American (“Defendants”) that included numerous claims arising out of hundreds of thousands of instances of unlawful conduct, in which Defendants engaged for over seven years, related to the creation and continued sale and operation of the MVC Trust Product.

In December 2016, briefing on Defendants’ motions to dismiss was completed.

On February 9, 2017, SB 818 was introduced. That bill, introduced curiously on the heels of this action and immediately following briefing on the meaning of “interest holder” (a term having a direct impact on Defendants’ racketeering activity), sought to revise the definition of “interest holder” as it applies to the Florida Vacation Plan and Timesharing Act. More specifically, SB 818 aimed to “clarify” that the term “interest holder” excludes certain parties to certain multisite timeshare plans – a uniquely-focused amendment that appears specifically crafted to address claims in this case.

Three months to the day later, SB 818 was presented to Governor Scott for signature.

And, on May 23, 2017, SB 818 was enacted into law (the “FVPTA Amendment”).  Two weeks

later, on June 7, 2017, the Marriott and First American Defendants (the “Defendants”) filed the

Notice to “alert” the court of the FVPTA Amendment and its purported impact on this case.  

It seems obvious that because Defendants could not justify the legality of their conduct under existing law, they endeavored to change the rules. The Notice is tantamount to an admission that Plaintiffs’ claims are meritorious and that Defendants’ conduct violated the laws that actually were in effect during the relevant time period.

This is not the first time Defendants have endeavored to prevent this Court from considering the claims in the Complaint under existing law. Defendants previously filed a borderline frivolous motion seeking to invoke primary jurisdiction in order to refer the matter to the Florida Department of Business and Professional Regulation, Division of Florida Condominiums, Timeshares, and Mobile Homes (the “Division”), and a stay of the entire matter pending review by the Division.

(Note from Irene: Maybe that’s because only 110 out of 2,360 timeshare complaints were acted on by the Florida Timeshare Division.)

As argued by Plaintiffs, however, it is abundantly clear that the Division does not have primary jurisdiction over the claims in Complaint (and expressly rejects providing advisory opinions in pending litigation.

Parcels of real property do not simply materialize out of thin air by virtue of a statutory definition and nothing in the construction of a timeshare estate’s definition under Fla. Stat. § 721.05(34) supports Defendants’ preposterous construct.

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Whew! That was a lot for the average timeshare member to grasp, but more and more timeshare members are coming forward to learn about what goes on behind the scenes of their dream vacation. Inside Timeshare is hearing from timeshare members on a daily basis crying foul. Thank you to all our 18 attorney advocates as we work together to “take back our vacation” from an industry clearly in need of reform.

Once again Irene explains a difficult subject for us mere mortals in a way that is understood.

Over the weekend Inside Timeshare has received many more stories from some very concerned owners. It certainly looks like the articles we publish are hitting home to many owners, if you have any questions concerns or comments about anything published, contact Inside Timeshare and we will point you in the right direction.

                                                       

 

 

Chicken Soup for Timeshare´s Soul!

Chicken soup is used as a remedy whenever anyone is ill, I remember as a kid if I was under the weather mum or gran would ensure I had a bowl of hot chicken soup. Whether it did any medical good is not clear, but it did make me feel better.

The chicken soup for timeshare is a cacophony of abbreviated names, which many of us cannot work out what they stand for. I will not go for the ones on mainland Europe, for one simple reason, I don’t speak the myriad of languages we have. So here are the ones we have in the UK if you have a timeshare or consumer problem.

Firstly the timeshare ones: we have the RDO, Resorts Development Organisation, this is the trade body for the industry and represents only the industry not the consumer.

TATOC, The Association of Timeshare Owners Committees, this is supposed to represent you the owners, but as we know they are funded by the industry for the industry. Also they are in deep trouble as we saw in yesterday’s article.

Non timeshare organisations:

BIS, Business Innovation and Skills, this is a government department, in the past they are the ones who closed down several “dodgy” holiday clubs.

They also work very closely with TS, this is Trading Standards. Each county council has their own trading standards office, again they have been instrumental in closing down rogue companies.

CAB, this is the Citizens Advice Bureaux, this is an agency run mainly by volunteers who offer advice and information on a variety of subjects. Unfortunately when it comes to timeshare they will refer you to TATOC.

FCA, the Financial Conduct Authority, they deal with anything within the finance world, it is they who lay down the regulations for how businesses such as debt collecting agencies operate.

FOS, The Financial Ombudsman Service,this is a government body who is the last resort in any dispute on financial matters. For instance problems with loan agreement, credit card refunds, including complaints against debt collecting agencies.

There are plenty more but my soup pot is only small, so I cannot fit anymore in, Irene in the her article today explains the numerous ones in the US, this will be of specific interest to those in Europe who have bought in the US. You also have the right to lodge complaints there, even if you live in Europe.

