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Irene Parker

letter-from-america

Friday’s Letter from America

It’s Fridayyyyyyyy! So welcome to another Friday’s Letter from America, Irene once again looks at Customer Service, this time with a positive outcome. But as usual a quick round up on timeshare news in Europe.

One of our long standing readers has sent in the following information, it concerns a long running dispute many owners have been having at Club Jardines del Puerto in Puerto Banus. Costafield Management have pulled the plug on the club 3 years early. It will close on 31 December 2017, after this no members will have any right to occupy.

It looks as though FNTC will be selling off the properties, they will also have to comply with the constitution which demands a 50/50 split between members and the developer.

Our reader also asks this question, How can a small thriving club in the centre of one of the most popular prestigious resorts in Europe become “financially unsustainable”?

More on this as we get the news.

The same reader also asked if we knew anything about MRL (MacDonald Resorts Ltd) taking owners to court for alleged unpaid maintenances fees in Manchester. At present we have found no reference to this in the press, although it must be said that cases of this nature do not tend to be publicised. But knowing the reputation of MacDonald Resorts, we would not be surprised in the least.

Further to the article about Anfi, yesterday saw 2 new sentences from the courts against Anfi.

At the Court of First Instance No 2 in Maspalomas, the judge declared the Anfi contract null and void. He also ordered the return of over 32,000€ plus legal interest.

The second sentence from the Court of First Instance No 1 in Maspalomas, also declared the contract null and void with the return of over 19,000€ plus legal interest.

So contrary to what Anfi say, the courts are finding against them, invoking the Supreme Court rulings, of which there are now 77, 32 against Anfi.

On the story of Los Claveles, there are now some very interesting comments being posted. These are measured and put forward opposing arguments in a sensible manner. Inside Timeshare welcomes these, but will not tolerate abuse or accusations against named people, especially ones of a criminal nature. Inside Timeshare has given a neutral forum for this debate, in the hope that an agreement can be reached. It is up to you the members to come to this agreement.

Now for this weeks Article from Irene Parker.

Grandview at Las Vegas – a Vacation Village Resort

A Positive Customer Service Outcome

cust serv

By Irene Parker

December 8, 2017

Was this a customer service representative showing compassion towards a former Marine, or a willingness on the part of Grandview at Las Vegas to support their customer over their own sales agent? Either way, it was a first for me in the way Grandview handled a timeshare owner alleging they were victimized by deceit and “bait and switch”, which may allow this timeshare buyer to put a wrong decision in the rear view mirror. Grandview is part of Vacation Village/Eldorado Corporation owned by The Berkley Group.

Jeff Diehl contacted Inside Timeshare asking for advice concerning his two bedroom unit at Grandview in Las Vegas purchased January 2017, alleging he was fraudulently sold by a sales agent making exaggerated claims. What was unusual about Jeff’s report is the specificity. Many complain saying they were told they can rent their unit or points for income, but Jeff knew the name of the sales agent, Marylou G, the specific amount promised – $2,000 to $2,500 per week for his fixed week and for eight more weeks using their equivalent 80,000 points. Jeff had told Marylou this was the only way the family could afford the week.

Rather than leave it at what Jeff had been told about renting, I advised Jeff to do a little research by checking TUG Timeshare Users Group to find out what a Grandview week would bring in rental income. Jeff found only one rental ad for $525 that had been listed since March 26, 2017, with no response.

After Jeff wrote out his complaint, I called the number listed on Grandview’s Better Business Bureau’s report and spoke to a Grandview representative. At this point, I am usually told the resort cannot talk to me so I was surprised the agent asked if I had a loan number and a phone number for the owner. I did. When I explained all of the above to the representative, she said she would call Jeff. I emailed Jeff and told him the name of the representative who said she would call. What usually happens next is one or two weeks of being ignored passes, prompting Better Business Bureau and other regulatory filings.

wow

A first! The representative called Jeff the next day informing him his loan would be cancelled.

As I mentioned, Jeff is a former Marine. He is also disabled. The specific data Jeff provided made it difficult to deny the sales agent told him something that was not true. This would not have prevented any timeshare resort from pointing to the oral representation clause found in the fine print of a volume of documents that allows a sales agent to say anything under the sun to close a deal. To soften the blow, some are told, “If something was important to you, you should have had it added to the contract,” perpetuating the hamster wheel called recycled inventory, as described by one former timeshare sales agent.

Jeff should not have to proceed to the next step which would have involved filing complaints with any or all of the following:

Jeff had initially included predatory lending in his complaint saying,

“Just a quick note to say that the reason I included predatory lending in my complaint, is that the definition of this type of lending says, that when a lender makes a loan to a consumer who cannot afford the loan, in order to benefit themselves, but harms the consumer in the process, this is predatory lending. So, I believe you misunderstood why I included the 17.9 % loan rate.”

I informed Jeff that all timeshare sales agents sell timeshare in this fashion so making this part of his complaint was meaningless.

Jeff also is demanding monies paid be refunded as he alleges the timeshare was sold by deceit, violation of trust, and “bait and switch” meeting the FBI’s definition of White Collar Crime Financial Institution Fraud. At the time of publication, Jeff had not yet heard if his monies paid would be returned, as he would have to contact the corporate office, which Jeff plans to do.  

Before we place Vacation Village up there with Inside Timeshare’s favorite timeshare, Disney, more due diligence is required.

Vacation Village has a Better Business Bureau rating of F. Two sources tell us The Berkley Group is being investigated by the Florida Attorney General’s office. According to Berkley’s LinkedIn page, “The Berkley Group is a private timeshare resort development firm owned by more than 2,000 company employees. Under its Vacation Village Resorts and Affiliates brand, The Berkley Group has generated a worldwide owner base that exceeds 500,000 families.”

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

Grandview at Las Vegas, owned by Eldorado/Vacation Village has a BBB rating of B, so maybe this resort is trying to improve its customer service.

https://www.bbb.org/southern-nevada/business-reviews/resorts/grandview-at-las-vegas-in-las-vegas-nv-66863/reviews-and-complaints

Remember: BBB ratings are not a guarantee of a business’s reliability or performance.  BBB recommends that consumers consider a business’s BBB rating in addition to all other available information about the business.

https://www.bbb.org/council/overview-of-bbb-grade/

Inside Timeshare has heard from 227 timeshare member readers, of which 212 allege they were sold a timeshare by deceit and bait and switch. If you need help or just the support of others in your situation, here are some member sponsored self-help groups:

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

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

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

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

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

roundabout

Thank you Irene, at least this is one family that has had a positive outcome.

On Tuesday we will publish another article from Irene, this is titled:

Another Military Family Wages War against Timeshare

Will Bluegreen Honor those whose sacrifice is so great?

