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Finn Law Group

alone

The Tuesday Slot with Irene

In this week’s Tuesday slot Irene Parker looks at another military family who have fallen foul of deceptive sales practices. As usual Irene sent a draft of the article to Bluegreen for comment, at the eleventh hour, Bluegreen responded.

They have offered to cancel the loan, so fair play to them, Inside Timeshare thanks Bluegreen for taking note. The article has been changed in light of this, but is being published as a warning to other consumers to be aware and do their due diligence. Irene will also be writing a follow up article on Bluegreen’s response to the BBB.

Another Military Family Wages War against Timeshare

Will Bluegreen Honor those whose sacrifice is so great?

Terry and Linda Carter

soldier

By Irene Parker

December 12

Terry Carter served his country in Iraq and Afghanistan. He was discharged for medical reasons. Burdened with caregiving, Linda Carter reached out to Inside Timeshare for help. The family alleges they were sold a Bluegreen timeshare by deceit and a “bait and switch” told the timeshare would be easy to sell for a profit.

After filing a Better Business Bureau complaint, Linda was informed December 11, 2017, their loan would be cancelled, but they would not receive a refund. One reason listed was because they had used their points. What does use of the points you had been paying for, have to do with being told you bought the timeshare on the promise that the points would be easy to sell? This is one of the most common complaints voiced by our readers.

The oral representation clause included in all timeshare contracts states: “I did not rely on any oral representation to make my purchase.” This translates to “Never believe anything a timeshare sales agent says.” The family tells their story hoping to warn others to think twice before buying any product that can’t be sold, or if sold, brings only pennies on the dollar.  

Linda was initially upset because she thought a loan cancellation would only stop the phone calls, but the hit on their credit would prevent them from obtaining a loan through the VA to buy a house. The representative ended their conversation saying she would love to help them book a vacation though! Linda was astonished. Terry has been diagnosed with blood cancer common among vets living near a burn pit.

I told Linda about the class action lawsuit Mike Finn of the Finn Law Group initiated that resulted in over 11,000 Bluegreen members getting foreclosed changed to “charged off” on their credit report.   

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

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

A lifetime is a long time to bet nothing will happen to make the timeshare unaffordable. Inside Timeshare has heard from 237 angry and desperate timeshare buyers of which 222 allege they were sold or up-sold by deceit and bait and switch. Almost all allege they were told their points would be easy to sell.

Terry’s story

After 9/11 Terry volunteered to go to Iraq. He was close to retirement so he felt it was the last thing he would be able to do for his country. After he got in country, he again volunteered with six other guys to be on a team deployed to Basra where the British had a FOB.

A forward operating base (FOB) is any secured forward military position, commonly a military base, used to support tactical operations. (Wikipedia)

Terry was the lead man for the C-RAM program.

C-RAM: Counter Rocket, Artillery, and Mortar, abbreviated C-RAM or Counter-RAM, is a set of systems used to detect and/or destroy incoming artillery, rockets and mortar rounds in the air before they hit their ground targets, or simply provide early warning. (Wikipedia)

He and his guys would monitor incoming fire. Basra was one of those places where they were the only Americans so it was hard to get medicine and supplies. Terry and the guys lived in tents next to burn pits where the British burned anything that could be burned. He received a letter stating that he lived next to the pits.

Then there was Afghan. Terry was there for eighteen months until he was sent home after a diagnosis of blood cancer. He also served twenty years in the National Guard. Terry is 55 years old.

I really don’t know what else to say – he lived army ‘til he couldn’t anymore.

thankyou

Terry and Linda

There are two more words to say.

Linda and Terry’s complaint sent to Bluegreen November 16, 2017

We were told in Gatlinburg at a group presentation that Bluegreen points were an investment and could be sold for a profit. My husband was diagnosed with blood cancer in 2014. We can no longer afford the timeshare and now know the agent lied about being able to sell Bluegreen points. We are not concerned that we cannot make a profit as the agent claimed, but have learned Bluegreen points are virtually worthless should a member need to sell. Bluegreen agents should not sell points based on the points being an investment. There were several in the room who heard this claim as it was made in the group presentation and in our individual meeting. Also, Cammie said all we had to do is when we got back home was go to our bank as we wouldn’t have a problem getting a lower interest rate. This was not true. Banks will not finance timeshare. Please help us.

Linda Carter

Thank you to Linda and Terry for sharing their story. Our advocates feel that until deceit and bait and switch on the front end of the timeshare sale is acknowledged and addressed, nothing will change.  

Business etiquette advice for customer service representatives (Article link not included as the article had “We Buy Timeshares” ads all over it)  

  1. Return calls promptly. Respond to messages as soon as possible, especially if the issue is time-sensitive. If the phone message relates to a complex issue that will take time to assess, have the courtesy to touch base with the person, acknowledge receipt of the call and let them know you are working on gathering the specific information. When possible, provide a timeline for when you will get back to the caller. For example, “I received your message inquiring about when our next shipment will be available. I have several phone calls in to our distributors, and I anticipate hearing back from them at the first of the week.”

customerphone

Inside Timeshare does return phone calls and emails promptly. Contact Inside timeshare or a member supported self-help group if you have a timeshare concern or would like to share your story.

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

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

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

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

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

 

If you have any comments about this or any other article published, or you are looking for help and advice on any timeshare related matter, contact Inside Timeshare. We are here to give you the truth and the best advice possible.

  

 

capone

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

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

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

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

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

Now for Irene’s article.

marrioot symbol

The Marriott Vacation Club Racketeering Lawsuit – an Update

Timeshare Wars – Members vs Developers and ARDA Part II

evolution

November 28, 2017

By Irene Parker

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“Engineering the Law” Politico

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Marriott Inside Timeshare July 2017

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

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

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

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

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

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

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

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

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

 

vulture

The Tuesday Slot: An American Perspective and Comparison.