 

A Survey of Administrative Remedies for the Timeshare Owner

Original by Attorney Mike Finn, Finn Law Group

http://www.finnlawgroup.com/learning-center/surveying-administrative-remedies-for-timeshare-consumers-seeking-relief

Peasant Version: An Alphabet Soup of Regulators

Who are they? How can AGs, CFPB, FTC, or the BBB Help Us?

By Irene Parker – February 6, 2017

Board meet

Many timeshare owners have little or no understanding as to how to go about fostering change when business practices have degenerated to the point such practices become harmful to consumers. This article takes some of the mystery out of governmental and nongovernmental agencies offering a blueprint for consumers to follow.

Given recent actions taken by such agencies, and in light of today’s timeshare climate, we look at what’s happening and examine where we can go from here.

The Manhattan ClubNY Attorney General Eric Schneiderman halts sales.

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

Arizona Attorney General $800000 Diamond Resort Settlement and AOD

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

Colorado Attorney General Cynthia CoffmanHighland Resorts and Sedona Pines

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

Tennessee Attorney General Herbert Slatery IIIFestiva $3 million settlement

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

Diamond Resorts Billion dollar lawsuitAlbright Stoddard Warnick & Albright

http://insidetimeshare.com/1billion-law-suit-diamond-resorts-international/

Consumer Financial Protection Bureau Westgate investigation

https://www.buzzfeed.com/matthewzeitlin/financial-regulators-are-looking-into-americas-largest-times?utm_term=.bqeQAdL7#.whk6BDr5

$20 Million Wyndham Whistleblower award to Trish Williams

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

Three former Hyatt sales agents: Whistleblower lawsuit.

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

Clearly, timeshare needs to change, so I reached out to timeshare attorney Mike Finn of the Finn Law Group in an effort to understand how regulatory agencies work. Mr. Finn describes his writing style as “lawyerly”.  In order for me to understand an article found on the Finn Law Group “Learning Center”, I have to rewrite it. This serves as some source of consternation to Mr. Finn, but he on occasion graciously allows me to redact one of his papers so that my fellow peasants can understand the topic.

First: The Federal Trade Commission FTC

The Federal Trade Commission was created in 1914 to prevent unfair and deceptive acts or practices. The FTC does not resolve individual complaints, but provides information about the next steps a consumer may take to resolve an issue.

The FTC looks at fact patterns in an industry. Several (the key word is always several) complaints may indicate a pattern of fraud and abuse which may lead the FTC to investigate and eliminate those unfair practices.

We begin with the FTC, because many states have enacted a portion of this federal act into state law.

profit loss

The Timeshare Cycle

If a consumer encounters a rogue sales agent in the timeshare industry, the experience can be described as a vicious cycle or circle that begins with the oral representation clause used and abused by unscrupulous timeshare sales agents. Consumer complaints beginning with “the salesman said” are sadly told the timeshare developer is protected by the oral representation clause.

In some cases, as in the case of Ralph Marble, maintenance fees escalate so fast the timeshare owner can no longer afford the fee. Mr. Marble was never able to use his vacation plan because of being diagnosed with a medical condition shortly after purchase. His maintenance fees increased from $200 to $684 over eight years.

http://www.clickorlando.com/news/investigators/timeshare-woes-for-one-man-who-tried-to-cancel-after-an-illness

Voluntary Surrenders are on a case by case basis. If a timeshare owner is denied a voluntary surrender, they are often driven into the nets of timeshare “listing” or transfer agents. Some transfer agents are bogus which means the owner thinks they have unloaded their timeshare but have not. If the transfer agent is “legitimate”, the surrendered contracts are bundled 50 to 100 contracts and sold back to the timeshare developer, who in turn resells for full price. Thus the circle is complete.

After a four to seven hour timeshare sales presentation, the beleaguered buyer is poorly equipped to read the mile high stack of documents they are about to sign.

man list

The Consumer Financial Protection Bureau

The CFPB is one of the newest government agencies created in July 2010 partly in response to the mortgage crisis in the late 2000s. The goal of the CFPB is to watch out for American consumers in the market for consumer financial products and services. The timeshare industry utilizes various financing tools in its sales practices and presentations.

The CFPB told me consumers should choose the mortgage option when filing a timeshare complaint, even if there is no mortgage. Timeshare is somewhat new to the CFPB. If the owner does not want to file a formal complaint, there is an option to “Tell Your Story”. I tell the CFPB stories almost every week.

The CFPB does publish the subject and data of the complaint, feeding its Consumer Complaint Database. Most importantly, the CFPB will report to Congress with the purpose of enforcing federal consumer financial laws and writing better rules and regulations.

As more credit card transactions involving timeshare purchases are generated, the credit card financing aspect should not be overlooked for consumers seeking a monetary resolution to their timeshare purchase issues, assuming a credit card was utilized. Diamond Resorts offers a six month 0% interest rate “Barclaycard” offer if the credit card is used to purchase a timeshare. More and more timeshare developers are acting as new credit card originators for third party financial provides such as Bill Me Later (a division of PayPal) Barclay Bank, Bank of America, and a couple of credit unions.

