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Financial Ombudsman Service

chickensoup

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 admin@insidetimeshare.com

We look forward to hearing from you.

Globe flags

end-year

2016 End of Year Review

So here we are at the end of another year and what a year it has been, it started with the relaunch of Inside Timeshare, bringing you truthful information and news you would otherwise not get.

One of our first articles explained what fly buys are, the fact you would get a cheap holiday but be subject to attending a presentation. At this you would be pitched a holiday product of some sort, be it a holiday club or timeshare. The article also warned of the pitfalls of not attending the presentation, either being charged the full accommodation price and in many cases being removed from the resort.

We also highlighted many “scams” that timeshare owners have been subjected to over the years including many new ones. The latest being the article on Litigious Abogados (see links). We also showed how some of the so-called resale companies operate, giving you the reader the information to make an informed choice.

http://insidetimeshare.com/1059-2/

http://insidetimeshare.com/litigious-abogados-update/

http://insidetimeshare.com/litigious-abogados-latest-information/

CLA Logo

Another theme Inside Timeshare published was the on-going woes of Anfi, the first article titled: “The Great ANFI Battle of the Partners”, explained the story of the two partners in the Anfi empire, the Lyngs and the Cazorlas. We then published the story of legal history being made with the very first Supreme Court ruling, this was the case of the Norwegian lady, Mrs Tove Grimsbo and her battle with Anfi. The case was brought on her behalf by Canarian Legal Alliance.

Since that auspicious occasion, Canarian Legal Alliance has gone from strength to strength, securing 36 rulings from the Highest Court in Spain, 29 of these have been against Anfi. Others have been against TasolanPalm Oasis and Holiday Club Puerto Calma, with the ruling against Puerto Calma confirming the Fractional did indeed come under Timeshare Laws. This resulted in around 243,000 Euros being returned to a British client.

There have also been 24 High Court and 21 Local Court rulings against various timeshare companies including Resort Properties / Silverpoint and Club La Costa. Some of these Courts have been in Maspalomas, Arona, Barcelona and Fuengirola. There are approximately 800 live cases in various courts and over 2000 clients. The total claim value is around 80 million Euro, with 117.208.00 Euros reclaimed per month, there are on average 2 to 3 cases per week being heard.

(These figures are what we have on file, there have obviously been more cases, but we have yet to receive an update).

This is certainly an impressive achievement by this law firm, who has in the past suffered from some very negative press instigated by the industry itself. Inside Timeshare congratulates the whole team at Canarian Legal Alliance, including the clients who in some cases have waited years for these results.

Another series of articles have been about MacDonald Resorts and the ongoing battle of Mrs B, now known as Mrs Price. It is a case that has riled us at Inside Timeshare, who are fighting on her behalf. The story revolves around MacDonald Resorts refusal to accept that she no longer owns a timeshare at Dona Lola in Spain, continuing to harass this 87 year old via a debt collecting agency Network Credit Services. This harassment has included threats of court action to recover a debt that is not owed, this case has been referred to the Financial Ombudsman Service. Inside Timeshare will continue to highlight this case until MacDonald Resorts abandon the chase for money. It must also be noted that the RDO, which is the industry trade body has also washed their hands of this company.

In the April article “The Resurrected” a warning was issued about an old company from Fuengirola had come back to life. It is the story of Ramirez and Ramirez, who several years ago were very active in deceiving many timeshare and holiday club members out of thousands for bogus claims. It must be said that very little has been heard of them since.

Mark of excellence

We have also had a few light hearted moments, although they did come with a serious message. In the spoof article “A New Member to EGTBW”, it explained about the trade bodies for the timeshare industry operate. This was extremely fun to write and gave many people a good laugh, the only problem was that it was actually based on fact.

http://insidetimeshare.com/new-member-egtbw/

Back in July we started to publish the ongoing story of the Tauro Beach Project, the fact that irregularities had been uncovered and an investigation had been started by the Guardia Civil Nature Protection Service (SEPRONA). As the story unfolded the Head of The Canarian Coastal Authority had been dismissed and is now awaiting trial for wrong doing in public office and forgery of official documents. Then in August we published the story of the local inhabitants and their homes being flooded, this instigated further investigations which also include the local mayor. The story continues. (search Tauro Beach for further information).