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

puerto rico

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

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

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

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

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

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

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

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

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

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

Witch

Part I – Puerto Rico and Timeshare Debt

Is Apollo Global Management involved with both?

By Irene Parker

Part II Friday November 17  

The Effect of Debt and Inventory Evaluations on Timeshare

By Contributors Justin Morgan, Australia and Michael Nuwer, US

November 14

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

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

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

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

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

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

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

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

Munis Meet Milken as Hedge Funds Dictate Puerto Rico Terms

Laura J. Keller

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

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

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

Vulture activity in Puerto Rico: Excerpts from Hedgeclippers

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

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

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

argentina

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

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

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

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

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

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

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

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

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

money man

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

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

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

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

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

We seek to provide Diamond Resort members a way to proactively address membership concerns; to advocate for timeshare reform; to obtain greater disclosure from the company; to advocate for a viable secondary market; and to educate prospective buyers.

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

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

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

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

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

not alone

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

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

 

class action

The Tuesday Slot with Mike Finn

Today we publish the article by Mike Finn, which was postponed from last Friday’s Letter from America, it is the second in his series on Class Action Litigation, Part 1 looked at Arbitration. Tomorrow we publish a rather interesting article which compares two different industries, but surprisingly they operate in a very similar way.

Well it is that time of the year, the sound of envelopes containing your maintenance bills dropping on the mat. How much will they have gone up by this year, we hear you asking?

To be honest, one question we often ask, is what the hell do they spend this money on, after all our resort hasn’t had a facelift in decades. The tiles round the pool are still damaged, the bed covers are the same as when we bought 30 years ago. Even the sofa bed is still falling apart!

It would seem that they don’t spend it on maintenance, it goes on their profit line, so what can you do about it? Not a lot, you’re tied into perpetuity contracts, there is no resale or secondary market, yes, you are stuck in a rut with no way out.

Well not quite, things are changing, back in June Business Wire, published news of a lawsuit filed by Finn Law Group against Diamond Resorts. The suit was about maintenance fee practices and alleges maintenance billing practices were fiduciary duty violations and breach of contract. Follow the link below.

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

In Spain at least, owners do have a way out, many of the contracts are illegal under Spanish timeshare law, so those owners can take their case to court. Not only do they get their money back, but more importantly their contracts are declared null & void, leaving them timeshare and maintenance free!

So, on with today’s article.

CLASS ACTION LITIGATION

Misunderstood by Timeshare Consumers

post it

By Mike Finn of the Finn Law Group

October 31, 2017

Part I – Arbitration – The Question Timeshare Buyers Never Ask

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

We all know a little bit about class action lawsuits, many of us have even received a letter or postcard advising us that we may be potential class members. Many sense that our individual recovery may not be worth the effort.

A timeshare purchase could be a horse of a different color. The beauty of a class action is that, as a class member, you wouldn’t have to actually hire the lawyer – he or she would be paid from the proceeds of the case assuming it is successful. As a lawyer with some class action experience, who has primarily represented consumer timeshare owners over a considerable period of time, I can report to you that class actions do play a role in consumer timeshare practice. That role, however, is more limited than we would like it to be.

The explanation lies with the kinds of cases that can be effective class action cases, especially if they are timeshare related. Most of our clients tell us that they were deceived during their initial timeshare presentation. They relied upon the veracity of the sales staff and only later, when they attempted to utilize their timeshare, did they learn the truth of their purchase. Of course, this realization did not come during the rescission period provided by law, which varies state to state. Instead, the hapless owner came to realize too late that the resort would not help them, and that the purchase contract they signed is legally binding, and that, in the absence of a viable resale market, there is no exit scenario built into the contract.

Essentially, they committed themselves to a lifelong obligation!

The above scenario, repeated over and over with some variation on the theme, is the “staple” fraud-in-the-inducement file we see at Finn Law Group on a daily basis. Per our own internal analysis, these matters occur with amazing frequency, mainly because of the manner that the timeshare product is marketed.

In nearly all instances, the salesperson assigned to the prospective customer is purely commission based. Top sales staff can make a very good living, but they must maintain a high closing rate to do so. This methodology puts the salesperson into a conflict, with ethical considerations competing against their own financial needs. With direct compensation incentives providing temptation, sales staff may well significantly embellish the advantages of timeshare ownership over the course of the three to five hours they often spend with their sales prospects. After this long sales process, the interested prospects are then immediately ushered into the closing aspect of the transaction, attended by different members of the sales team known internally as “closers.” These closer’s shepherd the prospect into and through the closing process. No prospects are ever given the opportunity to take the presented documentation with them for review or consultation with an attorney pre-execution. It’s all completed on the same day and that is by careful design. Given the mountain of paperwork processed at a timeshare closing and the relatively short amount of time a consumer has (or takes) to read and understand the finer points of the transaction, it is no small wonder that what one legally agrees to via their signature, compared to what they were told they were contracting for, are often diametrically different from one another.

A buyer spend hours with a sales person who is motivated to tell you, “yes,” your purchase does include that feature only to discover later that nowhere within those mounds of paperwork you signed and initialed is there any reference to the feature or features your salesperson assured you were included. To add insult to injury, one of the contractual clauses that was not pointed out to you was a clause that states that the purchasers did not rely on any oral representations when making their timeshare purchase decision.

Imagine a salesman knowing that clause exists resisting the temptation to increase his or her income!

magic box

I call that provision the “salesman’s license-to-lie” clause and I can say with pride that I was so quoted in the New York Times! So, we have now isolated one of the more frequent legal issues with the typical timeshare purchase, and we have identified the possible legal cause of action that applies, which lawyers call “fraud in the inducement.”  