This is a short but hard hitting article, it shows the disgusting lengths sales agent will go just to “close a deal”. For those who are ex-serviceman or those who support them, you will find this article will make your blood boil.

That’s it for this week, if you have any comment about this or any other article published, Inside Timeshare invites you to send it in.

If you need help with any timeshare matter, or just need to know which firms you can trust, Inside Timeshare will be pleased to help.

Have a great weekend and see you next week.

friday dog

 

news

The Tuesday Slot with Irene

Welcome to the first Tuesday Slot with Irene of December, this week Irene gives an update on an article from October, but first some important news from Europe.

Last week Inside Timeshare had some unconfirmed news on a raid in Tenerife, which we did not publish, this was against the offices of Mark Rowe’s enterprise there. This week news came out of raids at his businesses in the UK By Trading Standards, so this could just verify the Tenerife news.

This raid follows an investigation by the “Scambuster Team” of Trading Standards, offices of around 22 Mark Rowe companies were searched, employees questioned and documents removed for further investigation and as evidence if any criminal charges are brought.

trading standards

Among those raided were ABC Lawyers, Glenmore Consultants, Monster Rewards, Jive Hippo (replacement for Monster Credits) and apparently the TCA (Timeshare Consumer Association). The raid in Tenerife would most likely have been Hollywood Marketing SLU.

It looks like we will have to wait until the new year before we know the outcome, this follows the news last month of another enterprise EZE Group, where the directors and owners Dominic O’Reilly and his daughter Stephanie O’Reilly pleaded guilty at Birmingham Magistrates of “Aggressive” sales tactics and “Coercion” with their product EZE Credits. They are to appear at Crown Court on 15 December, whether they will be sentenced then or just remanded on bail until the New Year remains to be seen.

Now on with the article from Irene Parker.

TARS – Timeshare Advisory and Resolution Services

An Honest Timeshare Exit Program – Who knew?

TARS Limited Term Deed Program – A Monthly Update

case

By Irene Parker

December 5, 2017

In October Inside Timeshare featured the launch of TARS TIMESHARE ADVISORY AND RESOLUTION SERVICES LLC new “limited term deeded” program.  “Consumers enjoy all the “pros” of traditional timeshare and none of the “cons”, plus even more benefits,” announced TARS President and General Counsel, Martin M. Kandel.

http://insidetimeshare.com/fridays-letter-america-24/

The limited deed/limited fun program is geared toward fixed week resorts, but the same strategy could be implemented by major timeshare point sellers, solving the problem a timeshare owner faces when life changes and now they own a vacation product they don’t want, they can’t afford, and can’t sell. TARS could eventually neutralize resale and listing scams. Scam revenue would turn into new buyer revenue which would be a win-win for everyone except the scammers.

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

Inside Timeshare has received timeshare complaints from 223 readers (176 when the October 26 article was published). Members sometimes describe catastrophic financial distress when denied a release.

I asked Dennis F. DiTinno, CEO and President of the Liberté Management Group of Companies and Chairman of TARS to provide an example of how the limited deed works. “The TARs program offers the member an option to purchase a limited term deed for five or ten years. The term will be the decision of the Associations, but we would not recommend any term less than three years. We feel the five year plan best suits the Association and the owners. The design is to utilize the units’ maintenance fee costs with an increase annually to make the tax repercussions better for the Association – a major savings, but each unit in each resort would be different,” Dennis explained.   

All Seasons Vacation Resort in Madeira Beach and the Voyager Beach Club Treasure Island are the first to launch a TARS program. TARS had just signed up their first sale when we first talked to Dennis and he said other owners told him they would be glad to sign up when they returned home.

The example Dennis provided was for a Voyager unit with an annual Maintenance fee of $510. A five year limited deed could be purchased for $6,000. The now former perpetual deed owner becomes a limited deed owner. At the end of five years the term is up and the unit reverts back to the HOA.         

At this point skeptics raise their eyebrows. Wait! A $510 annual maintenance fee turns into $1,200 a year or $171 a night for a seven night stay? The Liberté website offers a one bedroom gulf view for $1,053 a week. So the limited deed would cost the member $735 ($1,200 – $1,053 = $147 x 5 years).

One timeshare insider suspects it’s a crafty upfront scam. I know Dennis and Martin Kandel so I have no concerns there. Another insider I contacted voiced a concern about what would happen if TARS went out of business. Liberté has been in business 35 years managing seven fixed week resorts and brokers resales and rentals as well. Liberté is a member of the Licensed Timeshare Resale Broker Association.

Dennis received a great congratulation from one timeshare advocacy organization, told this can be a huge positive change for the industry. Dennis also spoke with Robert Follis at the Florida Attorney General’s office who also saw the program as a solution to many problems.  

When I called Voyager, I spoke with M J Hassall, also with Liberté, who expressed great enthusiasm. “Every owner is unique so we provide a one on one presentation. One obstacle is convincing owners this is not just another ruse to get them to buy more weeks. This really is important information they need to know about. We have presented the plan to about 15 members with about 50 percent in favor of the program,” explained M J.

“In conjunction with select strategic partners, TARS will provide an a la carte menu of products and enhanced services designed exclusively for the legacy market segment. One of the partners is Let’s Go N Travel,” M J added.

This led me to Let’s Go N Travel which will be the subject of January’s monthly TARS update. I spoke with Chip Langdon at Let’s Go N Travel. Chip described Let’s Go as a Vacation Club boasting 450,000 members. More on how this fits in with TARS later.  

https://www.facebook.com/4life4less/

TARS provides a new way to address old problems (www.tarserv.com) in an effort to provide legacy resorts with a means to maintain their resorts for a decade or more in order to plan for robust continuation or an orderly repurposing of the resort and its timeshare program. This would seem a concept owners need to wrap their heads around, as they may not have yet thought about an exit or even if they need one.

Thank you to all at TARS for their help as we learn more about this evolving program. As a former deeded fixed week owner, I can see spending the extra money on something I enjoyed for 30 years, paying an extra $735 spread out over five years to be done with it without the hassle of dodging scams or waiting for an over supplied product to sell. As with any product, if it meets the needs of the consumer, it will sell itself. Timeshare does not sell itself. It is product that has to be “sold” and often requires six to eight hours of brow beating, “pitching heat” and deceit, according to 220 of our readers. We hope, working with developers, such tactics will diminish. We know there are good timeshare sales agents out there selling the product the way it should be sold. Inside Timeshare endorses Disney for their scarce complaint record.

Inside Timeshare will publish a monthly resale recycle report to follow along as TARS progresses. I still need to call my favorite fixed week timeshare people at Port Elsewhere in the Missouri Ozarks and Maui Hill at Maui Lea to hear what they think.