We also teamed up with Irene Parker in the United States, she has provided some valuable information and interesting articles on the world of timeshare across the Great Lake. Below is her latest article.

What Timeshare Owners Can Look forward to:

Timeshare Lawsuits 2017

By Irene Parker,  December 26, 2016

2017

Our Inside Timeshare mission is to offer timeshare owners accurate reporting on both the good and bad aspects of timeshare today. While we admit we bear more to the negative side of timeshare reporting, this thirteen page report from the US Department of Justice listing timeshare scams explains why:

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

The other reason is because the industry is not well regulated. Timeshare owners do not have the level of organization or funds necessary to compete with timeshare developer lobbyists. Lobbyists used to primarily direct their efforts towards influencing lawmakers, but more and more efforts are now being directed towards influencing US Attorneys general:

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

Looking to 2017, we need to look back and reflect on timeshare’s unresolved and continuing legal battles. Timeshare developers, former timeshare sales agents and  solicitors, timeshare owners, federal and state regulators and advocates continue to weigh in on possible changes that will make timesharing more owner friendly and less predatory.

Will the final piece of this legal and regulatory puzzle result in a less aggressive and deceptive industry – or will practices continue unabated and unchecked resulting in more of the same?

round-table

Westgate

Westgate is facing lawsuits in several jurisdictions and a Consumer Financial Protection Bureau Investigation. Allegations include fraudulent and deceptive business practices ranging from high pressure sales tactics, failure to honor timely rescission requests, elder abuse, illegal debt collection practices and impermissible telephone solicitations.” The Capitol Forum June 27, 2016

https://www.buzzfeed.com/matthewzeitlin/financial-regulators-are-looking-into-americas-largest-times?utm_term=.pbyQ8MPbx#.pmA2BeVyM

Colorado Attorney General

Colorado Attorney General Cynthia H. Coffman is suing Highlands Resort, Sedona Pines and twelve other defendants for deceptive trade practices.

Another US Attorney General Exposes Deceptive Tactics.

Wyndham $20 Million

Former Wyndham sales agent Trish Williams was awarded $20 million for exposing deceptive sales practices. While the amount will probably be reduced on appeal, it sends a message that courts and juries are listening.  http://www.nytimes.com/2016/11/25/business/my-soul-feels-taller-a-whistle-blowers-20-million-vindication.html?_r=0

Hyatt

Candace Czarny and two other former Hyatt timeshare agents would like to see the industry improved. They are in year five of a class action alleging deceptive practice.

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

The Manhattan Club

Attorney Douglass Wasser represents 30 Manhattan Club defendants.

“To my knowledge there has been no dismissal of any Manhattan Club proceeding at this point.  The NY Attorney General investigation is proceeding, and the motion to dismiss a currently pending class action suit has been adjourned to January 5, 2017 for now. Three prior class action suits at the Manhattan Club have been dismissed.  But, at least for the time being, the current class action still survives,” Mr. Wasser reported November 15. 2016

http://www.reuters.com/article/manhattan-club-ruling-idUSL1N18U0DL

Marriott Racketeering

“The Marriott racketeering lawsuit seeks to abolish Marriott’s points program, which attorney said is unique among timeshare companies. It also seeks the return of fees and costs paid by buyers.” Paul Brinkmann reported October 13, 2016 for the The Orlando Sentinel.

 http://www.orlandosentinel.com/business/brinkmann-on-business/os-marriott-timeshare-racketeering-20161013-story.html

Diamond Resorts

A recent class action was filed against Diamond Resorts:

https://topclassactions.com/lawsuit-settlements/lawsuit-news/348667-diamond-resorts-class-action-high-pressure-timeshare-sales-deceptive/

Matt Daniel Finazzo, et al. v. Diamond Resorts International Club Inc., Case No. 5:16-cv-02256, in the U.S. District Court for the Central District of California.

holidays-are-hereI don’t mean to be the Grinchess that stole Christmas, so to end on a positive note,

People are listening!