From this, a remedy becomes readily apparent: The contract should be rescinded, because the purchasers didn’t buy what they were told they were purchasing by the sellers. Herein lays the rub, however. Should fraud in the inducement be raised in litigation, the developer will undoubtedly counter by claiming no such acts ever occurred, as it’s unlikely that the salesperson, if called as a witness, will admit they promised items not contained within the preprinted contract.

When combined with the salesman’s “license-to-lie” clause, this makes the plaintiff consumer’s case far more difficult to win – recall that the burden of proof rests with the party bringing the action. As the consequences of losing the case may mean the loser pays the winner’s attorney fees and costs, the wisdom of pursuing such a case for any one client becomes questionable, especially if the odds are no better than 50-50.

It’s tempting for a lawyer to look into the possibility of filing class action litigation for fraud-in-the-inducement claims for an entire class of timeshare buyers who have purchased a timeshare interest under the false impression that more attributes were being purchased than what were actually acquired. Surely, if everyone reports a similar purchase experience, the court will conclude that all of these purchasers couldn’t be wrong; and therefore, that the developer must be knowingly encouraging its staff to make false assertions to increase sales?

At this point we must pause and examine the state of the law to understand the legal conclusion that most courts have reached on this matter, with the sad fact being that, for the most part, courts have not considered fraud to be the type of case that belongs in a class action scenario.

The best explanation I can provide as to why the courts have adopted this position is that the elements of fraud – the actual deceit perpetuated with the intent to deceive – are all very individualized factors. The underlying facts of which will, by definition, vary with every individual timeshare presentation and by each individual timeshare salesperson. Therefore, each separate sales experience constitutes a new and separate set of facts to be evaluated. Courts are loathe to combine individualized sets of experiences, wherein every class member theoretically would have suffered the same level and severity of deceit and conclude that all members equally relied upon these separate individualized deceptive statements to their detriment.

In short, these fraud-based claims in the timeshare arena are not, in the foreseeable future, going to become actionable timeshare-based class actions. Of course, individual actions are still possible and we are aware of recent individual litigation that ended quite successfully for the consumers. Again, however, any owner considering individual litigation based upon a theory of fraud had better be aware that their battle will be costly and the ultimate results unpredictable.

So, is class action litigation just another pretty face with no significant place in the timeshare arena?

Decidedly not! Finn Law Group has successfully initiated multiple class action litigations against timeshare resort developers. In one concluded case, more than 11,000 former timeshare owners saw foreclosure entries on their credit reports purged, and more than two thousand others received extended vacations at no cost.

Other class cases are currently pending. View:

https://www.finnlawgroup.com/english/active-litigation

In conclusion, class action litigation isn’t going to, on its own, repair the underlying problems with timeshare ownership, but it will make a dent. More importantly, it will continue to serve notice to the timeshare development community that someone out there is paying very close attention to them, and that can’t be a bad thing.

law book

Thank you Mike, this certainly explains class actions for us, in Europe this type of litigation is not common, most cases are done on an individual basis. We have seen some class actions, most notably against Barclays Partner Finance, who provided loans for illegal timeshares. Another of note was the RCI class action, which ended up at the High Court London. This was a bit of a shambles to be honest, although the court agreed that RCI had used banked weeks for rental, the members did not lose out financially, so no compensation was awarded. Unfortunately those who took part in the “No Win, No Fee” action, may now be left with all of RCI’s legal costs. The decision from the court is still to be announced.

If you have any questions regarding this or any other article, contact Inside Timeshare, we will be pleased to help.

 

questions

The Tuesday Slot: Arbitration

Today we feature excerpts from  Chris Parker, a writer from City Pages and his article called The Plot to Kill Consumer Protection

Continuing on yesterdays topic of “Bogus” claims companies and “Fake” law firms, Mindtimeshare  has also highlighted another company, European Liquidations.

Again this company uses the @consultants.com email address, which as we have said previously it is just a free email provider just like gmail and yahoo.

europeanliquidationsltd@consultant.com

The telephone numbers provided are:

0203 384 3999 and Fax – 0872 751 6998

Unfortunately, Mindtimeshare has very little information and we have been unable trace any company with this name at company house. But it is important to inform readers of all companies that crop up along with telephone numbers and their email address, after all to be forewarned is to be forearmed!

As this article was being prepared Canarian Legal Alliance issued another court ruling, this was from the Court of First Instance in Maspalomas against Palm Oasis (Tasolan). In this judgement the court ordered the return of over 15,000€ plus all maintenance fees and legal interest, the contract was also declared null and void.

The court ruled that the contract infringed Law 42/98 in that it was for a period exceeding 50 years, Contract to be valid must be for a period of between 3 and 50 years, this should also be specified in the contract and explained to the client before the contract is signed. It is clear the Supreme Court rulings are having a severe impact on all contracts that do not follow the stipulated laws.

Now on with today’s article.

Part I – Questions a Timeshare Buyer Never Asks

Does this timeshare contract contain an arbitration clause?

arbitration

By Irene Parker

Part II – Class Action Lawsuits – Misunderstood by Timeshare Members

Friday’s Letter from America

Tuesday October 24

Excerpts from “The Plot to Kill Consumer Protection”

By Chris Parker

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

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

“The right to have your dispute resolved before a jury of your peers is as American as it gets; it’s a fundamental core American democratic principle,” says Minnesota Attorney General Lori Swanson. “To think that millions upon millions of consumers are forfeiting their fundamental right to have their day in court because of fine print in a contract….” “Though arbitration may sound preferable to the expense and anguish of court, it hands a major advantage to companies. The costs savings aren’t much: Arbitrators usually charge $300-$400 per hour minimum, and some bill into the thousands of dollars. But arbitration clauses typically bar the consumer from joining class-action suits. The strategy has emboldened fraud on a massive scale.” “In July, the Consumer Financial Protection Bureau ruled that arbitration clauses can’t bar consumers from joining class-action suits. The GOP Congress intends to repeal the rule.”