 Liberté

At least this provides a positive topic members and developers can agree on – the need for an honest timeshare exit to shut off the scam valve.  

http://resorttrades.com/timeshare-advisory-and-resolution-services-llc-tars-and-the-liberte-management-group-join-to-expand-services-for-legacy-resorts-and-owners/

Irene will be keeping us updated on a monthly basis on TARS Limited Term Deed Program, could it be that there is some honesty in this industry called timeshare? Only time will tell.

Other news coming in from the US is the link up between ARDA (American Resorts Development Association) and Europe’s RDO (Resorts Development Association). It has been rumoured for sometime that the RDO is what you might call “strapped for cash”, well they have this year lost one of their major members, Silverpoint. Could this link up be the saviour of them?

Kwikchex has also laid out the scope of its new mission, running the “Timeshare Helpline”, on behalf of the RDO, which replaces the disgraced and bankrupt TATOC. As we know TATOC was supposed to be an independent body representing timeshare owners through their committees, but under the leadership of Harry Taylor, they did the bidding of their benefactors. These benefactors were the industry and RDO members.

So the question is if the new helpline is run by Kwikchex and the Timeshare Task Force, paid for by the RDO, how can it be independent and on the side of the consumer?

Have Trading Standards and other Authorities been taken in by them, the same way as Citizens Advice Bureau were taken in by TATOC?

Inside Timeshare leaves you the reader to draw your own conclusions.

Remember

“Non enim videtur”

“Not all is as it seems”

letter-from-america

Friday’s Letter from America

Welcome to December’s first Friday’s Letter from America, this week Irene Parker examines Non-Disclosure Agreements in timeshare and should they be permitted. But first we have a look at what has been in the news in Europe.

Last month we ran the article on the court case involving Dominic O’Reilly and his daughter Stephanie O’Reilly of EZE Group, they both pleaded guilty to some very serious charges at Birmingham Magistrates court. Their case has been sent to the Crown Court for sentencing in January, it has now been reported that they will be back in court on 15 December. Whether they will be sentenced then we will have to wait and see, but if they are, they may be having Christmas dinner behind bars.

Yesterday we published an article with an opposing view of the Los Claveles saga, this has prompted some rather heated comments. It would seem that each side is accusing each other of telling lies, this is not the way forward, there will always be a difference of opinion, just because one person does not agree does not make it a lie!

Just having opposing views does not mean you cannot work together, it is your resort and that is what counts not the bickering or personal animosities.

 

The courts once again have been busy, with no less than three Supreme Court ruling this week.

tribunal-supremo

After publishing last Friday’s article it was announced that the Supreme Court had made another ruling against Silverpoint, the court awarded the client over £42,000, plus £3,000 which is double the deposit paid within the 14 day cooling off period. The client will also receive back their legal fees and legal interest.

On Monday 27 November, the Supreme Court again ruled against Silverpoint, declaring the contract null and void and awarding over £23,000 including the return of legal fees and interest.

On the same day they issued another sentence against Silverpoint. The contract was declared null and void with the return of more than £37,000 plus legal fees and interest.

It was the turn of the Court of First Instance in Tenerife on Tuesday 28 November to issue a sentence against Silverpoint, the judge following the Supreme Court rulings ordered the return of over £11,000 and declared the contract null and void.

On Wednesday 29 November the Tenerife Courts again found against Silverpoint with the return of £11,000 and the contracts declared null and void.

The same day from Madrid the Supreme Court announced yet another ruling against Silverpoint, contract declared null and void with the return of £7,000 plus legal fees and interest.

Other cases this week saw rulings from other courts around Spain which included the return of all payments and contracts being declared null and void against Anfi, Blue Bay and Puerto Calma

Now just to rub it in, as if Dominic and Stephanie O’Reilly havn’t got enough problems the list also included a sentence against EZE Group!

The total amount being returned to clients this week alone is a staggering 403,336.25€

All these cases have been brought on behalf of clients by Canarian Legal Alliance, with this week’s Supreme Court rulings bringing their total to 74, another record for the legal history books!

law

So on with this Friday’s letter

Timeshare Non-Disclosure Agreements

When they are fair and when they are not

 cloud

By Irene Parker

December 1, 2017

High school civics classes must be having interesting and lively class discussions about American politics today. Sexual harassment accusations have taken over the media and are raising questions about the damage caused by non-disclosure agreements (NDA). Sexual harassment settlements require the victim sign an NDA agreeing not to disclose what happened.

New Jersey lawmakers are proposing NDAs be banned in cases of sexual harassment. As NJ.Com reported, “Corporate boards of directors keep on approving settlements to cover executives who then go on to commit the same offense.”

http://www.nj.com/politics/index.ssf/2017/10/harvey_weinstein_scandal_has_nj_dems_ready_to_ban.html

Timeshare members should lobby for a similar prohibition, especially when a member receives nothing in return after surrendering timeshare vacation points that can easily cost $100,000 or more. Out of 220 timeshare complaints voiced by our readers against multiple developers, 115 allege they were sold or up-sold by deceit and bait and switch, some just days after purchasing. Members have reported on the many ways sales agents and their companies can avoid the rescission or cancellation period. Especially in these cases, an NDA seems harsh.

The most common allegations of deceit reported by our readers include:

  •  The ability to sell or rent vacation points
  •  The ability to pay maintenance fees with points
  •  The need to always buy more points in order to have adequate availability
  •  Agents from the same company accusing each other of selling the member the wrong product. The member is told to buy more points to change from one product to the next only to be told by the next agent, they still bought the wrong points! The member is required to sign an NDA even when all they did was buy more points.    

One lawyer I spoke with, who asked not to be identified, said he is shocked by the use of NDAs in timeshare. He explained that as a litigator he saw large settlements awarded without a non-disclosure, but in timeshare even members who receive nothing in return for surrendering vacation points must sign an NDA.

When Inside Timeshare publishes an article about a member’s complaint, we no longer feature the article if the resort helps the member resolve their issue. We do maintain a complete list of all member articles for regulators and law enforcement and have compiled a 90 page complaint summary. With over 200 complaints, patterns emerge. Repeated complaints against certain sales agents point to repeating offenders. Comparing notes with law firms across the country, we have learned certain timeshare sales agents are household names at their offices as well.

Inside Timeshare published Deneice’s article September 29, 2017.

lady

 Inside Timeshare has received 23 reader complaints concerning Diamond Resort’s Las Vegas sales centers. Deneice Vargas alleges she was fraudulently up-sold in Las Vegas. Eight of the members reported a positive outcome working with Diamond Resorts to resolve their complaint.  

Initially, the DRI advocacy agent Deneise worked with seemed to agree with Deniece and had asked for supporting medical documentation about her husband Louis’s diagnosis of Bell’s palsy. Relieved, Deneice submitted the information only to learn the customer service agent who had been helping her quit and the new agent seemed to dismiss Bell’s palsy as if it were a common cold. I personally felt the loss because the hospitality agent who quit called me about my complaint over two years ago. We did not always agree, but I felt she had a moral compass.   