Charles Thomas and I are hearing from people all over the world who are joining forces to work towards:

  • A legitimate secondary market
  • Less aggressive and deceptive selling
  • Less predatory lending

Thank you from timeshare owners to our regulators and lawyers working to protect us. Human leverage and a clearinghouse of information exchange is the answer.

inside final small

So that is the end of 2016, we hope you will join us in 2017 and also help us to get the news out to others. Without your information many of the articles, particularly on possible scam or bogus companies will not be published. So from the Charles and Irene, we wish you a very happy and prosperous New Year.

happy-new-year

friend-or-foe

Timeshare Transfer Agents and Exit Companies: Friend or Foe?

Irene Parker and I take a look at timeshare relinquishment comparing Europe to America. As many Europeans own timeshares purchased in America, it’s useful to have the complete picture. This time she asks the question “Timeshare Transfer Agents: Friend or Foe?

For those not familiar with the term, Transfer Agents advertise offering timeshare owners a guaranteed “deed-back” even if the timeshare program is not deeded. (more on this further on).

In Europe we have a different take on this subject, as we do not have the same model of Transfer Agents like the US. We tend to have resale firms and exit companies, some purport to be legal firms, who for a sizeable fee will relinquish your contract. Many of these companies do both, so the lines can be a ltiile blurred. Although we do have some of the same problems, such as resorts /developers who do not recognise the sale and or transfer.

Here we bring in the ongoing story of two elderly sisters, known as Mrs B. Around two years ago they took up the services of a company  who claimed they would get compensation for them if they joined their “Class Action” group. But in order to do this they had to pay around £5965 to relinquish their two timeshares, one was Oasis Lanz in Lanzarote, the other was Dona Lola Club on the Costa del Sol, run by MacDonald Resorts and Hotels.

Mrs B signed a power of attorney so the company could work on her behalf, all appeared to be above board. After around a year she eventually received notification that her timeshare had gone, both had been transferred / sold to a gentleman for £1 each. Inside Timeshare has all documents relating to this.

Sounds all well and good.

Well, as far as Oasis Lanz is concerned it is, Mrs B has not had any contact from them or received any maintenance bills. The problem is Dona Lola Club and MacDonald Resorts, they will not recognise the transfer. This has now caused a problem for Mrs B and her sister.

They have been subject to threats of legal action by a debt collecting agency, Network Credit Services, employed by MacDonald Resorts. According to them there is £1412.54 (as of April 2016) for maintenance, accrued after the supposed transfer, (this amount increases as time goes on).

So why do MacDonald Resorts not recognise this transfer?

On speaking to Network Credit Services and explaining that the debt was under dispute, Maureen stated that MacDonald Resorts will not recognise any transfer made by this company, because in Maureens words McDonalds just get paperwork back from  saying no longer required”. In other words, there was no actual sale or legal relinquishment. You will see the same in the article by Irene, using a company to take on the transfers.

This case is still ongoing with official complaints about the chasing of this “debt” going through the Financial Ombudsman Service.

Another aspect that is very common in Europe is the “Bait and Switch” tactic employed by many companies claiming to be “resale” firms.

The basis of this method is very simple, the timeshare owner either contacts a company they have found on the internet, or, they have been cold called by. They promise they can sell your timeshare and even give a very high valuation over the phone. Next they arrange a meeting to discuss your options.

Unfortunately there is no resale market, with one company actually stating this, so what then happens?

Simple, in order to get rid of your timeshare you must now purchase another product, be it leisure credits or discount holiday club. At the meeting ( read sales presentation), you are told that the product will cost around £10k to £12k. But don’t worry, we will discount that price for the value of your timeshare, so it will only cost you a fraction of that amount.