Sen. Lindsey Graham (R-South Carolina) told the Wall Street Journal that such clauses are “a windfall for the companies, in terms of how you settle their cheating.”

“Even when someone does challenge them, arbitration rulings are usually private, with no appeals and little documentation. Like a tree falling in a vast forest, Wells Fargo’s customers didn’t hear the millions of other victims, and the press remained none the wiser.”

“With consumer protection increasingly whittled away by keen lobbyists and cunning corporate lawyers, the idea was to build an agency whose sole mission was protecting consumers.”

cfpb1

“During its brief life, the bureau has established itself as the only Washington agency more responsive to consumers than to lobbyists. Since 2011, it’s handled 1.2 million complaints, returning over $12 billion to consumers.”

The CFPB and Timeshares

By Irene Parker

The Consumer Finance Protection Bureau has also been the first line of defense for timeshare buyers alleging they were sold or up-sold by deceit and bait and switch. Given the staggering number of reports of deceit and bait and switch on the front end of the timeshare sale, if the CFPB is regulated out of existence, widely predicted, many timeshare members feel the only court that will be left available to them is the court of public opinion, warning unsuspecting consumers as to the minefield of ways the evolution of right to use timeshare points has opened the doors for unscrupulous timeshare sales.

Our standard disclosure is that not all timeshare sales agents are deceptive and not all timeshare companies are predatory.

http://insidetimeshare.com/lesson-timeshare-companies/

I asked ever assessable timeshare attorney Mike Finn of the Finn Law Group which timeshare developers have an arbitration clause. Diamond Resorts is the only major developer that I’m aware of that has the arbitration clause,” explains Mike. I spoke with other attorneys who say the same.

Banks and other lenders can pick arbitrators. As Minnesota Attorney General Lori Swanson expressed –

shark

“We heard from arbitrators that were blackballed and essentially told, ‘You’re not going to be an arbitrator anymore because you’re ruling for the consumer,’” she says. “That’s one of the problems with arbitration. The court system is paid by the taxpayers. Judges are neutral and their funding comes from the public.” City Pages “The Plot to Kill Consumer Protection”

A common comment on complaint sites and from 170 Inside Timeshare readers reaching out to us for assistance is, “Let’s get a class action going!?” Timeshare members typically confuse the term and substance of a class action. We’re all used to class action ads on television say, for example, a medical device failure. The difference with timeshare is that damages are not uniform, which is necessary for a class action. Some lawyers may call a lawsuit a class action on behalf of only one or two plaintiff class representatives but they are more like individual lawsuits. Real Class Actions involve hundreds or thousands of plaintiffs. More later,

Part II – Class Action Lawsuits – Misunderstood by Timeshare Members

By Mike Finn of the Finn Law Group this Friday’s Letter from America

Why will timeshare developers not acknowledge the flawed business model?

Out of 170 complaints received, 155 of our readers allege they were sold a timeshare by deceit and bait and switch. The contract is perpetual, accompanied by rising maintenance fees. With some of the more gestapo orientated companies, the member cannot sell or give back their timeshare. The problem is magnified when the buyers succumbed to high interest rate loans and higher interest rate credit cards.

We believe Social Media and media outreach is the tortoise chasing the hare. Timeshare default rates are rising and original buyers (like me) are not getting any younger. Inside Timeshare continues to be there for members and advocacy Facebook pages and websites are on the rise – helping members through the 3Rs or F of Timeshare – resolution, when possibly the member just did not understand how to use the program, refund, relinquishment or foreclosure. In America, there is no debtors’ prison, except in the case of refusing to pay child support.

We ask timeshare developers – What would happen to the primary residential home market if home buyers could not sell their property?

think about

Self-help Facebooks

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

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

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

Thank you Irene and Chris, also a big thank you to Tammy for proof reading and editing these articles.

As always if you have any comments or would like to share your experiences, Inside Timeshare welcomes them, contact us through our contact page.

If you need help or advice on any timeshare matter do get in touch and we will point you in the right direction. Remember before engaging with any company do your due diligence and your homework, it will save you a lot of bother in the end.

diligence

letter from america

Friday’s Letter from America

It’s time for another Friday’s Letter from America, with the recent hurricanes in the Caribbean and Florida, many owners and members have been asking how the damage affects them. Mike Finn of Finn Law Group explains this, with an introduction by Inside Timeshares very own Irene Parker.

Michael-D-Finn2
Michael D Finn

But as usual we start with some news from Europe, it has been a little quiet on the court front this week, with only three announcements made public.

All three involve the Tenerife based company Silverpoint, the first was at the High Court where the judge declared a contract null & void. He also ordered the return of over £40,000 plus legal interest. As usual the contract was over 50 years, deposits paid within the cooling off period and the contract did not contain the correct information required by law.

The second case against Silverpoint was from the Supreme Court in Madrid, once again this court upheld its previous judgements. The client in this case receives over 104,000€ plus legal fees and legal interest. They are also timeshare free.

The third case was another Supreme Court judgement against Silverpoint, this officially confirms the number of rulings by this court at 66. Again the contract was declared null and void, with the client awarded over £89,000 plus legal fees and legal interest.

Many readers this week have been contacting Inside Timeshare about ABC Lawyers, Timeshare Lawyers, Timeshare Compensation and off course the “new” Mark Rowe product Jive Hippo. (Not a name that conjures up confidence). Not to forget he also owns the TCA (Timeshare Consumer Association) and TimeshareTalk.

The comments from these readers have not been what you might call promising. Remember these companies are all owned by one person, who himself is an ex timeshare sales manager (Silverpoint / Resort Properties), turned gamekeeper. As with any company you may contemplate any business with, it pays to check, check and check again before you commit.