Deneice reached out to us recently to let us know how things were going. She was shocked to receive a call from one of Diamond Resort’s advocacy hospitality agents. According to Deneice, when DRI Consumer Advocates are not advocating, they make collection calls. “They called at 6:50 AM! Isn’t there a law that says you can’t do collection calls outside of normal business hours? I suspect the advocacy department called demanding payment because I was not answering the phone from the collection agents,” said Deneice.    

If there were no loan, I’m confident DRI would allow Deneice to surrender her points for resale, but Deneice’s situation is complicated by her allegations of deceit and bait and switch and the outstanding loan. We reached out to Diamond for comment, but there was no response. Deneice’s original article:  

http://insidetimeshare.com/fridays-letter-america-21/

If Deneice’s resort does decide to help her, she will be required to sign a non-disclosure agreement, agreeing not to say anything disparaging against her resort. One benefit (for our advocacy efforts) is that Deneice will not have to sign an NDA if she forecloses. We lose a lot of advocates because of the NDA. I’ve gotten to know Deneice and feel she will be of great benefit to our team of core advocates determined to stop or at least reduce the “pitching of heat” prevalent in timeshare today, bolstered by points based programs that offer easy deception. One of our advocates is a Florida detective who worked economic crimes undercover.

As a non-lawyer, I often rely on NOLO for legal advice. An added benefit of NOLO is somehow they prevent timeshare exit scam artists from posting ads all over their articles.

https://www.nolo.com/legal-encyclopedia/nondisclosure-agreements-29630.html

When I looked up nondisclosure agreement on NOLO, the site connected me to Richard Stim. I submitted this question to Mr. Stim at http://dearrichblog.blogspot.com/

I write for Inside Timeshare. We are receiving a flood of timeshare complaints. If someone who feels they were sold by deceit and bait and switch, spending $95,000 for a timeshare, convinces the resort to take the timeshare back with nothing in return, should they have to sign an NDA? Thank you for your help.   

ballchain

What property would anyone buy, be it a boat, home or car, financing a loan at 12% to 18%, knowing the product they were buying could not be sold?  Not one of our 220 readers knew, at the time of purchase, they could not sell their timeshare. There is a limited secondary market for some timeshares. Contact a member of the Licensed Timeshare Resale Broker Association to find out how your timeshare fares on the secondary market or if you are stuck with a product you don’t want, can’t afford, and can’t sell.

http://www.licensedtimeshareresalebrokers.org/

Thank goodness for Social Media. Here are some self-help member support groups offering good advice and a shoulder to cry one when one finds themselves caught in a timeshare trap.

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 contribute to these articles, they are certainly bringing new information to members / owners in the world of timeshare.

Inside Timeshare once again reminds all readers to do their due diligence when deciding which companies to do business with, as always, doing your homework will prevent the loss of your hard earned cash. If you need help in checking who to trust contact Inside Timeshare and we will point you in the right direction.

Have a good relaxing weekend and join us again next week.

weekend cat

 

stop press 1

Just as we were about to publish, this came in from the Supreme Court in Madrid, another Silverpoint contract declared null and void with this particular client being awarded over £90,000 plus legal fees and interest. That is now 75, yes, 75 rulings from Spains Highest Court!

After publishing this also came in.

The High Court in Tenerife found against Silverpoint yet again. The judge has declared this contract null and void with the return of over £74,000 plus legal interest.

 

capone

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

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

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

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

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

Now for Irene’s article.

marrioot symbol

The Marriott Vacation Club Racketeering Lawsuit – an Update

Timeshare Wars – Members vs Developers and ARDA Part II

evolution

November 28, 2017

By Irene Parker

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“Engineering the Law” Politico

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Marriott Inside Timeshare July 2017

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

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

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

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

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

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

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

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

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

 

letter-from-america

Friday’s Letter from America

Welcome to this week’s Friday’s Letter from America, Irene this week looks at Black Friday, with a few books she recommends. Irene was wondering if we in Europe also have Black Friday, the answer is yes we do, it looks like the retail trade has followed in the footsteps of America. In the UK traditionally Boxing Day was the start of the winter sales, but as pre Christmas shopping was starting to decline as people waited for the sales rather than spend before Christmas, retailers began following the US trend.

Now for a quick roundup of the week in Europe, we begin with the news which came in late last Friday 17 November. The Supreme Court ruled against Silverpoint in tenerife once again.

gavela

The UK client will receive back over £67,000 plus legal fees and legal interest. The contract was also declared null & void. Then on Monday 20 November they issued another sentence against the same company. In this case the client was awarded over £25,000 plus legal fees and interest. The contract was over 50 years in duration and was declared null and void.

Then on Tuesday 21 November another Supreme Court ruling, again involving Silverpoint, with yet another Uk client awarded over £78,000 plus £3,000 double the deposit paid with legal fees and interest.

On Wednesday 22 November, the High Court in Las palmas Gran Canaria declared an Anfi contract null and void with the return of over 18,000€ plus legal interest.

Also on the same day in Tenerife, Eze Group was ordered to repay over £52,000 plus legal fees and interest. We also published the news that Dominic O’Reilly and his daughter Stephanie O’Reilly had pleaded guilty at Birmingham Magistrates court to “aggressive” sales practices and “coercion”. The have been referred to the Crown Court for sentencing in the new year, these are criminal proceedings which the magistrates are limited in sentencing power.

Thursday 23 November in Tenerife, the High Court Number 3, declared yet another Silverpoint contract null and void, with the UK client awarded over £38,000 plus legal interest.

This morning the news came in of yet another High Court ruling from Tenerife, Yes you guessed it, Silverpoint again. The clients in this case will now receive over £40,000 plus legal fees and interest.

So a rather expensive week for Silverpoint and some good news for clients of Eze Group. So now on with our Friday letter from Irene Parker.

A Cyber Monday Shopping Suggestion to Avoid Black Friday

For Timeshare Members and Advocates

Irene desk

By Irene Parker

November 24, 2017 Black Friday in America

The Friday immediately following our American Thanksgiving holiday is called Black Friday. People really do sleep outside shopping malls ready to cash in on deals designed to launch the holiday shopping season. Consider instead shopping at home on Cyber Monday with this holiday suggestion perfect for your favorite politician or timeshare advocate. This will allow you to avoid the rush and possibly prevent broken bones and trampled toes.

The trilogy of books I suggest are helpful for family and friends who work in or are involved in politics, timeshare, customer service, advocacy or law enforcement. We have a high turnover of timeshare advocates due to non-disclosure clauses, but those who have signed such agreements can still steer timeshare members in trouble to Inside Timeshare or to a self-help timeshare group.