This was used to dupe many owners into Club Class and DWVC, where the incentive was the cashback offer. With this you are given a certificate for the value of the timeshare plus the cost of joining the club. In 3 to 5 years, as long as you follow the rules (which were complicated) you could then claim back the value on the certificate. So far we have never known anyone who did get paid out.

But what happened to your timeshare?

For many it was simple, they did not get rid of it, then after a couple of years they found they owned years of back maintenance. The timeshares were not transferred or relinquished, they are still liable for the maintenance and still own it, causing many a stressful situation with debt collectors.

So, let us look at what the situation is in the USA.

Timeshare Transfer Agents: Friend or Foe?

dollar    By Irene Parker November 20, 2016

Lately, a company by the name of Resort Release has been running an ad on my Facebook feed. It is always frustrating to invest time and energy campaigning to improve the timeshare industry, only to have companies we don’t approve of take out ads promoting their service. At least Inside Timeshare can control who posts on their site.

Transfer agents advertise offering timeshare owners a guaranteed “deed-back” even if the timeshare program is not deeded. The upfront fee ranges from $3500 to $7000 or more. Contracts taken back are “bundled” 25 to 50 and sold back to the developers, similar to what happened during the worldwide subprime mortgage crisis. The developers resell for full value.

What else can happen to the points or weeks or “inventory” recovered?

According to Greg Crist of the National Timeshare Owners Association,   

“There are basically four buckets that transfer companies often attempt to put inventory into…

Bucket 1 – Works with an inventory broker who may or may not have a direct inventory recovery agreement. *Branded properties only

Bucket 2 – Lists timeshare properties on eBay and Craig’s List for $1.00

Bucket 3 – Transfers to “Mules” *Foreign Nationals who may be judgement proof

Bucket 4 – Transfers to Companies who later dissolve the corporation administratively. *Leaves resort pursuing a clouded title, doubling recovery costs and impacting association’s bad debt line, which all remaining owners on the roster end up absorbing.”

saleman

Keep Reading

bbc-scotland

BBC Scotland Investigates the Problems of Timeshare Contracts.

On Monday 24 October BBC Scotland broadcast an investigation into the problems people have in getting out of their timeshare, especially the elderly.

It highlighted an elderly retired couple from Scotland who purchased their timeshares from a company that is now owned by MacDonald Resorts and Hotels. The company is now owned 50% by HBOS Group (Bank of Scotland and Halifax, part of the Lloyds Banking Group) and 50% by Donald MacDonald. They originally purchased at the Dona Lola Club in Spain, when their children were young. But as we have seen on many occasions, ill health prevents them from travelling, especially abroad, because of the problem of the increasing cost of travel insurance.

mcdonald logohbos

They have been trying to “relinquish” their contract for around two years, but the resort management, MacDonalds, want them to pay over £3000 to relinquish their two weeks. Even after they have paid their maintenance every year since purchasing. They are still trying to negotiate with MacDonalds, but are still paying £1600 maintenance each year.

This is not a new story to Inside Timeshare, we have the story of Mrs B, who used another company to “get rid” of her timeshare at Dona Lola, she is 83 and also in ill health and unable to travel. Like many others she paid her maintenance every year without fail, even though for the past ten years has never used it, Mrs B and her sister could not even travel to any of the UK resorts.

When she eventually paid another company to get rid of it for her the trouble started. Inside Timeshare has copies of the documents that show her timeshare has been transferred to another person, but MacDonalds refuse to accept this and say she owes maintenance. They have even instructed a debt collection agency, Network Credit Services, to chase for the the £1412.54 they say she owes. She has already received a final demand to pay within 7 days or face court action.

Inside Timeshare has helped her to formulate an official complaint to the Financial Ombudsman Service to try and resolve the matter. This is still underway, yet it is that time of year when new maintenance bills will be falling on the door mat.

old-lady
How much!

MacDonalds stated in the programme:  “We’ve been widely praised for pioneering the introduction of a practical exit mechanism for owners. In fact, 90% of resort owners voted in favour of amending their resorts’ constitutions to formally adopt these fair and reasonable proposals”.