Amador Galeca Abogados, have been at it again, this time Andrew Cooper was named as the director of Personal Travel Group. Again he is pleading guilty. Now remember, Personal Travel Group was the successor to Incentive Leisure Group, owned by the late Gary Lee, of Timelinx and Designer Way Vacation Club fame. His partner Kim Bambrough also ran the call center at the old ILG office in Fuengirola, so Andrew Cooper had nothing to do with it all.

On the subject of this “FAKE” law firm, last week we reported that one reader managed to get their money back which they paid via bank transfer. It turns out that their banks fraud department managed to get this back from Deutsche Bank, where it was paid into the account of the “Procurador” Graham Ingum Gorrin.

We have also been informed that Sutton Hall have placed the information supplied to our reader on their members website, at least now the word is getting out.

So on with this week’s article.

How do Natural Disasters Affect my Timeshare?

natural disaster

What if a Timeshare Resort Suffers Damage?

By Mike Finn of the Finn Law Group

https://www.finnlawgroup.com/learning-center/what-if-timeshare-resort-suffers-damage

October 20, 2017

Introduction by Irene Parker

Given the severity of recent hurricanes, fires and earthquakes, Timeshare Advocacy Group™ has been receiving questions from concerned timeshare owners and members.

Of note are the relevant differences that come into play for right to use point programs compared to fixed week timeshares. Fixed week timeshares are defined as real estate, so the fixed week owner has the same problem as the owner of a primary residence. If a primary residence is demolished you may not be able to occupy the premise. Alternative lodging must be arranged and rarely does insurance make the owner whole again.

Do right to use point programs offer more protection?

In some ways, I think yes. The advantage of a fixed week timeshare is that you know what you own. You can see, feel and touch the week purchased. In a disaster however, that same benefit can work against the owner.

I contacted a team member at one resort. The company has property on St. Martin. The company’s right to use point owners are being refunded points for forfeited stays, but the company’s fixed week owners must book in other locations through an exchange service, and are unable to book St. Martin until 2020. Still, fixed week owners are fortunate to have this option because the owner on the other side of the exchange would not be able to stay at the owner’s demolished resort. Overall, industry insiders I contacted feel point members may have a layer of protection over fixed week owners when a disaster affects a single resort.

Does this mean right to use programs are better or safer overall?

Finn

Depending on vacation goals and lifestyles, right to use points may be the right choice. The Federal Trade Commission offers good advice. Of the points presented, the most important pieces of advice are:

  • Research the track record of the seller, developer, and management company before you buy. You also can search online for complaints,
  • Is everything the salesperson promised written into the contract? If not, walk away from the sale. (A standard resort rebuttal is, “You should have asked for anything of importance to you to be added to the contract.),
  • Don’t act on impulse or under pressure. (This is easier said than done, but better to forfeit a few perks than be saddled with a vacation plan you don’t want, can’t use or afford, with no exit and rising maintenance fees.)

This next FTC point is the least helpful as, according to complaints received by Inside Timeshare, sales agents often offer to be your vacation advisor or counselor until death you part, but many members tell us the person they were told to contact never returned phone calls, emails or text messages.

  • Get the name and phone number of someone at the company who can answer your questions — before, during, and after the sales presentation, and after your purchase.

https://www.consumer.ftc.gov/articles/0073-timeshares-and-vacation-plans

Mike Finn of the Finn Law Group answers the question,

Finn-Law--Main-Logo

What if a Timeshare Resort Suffers Damage?

Many, many timeshare resorts are located in areas where terrible storms and other “acts of God” happen with some frequency, such as Florida or the Caribbean – both of which have suffered extensively this hurricane season.

As business owners and locals rebuild and recover in the face of a cataclysmic storm or other disastrous event, timeshare owners looking on from spots across the country have their own unique worry: Namely, how they will be affected if their “home” timeshare resort suffers major damage.

There is a lot to unpack here! In our experience, though, timeshare consumers who are worried about their resort are predominantly concerned with two things –

  • How their ability to make reservations will be affected, and
  • Whether they can expect to pay more in assessments and fees.

To the first point, it is quite likely that your ability to use a timeshare resort may be affected by damage. Facing a loss of property or a labor shortage (as employees stay home for their own safety), many resorts may well be forced to close or suspend service temporarily, affecting the plans of those who already had reservations or who were planning on making them.

The second major issue that concerns many consumers: Whether or not they’ll feel the effects of a storm or other natural disaster in their pocketbook. Assessments and fees for repair costs will vary from resort to resort, based on the unique circumstances at play.

Certainly, though, timeshare consumers would be wise to remember the words of the Orlando Sentinel’s Caitlin Dineen, who notes:

“In some cases, owners could be asked to pay fees to offset repair costs if some damages don’t meet insurance thresholds or there are large deductibles that need to be met first.”

Let’s expand upon that. Should a resort be damaged, the bulk of the costs of repairs should be covered by insurance; Property Owners Associations (POAs) also have reserve funds designated for special situations (both of these are paid for, at least in part, by owners’ annual maintenance fees).

With that said, it’s important to remember that insurance rarely covers everything, and that the POA reserve is often insufficient to take care of the difference. As a result, timeshare owners will often end up paying something more out of pocket in the event of resort damage, be it for debris removal, landscaping services, or other costs that arise in the wake of a weather event.

Resorts and owners will be affected on a case-by-case basis. Following the massive fires earlier this year in Tennessee, for instance, many interval owners were relieved to hear that they likely wouldn’t be on the hook for fees after several resorts in the area suffered damage. Other owners will tell you a different story, such as those who “found themselves on the hook for nearly $5,800 in special assessment maintenance fees” after their Hawaiian resort suffered “water intrusion.”