Here are three advocate orientated book selections

#1  Hug Your Haters by Jay Baer

Author Jay Baer was the keynote speaker at this year’s Interval International’s Shared Ownership Conference attended by developers and private equity firms. Mr. Baer’s principle theme is: Haters are not your problem…..Ignoring them is.

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

His message is meant for customer service providers, but anyone can benefit from learning about how Social Media is changing the face of customer service. Take timeshare. Non-disclosure agreements, obstacles placed in the way of members designed to keep them from contacting other members, private arbitration rulings – all keep timeshare members silenced and isolated. That’s changing in the face of Social Media. A non-disclosure agreement doesn’t mean the signer can’t suggest someone read Inside Timeshare. There are thousands of timeshare members now comparing notes and Inside Timeshare has helped to tabulate and analyze patterns of concerns emerging from member submitted complaints.

http://www.jaybaer.com/hug-your-haters/

#2 More Davids than Goliaths

A Political Education

Former Congressman Harold Ford, Jr.

Mr. Ford’s book is inspirational for politicians or advocates. When Mr. Ford’s father, Harold Ford, Sr., endured a ten year political scandal and lawsuit over alleged Mud Island Bridge misappropriations in Memphis, young Harold Ford, Jr. describes the success he achieved through grassroots efforts. By reaching out to the media, he learned how to educate and shape the public’s perception of his father. He reached out to broadcast and print media to expose improper jury selection. Mr. Ford, Sr. served 11 congressional terms. He was found not guilty.

In his own campaign, unknown and broke, unable to find speaking engagements, Mr. Ford, Jr., at age 25, was initially pleased to learn his co-campaign chair had arranged for him to speak at 32 graduation ceremonies, only to find out they were kindergarten graduation ceremonies! Still, he dug in with gusto and continued to build momentum throughout his campaign. Mr. Ford’s critics dubbed him “The Kindergarten Candidate”, which Mr. Ford turned into his moniker, and was propelled into congressional office by the votes of grandmas, grandpas, moms and dads who listened to him at kindergarten graduations. According to Mr. Ford, “The campaign was turning because of efforts that I never thought would yield this kind of momentum. The kindergarten speeches were catalysts….Often, the moment it seems least likely that something positive will emerge – it does.”

https://www.goodreads.com/book/show/7339799-more-davids-than-goliaths

#3 The Burglary

Betty Medsger

Any advocate or activist will appreciate the not-so-civil disobedience eight anti-war protestors undertook to break into the Media, Pennsylvania FBI office in 1971. Two were professors, led by Haverford College physics professor Bill Davidon. Without their extraordinary effort and courage, Herbert Hoover’s dirty tricks and illegal surveillance may have never been discovered. Catching them plagued Hoover for the rest of his life. More remarkable, they were never caught.

https://www.nytimes.com/2014/02/02/books/review/the-burglary-by-betty-medsger.html

Thanks

Thanksgiving in America is also a time for giving thanks and showing gratitude, so Charles Thomas and I both wish to thank our readers for reading and responding to our efforts to improve an industry desperately in need of repair. We especially appreciate our growing list of contributors, attorneys supporting our efforts we have chosen to support through their honesty integrity and experience. We would be remiss not to thank sales agents and developers trying to do the right thing by repairing broken customer relationships so that members can use and enjoy what they can afford. Charles, our advocates, contributors and I do this work and volunteerism so we can save vacations, not destroy them by tearing apart the industry. Let’s hope 2018 will be the year of working together. We can hope.

black fri

So that is it, another week over, some very happy ex-timeshare owners and two directors facing possible jail terms in the new year. Somehow I don’t think they are going to have a very Happy Christmas.

porridge

Don’t forget, before you deal with any company do your due diligence and check them out first, if you need any help in this, please do contact Inside Timeshare and we will point you in the right direction.

Have a good weekend.

 

monday again

Start the Week

Welcome to another new week in the world of timeshare, tomorrow Irene Parker has prepared an article following the news that Richard Cordray has stepped down from the Consumer Financial Protection Bureau. Part I is about the Manhattan Club, She begins with what the CFPB has done, including the investigation into Westgate, which was conveniently dropped after two years. But more on that tomorrow.

tribunal supremo

In Friday’s Letter from America, we began with the usual roundup from Europe, with the latest court cases. At the end of the day the news came in, too late for publishing, of yet another Supreme Court ruling being issued from Madrid.

In this case, Silverpoint have been ordered to return over £61,000 plus legal fees and interest to another client. The contract was also declared null and void, at present we do not have the full details of the sentence, but it would appear that the contract breached the timeshare law on several points.

As usual the main point will be the length of the contract, the law states that contract must be no longer than 50 years in duration, so the perpetuity contracts sold by Silverpoint contravene this. Once again the Supreme Court has made its point.

los claveles logo

On the story of Los Claveles in Tenerife, Inside Timeshare has received some comments from other members who do not appear to be in agreement with the Committee. They are either neutral or feel that Wimpen has acted in good faith.

Well, there are always two sides to any story or dispute, not all will agree, Inside Timeshare is happy to publish opposing views. We will also be looking into this and preparing a full article in due course.

In the meantime there is a link below which will start the ball rolling in bringing another side to the story and hopefully a little balance.

Inside Timeshare does try to get other views, quite often other parties do not respond, many emails are sent but no reply is ever received. Telephone calls are terminated, usually with you are through to the wrong department or even we don’t know anything about that. So thank you to those who did send in information.

http://www.losclaveles-alt.eu

 

jaw jaw

You have any comments or views on any article published, send them in using the contact form, we will either post them in the comments section or include them in any article.

Want to know if a company is genuine, once again contact Inside Timeshare and we will point you in the right direction.

letter-from-america

Friday’s Letter from America

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

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

gavela

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

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

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

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

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

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

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

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

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

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

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

cla-brochure

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

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

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

Timeshare Debt and Hedge Funds – The Developer vs the Member

wall st

By Justin Morgan and Michael Nuwer

November 17, 2017

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

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

Introduction by Irene Parker

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

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

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

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

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

Justin Morgan’s analysis

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

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

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

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

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

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

Michael Nuwer

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

chart1

Membership is down 9% since 2013

chart2

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

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

So what happens when someone buys timeshare points?

Let’s look at this example:

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

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

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

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

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

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

trust earned

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

Timeshare self-help Facebook groups

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

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

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

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

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

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

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

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

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

friday dog

 

vulture

The Tuesday Slot: An American Perspective and Comparison.

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

puerto rico

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

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

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

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

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

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

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

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

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

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

Witch

Part I – Puerto Rico and Timeshare Debt

Is Apollo Global Management involved with both?