Well the proposal to be able to get out was not what you could call fair, it required at least 4 years payment of maintenance and was limited to every 2 years with first come first served.

In the next comment MacDonalds also stated: “However, it would clearly be detrimental to the upkeep of the resorts and unfair on the remaining resort owners if people were allowed to walk away from their contractual and legal obligations without some form of reasonable recompense which allows for the quality of facilities at the resorts to be maintained for future generations”.

This last statement clearly shows that MacDonalds are not interested in the owners apart from the continued collection of fees. So what is the reason for this statement?

It is quite simple, MacDonalds are a management company employed by the resorts, to run, maintain and collect the management fees. They actually own no property, like most of these large companies, i.e Diamond and Diversified. In the past MacDonalds with the backing of TATOC, changed the members from fixed weeks to a points system, when doing this they effectively took control of the resorts. By taking over the fixed weeks, MacDonalds become responsible for the maintenance fees on those weeks, with you the points owners paying a hefty increase in your charges.

By allowing people to hand back their ownership, with no prospect of new clients purchasing what is now a very expensive way to holiday, it will cost them. After all MacDonalds does not want to use their own money.

Another point to the broadcast was the problem of using other companies with their promises of “resale”. One company interviewed was one Inside Timeshare has highlighted in past articles, Sellmytimeshare.tv and Monster.

The BBC sent an undercover reporter, Fergus Muirhead, he contacted Sellmytimeshare.tv about getting rid of his mothers timeshare. Over the phone he was given a valuation of £9,400 with an invitation to meet with the company face to face.

undercover

He stated that it was obvious that they had no intention of paying him that amount from the outset of the meeting, with Sellmytimeshare telling him “We can’t sell the timeshare because no one’s buying them so we certainly can’t get that money back for her.”

He was then given by the advisor a series of figures, which had to be paid upfront on the day, this was for thousands of pounds. He was told he would be given “credits” which could be used as part payment for goods or even be sold.

Fergus stated that if he held them for 14 months, he could sell these credits for £17,216, which covered the £9,400 and the £6,700 he was going to pay upfront. It was also not clear as to how the timeshare would be disposed of.

The programme also interviews Stephen Boyd a lawyer with experience of timeshare law, he is also a partner at Athena Law. He said he had around 300 clients and was in the process of instigating a legal action against Sellmytimeshare.tv and Monster Travel Group, the parent company.

He stated: “My clients were told by this company that they could get rid of their timeshare, but when they went to a meeting they had to buy another product and they were promised a financial return.

“They’ve also found that the promised financial return never materialised and in many cases they’re still liable for the maintenance fees of their timeshare.”

When asked for a reply the spokesperson for Monster said:  “Customers seeking advice from us about relinquishing their timeshares are informed of the options available through us and are free to choose what they consider best suits them”.

“One of those options includes the purchase of a Monster Rewards Bundle, which can be redeemed against an increasingly wide range of goods and services, including travel”.

Follow the link to the full article on BBC News.

http://www.bbc.com/news/uk-scotland-37690840

Recent Inside Timeshare articles.

http://insidetimeshare.com/monster-credits-associated-companies-summary/

One thing is clear from all this, it is the owners of the timeshares who are suffering, not just from the timeshare companies but those who say they will sell them for you, only to sell you another product. Remember the Club Class and DWVC pitch, we will take your timeshare from you if you join our club, we will then give you a “Cashback” certificate for the value of the timeshare and the cost of joining. This was to last either 3 or 5 years, at which point you claimed from the cashback company supposedly the value on the certificate. Guess what, no one ever did and in most cases they still were liable for the maintenance fees.

Timeshares are not worth anything, they lose value the moment you purchase, even in the USA as we have seen from recent articles, they sell only for a fraction of the original cost if at all. So the warning here is do not believe it when you are told you timeshare is worth thousands, check out ebay, they can’t even give them away.

If you require any further information about this or any other matter, or need any help in finding out about any company you may be thinking of doing business with, Inside Timeshare will be pleased to help. Remember being forewarned is being forearmed.

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