Note from Irene: Mr. Finn is referring to Diamond Resort’s The Point at Poipu Resort and the resulting class action lawsuit filed by owners.

http://www.poipuowners.org/News.html

An important thing to remember

Recuerde

 It’s important to consider that information on matters such as these will be included in the documents you receive at the time of closing. While it may be difficult to parse through the language, taking the time to research your contract and POS documents can only benefit you in the long run.

Have any more questions or concerns? Don’t hesitate to get in touch!

Led by Attorney Michael D. Finn with 45 years of experience, the Finn Law Group is a consumer protection firm specializing in timeshare law. Our lawyers understand vacation ownership as well as the many pitfalls of the secondary market of timeshare resales. If you feel you have been victimized by a timeshare company, contact our offices for a free consultation. Know your rights as a consumer and don’t hesitate to drop us a line with any questions or concerns.

Thank you to Mike Finn for this very interesting article, also a big welcome to Tammy Arkley, who is a book editor and court reporting editor, who will be helping Irene with edits of the US articles.

That is it for this week, remember one thing, always check any company that contacts you or you may be thinking of doing business with, spending time to do your homework with save you thousands in the long term. If you need any help in doing this “homework” contact Inside Timeshare and we will point you in the right direction.

weekend

flags

The Tuesday Slot

Since we published last week’s Friday’s Letter from America, Inside Timeshare has received some very good news from one of our readers. It was concerning the “FAKE” law firm Amador Galeca Abogados, this reader had paid them by bank transfer to start “legal” proceedings against Royal Sunset Beach and Andrew Cooper. When she became suspicious, she found our articles on this group, which are part of the Litigious Abogados family of “FAKE” law firms.

We advised her to contact her bank and see if they could stop the transfer, this she did. Thankfully her bank has managed to do this and the money is now safely back in her account.

amador-galeca-300x191

She then received another call from this “law firm” asking why she had stopped the transfer and why she was not going to continue with the “case”. She told them in no uncertain terms that they were a “scam”, to which they replied, have you been reading the Inside Timeshare Blog? They are the ones perpetrating the scam!

Well, it is certainly a great scam, considering Inside Timeshare never receives or asks for any payment for any help or advice we give. To be a scam there must surely be some financial motive.

The only ones perpetrating a scam here are Amador Galeca Abogados along with all the other fake law firms this lot have produced. If Inside Timeshare is wrong in what we publish we ask this very simple question, YOU ARE SAYING YOU ARE A LAW FIRM, SO WHY HAS INSIDE TIMESHARE OR OUR LAWYERS NOT HAD ANY NOTIFICATION OF YOU TAKING ANY LEGAL ACTION FOR PUBLISHING FALSEHOODS?

The simple answer is, YOU ARE THE FAKES, YOU ARE THE ONES WHO ARE DEFRAUDING VULNERABLE ELDERLY TIMESHARE OWNERS. THE AUTHORITIES ARE ONTO YOU AND WE WILL KEEP ON PUBLISHING ABOUT YOU AND EVERY NEW WEBSITE, FAKE LAWYERS NAMES THAT YOU COME UP WITH. THAT IS OUR PROMISE TO ALL OUR READERS!

Now on with this Tuesday’ article from Irene Parker.

Timeshare Lending Decisions

As Compared to Prenuptial Agreements

AB

By Irene Parker

October 10, 2017

Mesmerized by the thought of endless vacations, while on vacation brain, staring at a finger pointed to a low monthly payment, the last thing on the mind of a timeshare buyer is “What type of lending, if any, should I select in the event my decision to spend thousands of dollars for a vacation plan does not work out?”  

The decision made about how to finance a timeshare purchase has a dramatic impact on what happens if a buyer learns later they made a mistake.

Hopefully, you didn’t make a mistake. There are timeshare companies that work hard to keep up industry standards and provide a viable, if limited, secondary market.

Last week we published an article about timeshare Foreclosure. Out of 160 US timeshare complaints Inside Timeshare has received, the majority are about high interest rate loans and even higher interest rate credit cards. The toxic and compounding effect of this combination can spell financial disaster. It can mean the down payment is financed at around 25% and the loan 12% to 19%. Many tell us they were told any bank would refinance a timeshare at a lower interest rate only to learn banks do not finance timeshares. Comments include, “Banks would be crazy not to finance your timeshare. It is worth $500,000!” when it was worth nothing on the secondary market”. One complaint even stated specifics – the name of the bank, the term and an interest rate of 6%.  

At the last timeshare presentation I attended, the sales agent told us, “When you get home, take out a home equity loan. No one would finance at our interest rates.” However, transferring to a lower interest loan like a home equity loan may not be the right decision either.

Inside Timeshare published its first Nightmare on Timeshare Street article one year ago. The family was struggling to pay maintenance fees. As so many of our readers have reported, a common solution, as suggested by unscrupulous sales agents,  is to sell the existing member more points as this will afford them maintenance fee relief or the ability to sell points. Unfortunately, the programs were non-existent. Fortunately this family walked away from this deal. Unfortunately, they had taken the financing advice and took out a home equity loan transferring the loan to a third party lender. When the kids said they wanted nothing to do with timeshare, and the maintenance fees escalated, they were forced to deed back $60,000 worth of vacation points and were left with a $33,000 home equity loan and a high school graduate starting college.

Should timeshare buyers ever consider third party lending?

Savage

Timeshare Attorney Mike Finn of the Finn Law Group says NO!

Mike posted this comment after reading “Foreclosure, Is it Survivable?”

http://insidetimeshare.com/timeshare-foreclosure/#comment-10000

Another tremendous and informative article! I think the one major, major admonition I have for anyone, client or not, who has purchased a timeshare with developer financing and may want to reconsider the merits of the purchase (and, of course, assuming the rescission period has passed), do not, I repeat, do not under any circumstances, attempt to re-finance the purchase via a home equity line or a transfer to a lower interest credit card, or, for that matter any other methodology that has as its objective, re-paying the developer with other third party money.