By Irene Parker

Part II Friday November 17  

The Effect of Debt and Inventory Evaluations on Timeshare

By Contributors Justin Morgan, Australia and Michael Nuwer, US

November 14

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

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

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

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

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

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

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

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

Munis Meet Milken as Hedge Funds Dictate Puerto Rico Terms

Laura J. Keller

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

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

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

Vulture activity in Puerto Rico: Excerpts from Hedgeclippers

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

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

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

argentina

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

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

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

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

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

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

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

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

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

money man

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

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

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

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

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

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

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

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

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

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

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

not alone

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

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

 

letter from america

Friday’s Letter from America

Welcome to this week’s Friday’s Letter from America, we decided to run with this particular article following the news from Europe on Monday that Diamond was closing its sales offices in Europe. Obviously this will have a great impact on the many employees, who are now out of work and will need to find jobs in an ever decreasing sales industry.

As usual before we go on with our article, this week has not been a very good one for Silverpoint in Tenerife, with another loss at the High Court and also at the Supreme Court.

The judge at the High Court Number 2, found serious breaches of the timeshare laws, declaring the client’s contract null and void and ordering the return of over £49,000 plus legal interest.

At the Supreme Court in Madrid, the judges upheld previous rulings and declared another Silverpoint contract null and void. This particular client will now receive over 28,000€ plus all legal fees and legal interest. Another happy ex Silverpoint owner.

As usual these were clients of the Arguineguin law firm Canarian Legal Alliance. So this does go to show that in spite of what many timeshare companies are claiming, such as the article published on Wednesday about Anfi attacking CLA, this law firm is doing what it says.

CLA Logo

Now on with Friday’s Letter.

Inside Timeshare leapt at the chance to publish details of CLARITY, Diamond Resort’s program to promote accountability, transparency and respect for the Customer. The program was introduced after Arizona Attorney General Mark Brnovich issued an Assurance of Discontinuance accusing the company of violating Arizona’s Consumer Fraud Act. The Arizona Attorney General received hundreds of Diamond complaints. One source informed us the office received 400 complaints leading up to the investigation and 500 more complaints after the press release.

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

Diamond Resorts also provided a Diamond Resorts Consumer Advocacy Department to assist members from day one if they have concerns about their timeshare.

Inside Timeshare continues to receive complaints from members almost daily, with common complaints:

Purchase more points as that will be the only way to sell points. (Diamond’s secondary market restrictions make Diamond points almost impossible to sell.)

Purchase more points because that will provide you with the ability to pay maintenance fees by tendering excess points at 30 cents per point. (No such program exists as this is an adulteration of a 30/30 program designed for other purposes.)

Agents working for the same company selling against each other from the Hawaii Collection to the US Collections telling the member they made a mistake purchasing the collection they purchased, depending on which side of the Pacific the member is on.

Inside Timeshare has forwarded members complaints to Diamond’s PR firm and to ARDA. Both have ignored the complaints, but it is unlikely ARDA will enforce their Code of Ethics against a corporate member that gives ARDA a million dollars a year from Diamond members who unwittingly are billed $7 as an “opt-out” voluntary donation on their maintenance fee invoice. It is doubtful the average timeshare members understands even what the initials ARDA ROC stand for.

After reading complaint after complaint from our Nightmare on Timeshare series, I am certain our EU Diamond agents did not stoop to such tactics. Did this contribute to sales targets not being met?  Inside Timeshare has received 187 reader complaints, of which 178 are from Diamond Resort members.

Diamond Resorts Consumer Advocacy never returned Marsha’s call. One of Diamond’s Advocacy “hospitality” agents left one message but never returned her calls. CEO Michael Flaskey ignored Marsha Young.

A representative from Barclay’s Bank did contact Marsha Young. Although they cannot help, as Barclays does not physically open credit card applications, Marsha appreciated the respect she was given by at least being acknowledged.

You be the judge of Marsha’s story.

How Buying a Timeshare can be Financially Devastating

Luke

Introduction by Irene Parker

Since our first Inside Timeshare US member story was published October 2016, we have received 186 member complaints, of which 171 allege they were sold by deceit and bait and switch, meeting the FBI definition of White Collar Crime. Of the 186 complaints, 177 are from Diamond Resorts members. We don’t dispute there are many timeshare members who use and enjoy their timeshare points, but many have not yet been made aware of the lack of or limited secondary market. The majority of complaints allege they were told to buy more points because only at the next loyalty level could they sell points or be able to offset maintenance fees. Neither program exists. These members are stuck with a product they paid thousands of dollars for, felt were sold by deceit, incur maintenance fees and can’t sell. Their network of friends and family want nothing to do with timeshare. Sales centers should take note as Social Media no longer keeps members silenced and isolated. Diamond Resorts did not respond to our request for comment.

November 10

By Marsha Young

The vacation memories my husband and I shared together at Embassy Suites and Sunterra in Hawaii on the island of Maui are my most treasured, but our memories so precious have been destroyed. Maybe not the memories, but the timeshare we knew and loved has turned into a financial trap.

My husband passed away in 2011. I still travel some with friends and family and I enjoyed the flexibility of the point program until I succumbed to high pressure sales. In the past, when explaining the struggles of raising a family, or other reasons why we could not upgrade, agents would not push us when my husband and I said no, so I was not prepared for what happened. In an effort to warn others to seek counsel before you sign a perpetual contract after a six hour sales session, with rising maintenance fees, and no secondary market, I share my story.  

My problems began at the Diamond Resorts sales center at Williamsburg Virginia May 2017. I told the hospitality agent about how I had been deceived previously by a Hawaii sales agent. She told me she understood and explained that is why sales were stopped at the Williamsburg center for a while until a new program called CLARITY was put in place. My Williamsburg sales agents were Richard Rodgers and Mark Schilling. I told them I did not want to spend any more money as the maintenance fees were going up so much for the Hawaii Collection. They told me I should transfer my Hawaii points to the US Collection because maintenance fees would be less. The cost was never discussed. I thought there would be no charge. I saved the paper they used showing points transferring over to the US Collection. They also encouraged me to open a Barclay credit card because it accumulated points rather than miles, but neglected to tell me the card would be charged $7,100 for a down payment. I had sent an email to both Richard and Mark telling them I did not want to spend more money. The sales presentation lasted six hours. I was exhausted. When I got home and went to my DRI account. I was shocked at the new $34,000 mortgage. The maintenance fees did not go down.

I did not know where to turn so I called a friend who is an investment advisor. He called Mark Schilling. Mr. Schilling’s response was, “She signed the contract. The QA session was videoed.” Recorded QA Sessions are part of the new CLARITY program. The sales presentation is what needs to be taped because that is when sales agents make promises not kept.