Unlike other regulatory agencies, companies must reply to the CFPB’s complaints or inquiries. Consumers should file their complaints with the CFPB, but expect only a modest resolution and an opportunity to be heard. However, the more complaints the CFPB receives regarding a company, practice, or industry – the more likely those complaints will be presented to Congress. Congress has the power to create new rules and regulations that can improve the market for consumers when Congress reviews and enacts new laws.

Attorneys General or State’s Attorney

An Attorney General (AG) is a publicly elected position. Every state in the US has one. The AG is charged as the chief legal officer for their respective state. The AG’s Office proclaims to protect “timeshare owners by investigating business practices” relating to the sale and resale of timeshare interests.

The AG’s Consumer Protection Division has the civil enforcement authority to investigate and prosecute violations of the state’s Deceptive and Unfair Trade Practices Act. The Division is additionally responsible for the enforcement of the civil provisions of the Racketeer Influenced and Corrupt Organization Act,(“RICO”), which punishes businesses and “enterprises” conducting patterns of illegal activities within a state.

Notably, the AG by law cannot represent private citizens in legal disputes. When a complaint is filed by a consumer, and the AG investigates the alleged misconduct, the AG does not represent the consumer on an individualized basis, but rather the interest of consumers in their state as a whole.

As in the case of the $800000 settlement the Arizona AG reached with Diamond Resorts, if the Division investigates and is successful in prosecuting or settling the action, there is a potential for recovery.

Florida Department of Business Professional Regulation (“DBPR”) state regulatory agency – Division of Florida Condominiums, Timeshares, and Mobile Homes (“Timeshares Division”)

Florida is a timeshare mecca center. The DBPR is an extension of the executive branch of the Governor, and is charged with licensing and regulating all businesses and professionals within the state. The DBPR subdivision relating to timeshares is known as the Division of Florida Condominiums, Timeshares and Mobile Homes (“Timeshares Division”). The Florida Timeshares Division licenses and regulates timeshares through education, complaint resolution, mediation and arbitration, and developer disclosure.

The Office of the General Counsel (“OGC”) of this division represents the interests of Florida residents and does not represent individual complainants. In most cases the Department, even with successful prosecution, does not typically recover money that a consumer has lost. Many consumers rightfully wonder what the likelihood of success would be if they take the time to file a complaint.

Statistically speaking, from April, 2014 through April, 2016, the Florida Timeshares Division received 2,360 complaints. Of those complaints, only 110 resulted in action by the Florida Timeshare Division – less than 5%!

The Better Business Bureau BBB

The Better Business Bureau is not a regulatory agency. It is a nongovernmental nonprofit that serves to promote a community of business that consumers can trust. The BBB does not solve consumer disputes. Success is not based on the outcome, but whether the business responded or not.

The BBB rating rates only how cooperative and responsive a business will be to consumer issues.

National Timeshare Owners Association

https://www.ntoassoc.com/

The National Timeshare Owners Association is a social purpose organization dedicated to educating, advocating and protecting ownership interests. For nearly 20 years, the NTOA has worked to ensure owners have access to resources available to them. As the oldest and largest member based association, NTOA works closely with other industry associations and stakeholders such as CRDA, TBMA, TATOC, CARE and FTOG. NTOA’s extended relationships include 12 domestic and international developers, HOA‘s and management companies. The NTOA seeks to find solutions to some of the industry’s most complex issues.

Summary and Conclusion

What avenues, if any, exist for the unwary consumer who gets pressured into purchasing a $25,000 to $100,000 or more timeshare interest with credit at a 14% to 19% annual interest rate accompanied by a lifetime and beyond maintenance fee obligation? A thriving resale scam industry exists due to the limited and sometimes nonexistent secondary market.  

It’s not until long after the contract is signed, or if the family experiences a life crisis, they learn that the purchase contract often contains no way out. In all likelihood, the perpetual contract was signed in a same day sale, after a sales presentation that lasted for hours. The elderly are targeted, according to several lawsuit allegations.

success

Given recent regulatory decisions and legal actions, a highway of hope is under construction.  

GET INVOLVED!

To perhaps state the obvious, the timeshare industry is a well-organized and wealthy industry that has the ability to lobby for favorable laws and treatment.  Contrast this with the average consumer who is economically stretching to afford a $25,000 timeshare interest.

Contact Inside Timeshare if you would like to learn more about organized efforts to reform an industry badly in need of reform. Thank you to timeshare companies working towards a safer and owner friendly timeshare industry.

We would like to thank all contributors to this article especially Mike Finn of the Finn Law Group.

Inside Timeshare is here to bring you the latest news on what is happening in the world of timeshare, at present we are very much focused on Europe and the US. We are however working on collaborating with writers in Australia, this will bring you the news on a worldwide scale. We would also like to hear from any owners in Australia, New Zealand and South Africa. You can contact Inside Timeshare through our comments section or email direct to [email protected]

We look forward to hearing from you.

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