For that matter don’t even think about using your own funds either! Assuming you soon may conclude that you do not want to continue with your timeshare obligation for whatever reason, legally based or economically driven or a combination of both, you will come out much better in the long run (no matter the developer’s interest rate) if you are left dealing with the developer as your creditor, as opposed to any other third party you opt to transfer that debt to! If you have any sort of legal argument that the resort debt was accompanied by any sort of misrepresentation or fraud in its inducement at time of contract of purchase, you will lose the benefit of that position with any other third party creditor save the resort!

Respectfully,

Mike Finn

This leads me to the comparison I made in today’s title, comparing a timeshare lending decision to a prenuptial agreement. Being in love is a little like being on vacation. A marriage often starts with a vacation. With love all around, the idea of signing an agreement that casts doubt on the “till death do us part” seems distasteful.

From what Mike Finn says, if you must buy a timeshare, begin with a negative end in mind. Buy it on the developer’s high interest rate nickel because in-house loans are easier to cancel. For my part, if this is the appropriate strategy, then a timeshare should never be purchased. Would I buy our timeshares again knowing what I know today? Yes, I would buy Port Elsewhere in the Ozarks and Maui Hill fixed-week timeshares again. Ambiguous right-to-use programs I think not.

Can we stop unethical timeshare business practices?

I doubt it. In Florida alone, $70 billion a year flows into the state in tourist dollars. Lawmakers, some influenced by lobbyists, have turned a deaf ear. Regulation is by design at the state level, disguising and diminishing the scope of the problem.  For some industry players, the culture of deceit on the front end of the timeshare sale is so ingrained it is the established norm. Until the problems associated with perpetual contracts with no secondary market and deceitful and overly aggressive sales tactics are acknowledged and addressed, buyers should consider carefully the choice between buying a timeshare and booking online. To my knowledge not one timeshare company has ever admitted wrongdoing.

The following self-help Facebook pages offer members a safe place to express concerns and share experiences. Petitioning a timeshare company can be frustrating and intimidating. Contact Inside Timeshare or one of these self-help groups if you have a positive or negative timeshare experience to share.

We seek to provide members a way to proactively address membership concerns; to advocate for timeshare reform; to obtain greater disclosure from the company; to advocate for a viable secondary market; and to educate prospective buyers.

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

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

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

we can help

Thanks Irene for that article, also our thanks to Mike Finn of the Finn Law Group for your contribution.

Inside Timeshare welcomes contributions to our pages from you the readers, we are also looking for more contributors from Australia, Asia, Mexico Central and South America, India and anywhere that timeshare consumers exist. Let us all get together and share our experiences, the industry will only change when we all speak with one voice.

globe flags 2

        

 

letter from america

Friday’s Letter from America on Thursday

Welcome to Friday’s Letter from America on Thursday, yes that is correct, we are publishing a day early as we are travelling to the US on Friday.

Inside Timeshare is visiting our American colleagues, with Irene and Don meeting me at Orlando airport, while there we have arranged to meet with several attorneys including America’s very own Timeshare Crusader Lisa Ann SchreierWe will also be meeting many other people and hopefully having a few cold beers.

beer

Inside Timeshare is also pleased to announce a new collaboration, for sometime CLA International based in Dubai, has been getting their website up and running. They have been following the articles published on Inside Timeshare and have asked if we would run their news section.

They wanted an independent voice rather than their own take on things, Inside Timeshare has agreed to supply those articles, so many of the articles regarding international timeshare news we publish will be posted on their website. These will be from the many contributors who are now writing for Inside Timeshare. We also hope to add more from the following areas:

India (Goa), Thailand and the surrounding Asian area, Australia, Mexico, Central and South America, we welcome any contributor who would like to publish their experiences, news and views on the world of timeshare. You can contact us via our contact page or direct to admin@insidetimeshare.com

contribute

Update from Europe

Once again, Inside Timeshare has heard from another reader who found our articles on the Litigious Abogados family, namely Amador Galeca Abogados.

The reader had a call regarding their timeshare at Royal Sunset Beach, with the name Andrew Cooper again being named as the director being taken to court with all his personal property and assets being seized. For a sum of just under 1000€ they could be part of the case.

The reader then made a bank transfer, but then decided to check out the name Andrew Cooper, finding our previous article. When the reader contacted us we explained how the scam operates, they immediately informed their bank and the bank is now trying to stop the transaction.

The reader explained that when her husband became too ill to travel Royal Sunset actually took back the timeshare, so they no longer owned. Because of this there would not be any basis for a claim in any court.

This story just goes to show once again, before you pay any money, check who you are dealing with. Hopefully the readers bank was informed in time to stop the money being transferred.

stop think proceed

We started the week with verdict from the courts against Palm Oasis (Tasolan), the following day the Supreme Court ruled on another case against Silverpoint in Tenerife, that made 64 rulings from this court on timeshare. In this case the court again declared the contract null and void, awarding over £99,000 plus a double deposit of £6,082 including legal fees and legal interest.

Then yesterday Wednesday 4 October the High Court in Tenerife ruled once again against Silverpoint and awarded over 67,000€ plus legal fees and interest to the client. This was then followed by the news the Supreme Court had just issued another sentence against Silverpoint, bringing the total number of cases won at this court by Canarian Legal Alliance to 65.

Now on with Irene’s article where she recounts our first meeting and her visit and interview with Canarian Legal Alliance. We have certainly moved on since that first meeting.