Richard Rodgers told me $400 a month would be the maintenance fee but it is the mortgage payment, so I owe maintenance fees on top of the mortgage payment. I was also told I could still book Hawaii, but in July 2017 I went to a meeting in Hawaii and was told I should not have transferred to the US Collection, because I would not be able to get back into Hawaii. They also said the value of the Hawaii Collection was more valuable and had the highest availability. Jessica Ocegueda was the sales agent. She said I had traded down and if I want to go to Hawaii on US Collection points in all likelihood “it’s not going to happen.” I have learned from other members you still can book in Hawaii with US points. I was convinced to transfer all my US Collection points to Hawaii Collection.

After six hours, there is insufficient time or energy to review an inch high stack of documents. Diamond Resorts Consumer Advocacy never responded to my complaint, but they did send the Consumer Financial Protection Bureau and Barclays Bank my initials for the charge on a document.

  • Of the $138,000 approximate purchase price, $66,915 was taken back as credit for the US points and the balance financed was approximately $70,000
  • The down payment charged to my personal credit card was $8,529
  • A Barclaycard was charged $7,100
  • The monthly payment is $917.58
  • Estimated maintenance fee is $7,418

sad

At age 71, I watched my credit score plummet from the 800s to the 700s. I am a widow living on a teacher’s pension. I learned from reading Inside Timeshare articles and joining an Advocacy Facebook page, many have been told if they purchased more timeshare points, maintenance fees would go down. While the maintenance fee per point may decline a cent or two, the maintenance fee invoice does not decline. It’s easy for the resort defending their position to say, “You were confused,” but the volume of complaints found on the internet speak of sleight of hand, in my opinion.   

Not knowing where to turn I had contacted Irene Parker. Irene told me about the new CLARITY program Diamond Resorts implemented after the Arizona Attorney General issued an Assurance of Discontinuance, accusing DRI of violating the Arizona Consumer Fraud Act. She also said Diamond Resorts now provides an advocacy department for those who have concerns about their purchase. CLARITY is supposed to be about accountability, transparency and respect for the customer. I received none and was ignored by DRI Advocacy. It feels like the customer is always wrong.       

The actions of these agents have taken away my financial security. I feel trapped. It is not as easy or as enjoyable to travel without my husband. I can still travel with friends and would have been able to remain a Diamond customer had I not succumbed to an upgrade for reasons that were not necessary or true.  

I should have learned from the first bad experience I had in Hawaii. In Hawaii, I had been charged $2,995 for a program called the Sampler. I was refunded for that purchase because I did not know a credit card had been charged then until I returned home. Diamond said the agent, Mr. Frank Rippe, had been fired. They also said he had been the top selling agent of that particular product.

It is my hope timeshare members will continue to reach out to other members. It is a sad day when vacation timeshare plan buyers need a support group and a media outreach plan to warn other potential buyers.

act now

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/

As we read many stories such as this it no longer comes as any surprise, what does seem to be a recurring theme is the age group of the people that contact us. They also all have the same story, credit scores being destroyed, after years of no defaults.

One thing that did make me chuckle in Marsha’s story is Diamonds comment on the the sacking of the sales agent, “he had been the top selling agent of that product”, well that is not surprising if he was being that devious!

Once again Inside Timeshare thanks all those who provide us with the information and contribute their stories, if you would like to contribute contact Inside Timeshare. If you just require any information about your membership or about any company that contacts you or even thinking of doing business with, but don’t know where to start, contact us and we will point you in the right direction.

Have a good weekend and join us next week.

weekend

letter from america

Friday’s Letter from America

Another week over and another Friday’s Letter from America with Irene Parker, but first a very quick look at two cases announced this week.

Silverpoint have once again been on the receiving end of another Supreme Court verdict. They have declared the client’s contract null and void, ordering the return of over £43,000 plus legal fees and legal interest.

In this verdict the court stated that the contract lacked specific information required by law, such as a specific apartment number, date and location. It is quite clear that the Supreme Court has on more than one occasion clarified the law.

In another case heard at the Court of First Instance in Palma de Mallorca, Altres Vacances have been ordered to repay the client over 58,000€  plus legal fees and interest, with the contract being declared null and void.

This court has followed the Supreme Court rulings on the length of the contract, the law is very clear on this point, the contract must be no longer than 50 years. They must also contain specific information as required by law.

abogados-ag-250

Once again, we have to warn about the “fake” law firms operating out of Tenerife, part of the Litigious Abogados family, another reader has been in contact with the new firm Abogados AG, with Armando González Areca named as the main “lawyer”.

They state that following a “groundbreaking ruling on “Tuesday 19 March 2015” (very precise date), against Diamond Resorts International SL, one of the the directors, once again Andrew Cooper, has pleaded guilty to the indictment of the Spanish Civil Code. They also state that the High Court of Santa Cruz de Tenerife have declared 28 of their clients contracts null and void, seizing all the personal assets of Mr Cooper in Spain and the Canary islands.

Now according to this “law firm” they will be lodging the case against Diamond Resorts International Sl and Mr Andrew Cooper on the 7th November 2017, this will heard on Tuesday 21st November, very quick indeed, they must be very well in with the judges!

In the case of our reader, they no longer own any timeshare with Diamond, they got rid of that years ago, so there is no basis for any claim. Beware the claims that you have a case, if you no longer own you don’t, even if you do own you may not have a valid claim. Before engaging with any company that states you do have a claim, check and check again.

See the full letter below, pdf.

Abogados AG

So now on with this week’s letter.

Another Bluegreen Member Alleges a “Bait and Switch”

Sometimes Called “Pitching Heat”

cross fingers

By Irene Parker

November 3  

Back in July, Inside Timeshare published an article by Lela Renea, a detective who alleged she was deceived by a Bluegreen timeshare sales agent. Camyell Pratt, another Bluegreen purchaser, alleges she and her husband were also deceived.

The FBI definition of White Collar Crime, Financial Institution Fraud, is “deceit, concealment, violation of trust and bait and switch.” Inside Timeshare has received 179 complaints from readers, of which 164 allege they were victims of a timeshare bait and switch. https://www.fbi.gov/investigate/white-collar-crime

Lela Renea is a detective. Camyell understands bad debt. She assists in collecting back taxes for a Virginia County government office and understands the repercussions when someone does not pay what they owe. But what if the contract agreed to was purchased under conditions of fraud?

In timeshare, that doesn’t matter thanks to the clause that appears in every timeshare contract – “I did not rely on any oral representation to make my purchase.” In other words, any complaint that begins with “The salesman says” can be conveniently dismissed.

Bluegreen is certainly not the only timeshare company Inside Timeshare has reported on concerning questionable sales tactics by some agents:

A jury awarded Trish Williams, a former Wyndham sales agent, $20 million. Ms. Williams described TAFT days – tell them any blank thing on slow sales days.