Canarian Legal Alliance and Inside Timeshare

The meeting of minds

Irene with CLA
Irene Meeting with CLA Staff Sept 2016

By Irene Parker

October 5, 2017

We are judged by the company we keep, so shortly after submitting my first article to Inside Timeshare my husband and I flew to Gran Canaria, Canary Islands to meet Charles Thomas and his Canarian Legal Alliance friends. It was not an easy trip since we boarded the wrong plane in Madrid and ended up in AMSTERDAM!

We stayed at Diamond Resorts Cala Blanca resort on Mogan. A Diamond sales agent in the US actually introduced me to Charles by sending me one of his articles. The staff at Cala Blanca could not have been nicer. I talked quite a while with the manager as he was the head of a resort employee union of sorts advocating on behalf of refugees he felt were being treated unfairly at a resort on the other side of the bay. One of the sales agents working at Cala Blanca and a friend of Charles is one of my Facebook friends.

In today’s timeshare world you can’t be too careful. Attorneys come in all ethical shapes and sizes. In addition to meeting Charles, I was able to meet with the CLA office manager Csilla, named business person of the year for Gran Canaria, several intake workers showing sincere compassion as they listened to timeshare accounts over the phone, and a few CLA lawyers. Since this July 2016 video clip CLA has achieved several more victories for EU timeshare clients – 65 Supreme Court victories to be exact as of October 4, 2017. Watching this video for the first time, I remember thinking if Cristina ever decides she doesn’t like law, she could find a job in the motion picture industry.

http://www.canarianlegalalliance.com/cla-latest-updates-video/

Timeshare today seems to have lost all sense of direction. True, we hear primarily from the disgruntled, but developer lawsuits flying back and forth between timeshare developers and transfer agents has left many timeshare members in a state of confusion. Who do you trust?

I trust CLA and am honored to have been asked to have my Inside Timeshare articles featured on the new CLA International website with Charles webmaster of the news tab. Our Diamond Resorts member sponsored Advocacy Facebook administrator and Economics Professor Michael Nuwer and Australian Contributor Justin Morgan submitted their comments for this article about the Apollo Global Management buyout of Diamond Resorts.

http://clainternational.ae/2017/09/28/who-is-apollo-what-is-apollo-two-diamond-member-consumer-advocates-offer-their-opinion/

Timeshare members need help. It has been widely reported many aging baby boomers (like me) are desperate to be released from timeshare. Some timeshare companies have launched surrender programs, like Wyndham’s Ovation program, but the vast majority of members contacting Inside Timeshare succumbed to high interest rate loans and credit cards. Thus, they are not eligible for voluntary surrender programs. Often they are forced into foreclosure. The problem is exacerbated when the member alleges they were deceived into buying a timeshare or upgraded for maintenance fees relief or buy-back programs that do not exist. Out of 157 complaints received (as of October 4), 143 allege deceit on the front end of the sale. The others can’t afford rising maintenance fees.

From our humble beginnings, as more members started helping other members, we called ourselves Timeshare Advocacy Group™ as members turned anger and disbelief into action and advocacy. Timeshare Advocacy Group™ started as an afterthought. A former timeshare sales agent contacted me and said they wanted to do a press release in Arizona. We needed a place where readers could respond.

Irina Allen stepped up to the plate. She is our Facebook page administrator.

admin lady new

Irina (Irene) Allen purchased over $500,000 worth of timeshare points to share with family, friends and clients. On the advice of a sales agent, Irene opened a RedWeek account and posted one ad to rent some of her points. She gave up this idea after she never got paid for the rental. Rentals are not allowed, according to company rules, but there are hundreds of rental ads anyway. She also was accused of opening an Airbnb account. Irene says she has never had an Airbnb account. She was expected to pay $2,400 per month in mortgage payments and $29,000 in maintenance fees for a year while her account was suspended. Resorts are exempt from the rule for promotional purposes. Thus, the resort was able to rent out Irene’s points at Irene’s expense.

At Timeshare Advocacy Group™ members also help members with regulatory filings and media outreach. We have Wyndham, Bluegreen and Diamond members working alongside former Hyatt, Westgate, and Diamond timeshare sales agents in an effort to reform an industry badly in need of reform. In addition to timeshare members, other Advocates, like blogger Lisa Ann Schreier, lend their support. Lisa Ann and Charles are both former timeshare sales agents.

In America, it’s not easy these days for opposing sides to talk to each other, but every once in awhile there is a glance of a Republican sticking their toe over to the Democratic side of the aisle. It is our hope there will be a day when developers will take the time to listen to what critics have to say instead of only focusing on ambulance chasing unscrupulous transfer and listing agents. It is my belief, until the deception on the front end of the timeshare sale is acknowledged and addressed, the court of public opinion is the only court open for the beleaguered and often financially devastated timeshare member learning their contract is perpetual and the secondary market limited at best. For some timeshare companies, there is no secondary market. What other investment or product exists that holds the buyer of a product hostage?

Charles Irene

Charles is winging his way to America tomorrow, so let us know if you will be in the Orlando area October 8 – 12. Or, let Charles know the next times you happen to be on Gran Canaria in the Canary Islands.

I am a former stockbroker and financial planner. After I retired from the brokerage business, I became a CASA Supervisor, writing court reports for Family Court on behalf of children in foster care. I have always had a problem turning my back on anyone who considers themselves a victim. There are many ways to volunteer time in retirement. Join us in our efforts to enhance timeshare accountability and transparency.

http://insidetimeshare.com/what-a-volunteer-does-for-nothing/

globe

That’s it for this week, tomorrow will be a long day as it is Gran Canaria, Madrid, Miami then to Orlando. I know Irene and Don have set aside a couple of days to show me some of the sights, so it will not be all work and no play!

We will however be trying to publish some articles while over there, so keep an eye on these pages.

Have a great weekend

cartoon-airplane

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!

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“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.

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