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

Attorney General Mark Brnovich issued an Assurance of Discontinuance against Diamond Resorts accusing the company of violating Arizona’s Consumer Fraud Act.

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

New York Attorney General Eric Schneiderman issued an Assurance of Discontinuance against The Manhattan Club. Of note, The Manhattan Club admitted wrongdoing, unusual in corporate America.

NEW YORK – Attorney General Eric T. Schneiderman today announced a $6.5 million settlement with the owners and operators of the Manhattan Club, a timeshare in Midtown Manhattan, over the sponsor’s repeated false promises to potential and current share owners.

The settlement is the largest in recent history for the Attorney General’s Real Estate Finance Bureau. Under the terms of the settlement, the operators of the Manhattan Club, acknowledge that they repeatedly misled shareowners about the club’s reservation process, their ability to sell back their shares, and the details of the club’s state-approved offering plan.

https://ag.ny.gov/press-release/ag-schneiderman-announces-65-million-settlement-midtown-manhattan-timeshare-scammed

Colorado, Wisconsin, Tennessee, and Missouri Attorneys General took action against other timeshare companies.

As we’ve said before, the abnormal becomes normal, whether it be predatory timeshare sales or sex abuse in the Catholic Church or Hollywood. Victims are messengers to be beheaded or silenced and isolated through non-disclosure clauses. To my knowledge, except for The Manhattan Club, timeshare developers have not even acknowledged deceit on the front of the timeshare sale, despite thousands of internet complaints and lawsuits too numerous to mention.

Current and former timeshare sales agents and managers are also speaking out. As one manager explained:

I watched every day, agents selling for double and close to triple what it was supposed to be sold for but management laughed and congratulated them.  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 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!   It 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!

Some companies are trying to do the right thing. Bluegreen has been listening and taking appropriate action in some cases. Diamond Resorts has opened a Diamond Consumer Advocacy Department that pledges to help members from day one and has launched a program called CLARITY which promotes accountability, transparency and respect for the customer.

Instead of beheading the customer’s, legitimate attorneys, volunteer advocates and journalists, why won’t the timeshare developer not identify and drain the swamp of predatory sales agents? After receiving 179 complaints from our readers, at times we can guess the agent by the con.         

cartoon fraud

Camyel and Jayson Pratt

Camyell and her husband Jayson endured an eight hour Bluegreen timeshare sales presentation at Harbor Light in South Carolina. They were promised:

4000 points plus 6000 points plus two RCI weeks

Availability to a variety of resorts

What was delivered?

For 4000 points, according to one of our Advocates, also a Bluegreen member, the member can book a studio in winter on the wrong side of the weather report.

After filing a complaint with the Better Business Bureau, Bluegreen did offer to credit Camyell the additional 6000 points promised. Camyell declined, deciding she did not want to have anything to do with a company that would resort to such tactics. Nevertheless, Bluegreen credited the family 6000 points anyway.

Camyell said they were given no paperwork after they signed the contract, told the contract needed to be processed. They were given a booklet about Bluegreen and the timeshare exchange company RCI.

Let’s see how Camyell’s complaint compares to Lela Renea:

  • Lela was told if she purchased more points her maintenance fees would stay the same. The maintenance fees have increased from $560 a year in 2015 to about $700 a year for 2017.
  • Lela was told she would receive a free cruise, but after all the fees and charges it cost as much as if she had booked it herself.
  • Lela was told the Barclaycard had a low interest rate of 5% when in actuality it was 25%.
  • Lela was not told she was entitled to 4000 bonus points. The points expired before she was aware of them.
  • Lela was promised availability she says does not exist.
  • Lela was showed a Presidential Suite that was said to be comparable to all Bluegreen accommodations.
  • Lela was not aware she had purchased so few points it was almost impossible to find adequate availability.

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

Timeshare members have had enough. Timeshare has been employing tactics former timeshare sales agents call “Pitching Heat” or “No Heat No Eat” for too long.

Like so many of our readers have complained, Camyell was not allowed onto the booking site until after the contract rescission period. When she did finally gain access, she was informed she was not within the booking window and did not have enough points to book the stay she desired and says she had been promised.

Here is our advice for those not knowing where to turn:   

  • Prepare a written complaint and request for resolution. Submit to the resort.
  • If the resort denies the request, file first with the Attorneys General of the state where you signed a contract, where you live, and where the timeshare is domiciled. Some Attorneys General are influenced by lobby dollars, so don’t be discouraged if your complaint is denied. There is still merit filing “for the record” because the Attorney General’s lack of concern can be quantified and reported. Some states refer you to a different department.
  • File a complaint with the state real estate division against the agent (ID #) if you feel the sales agent is at fault.
  • File a complaint with the Federal Trade Commission because every state has incorporated some part of the FTC Consumer Fraud Act into their respective state consumer protection act.
  • Report your grievance to ARDA http://www.arda.org/ethics/ – this organization is the American Resort Development Association – Resort Owners Coalition. ARDA ROC does not resolve individual member disputes, but they do have a code of ethics that should be enforced. When the needs of the member and the developer diverge, lobby dollars go to the side of the developer, so think twice about the “voluntary” opt in or opt out donation to an organization that may not always be targeting your best interest.    
  • The FBI definition of White Collar Crime – Financial Institution Fraud – is “deceit, concealment, violation of trust and bait and switch”. File a complaint with IC3.gov if this is the case. IC stands for Internet Crime, but your complaint does not have to involve the internet. That’s just the FBI portal for complaints. https://www.fbi.gov/investigate/white-collar-crime
  • File a complaint with the Consumer Financial Protection Bureau, although this agency has been vastly diminished due to the rollback of the Dodd Frank Act. According to a banker I spoke with recently, they are still the regulators. File with this agency only if a credit card played a part or there is a loan outstanding.
  • Reach out to local and national media. This is by far the most important and effective tool. Typically, timeshare buyers don’t buy a timeshare in their state of residence, so state lawmakers have expressed little interest and can also be influenced by lobby dollars. http://www.orlandosentinel.com/news/taking-names-scott-maxwell/os-gov-rick-scott-signs-bad-timeshare-law-20150617-post.html
  • Become an Advocate for change by assisting other members with the process outlined above. Encourage others to act.
  • File a complaint with the Better Business Bureau. The ⦁ BBB does not resolve complaints. They merely report how efficiently a company responds to complaints so ratings can be misleading.

None of the above agencies will act on behalf of a specific individual, but a volume of complaints can prompt an investigation.  

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If you or anyone you know has a timeshare story to share, or needs help with a timeshare issue, contact Inside Timeshare or one of the following self-help Facebooks:

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

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

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

 

There we have it, Friday is here, the weekend is about to begin, have fun and don’t forget, do your homework before you deal with any company. If you are in any doubt, contact Inside Timeshare and we will point you in the right direction.

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