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Irene Parker

One Foot In The Grave!

“I don’t believe it, I just don’t bloody believe it!” said Victor Meldrew. But yes it is true, the Supreme Court has just issued their fourteenth and fifteenth judgements.

 

Canarian Legal Alliance just keeps them coming in, they announced this news late yesterday 13 July 2016. On Tuesday the court awarded 18,500€ to a UK family and declared their contract null & void because it was longer than the 50 years stipulated by law. The following day Wednesday another UK family had their contract declared null & void and awarded 13,000€, including double the deposit back for payment within the 14 day cooling off period. They had also been sold floating weeks, again in contravention of the laws laid down.

 

The Supreme Court has now consistently ruled that contracts over 50 years, floating weeks and points along with the taking of deposits within the cooling off period, are contravening the laws on the selling of timeshare in Spain. It now has to be asked when other countries are going to enforce these rules which were laid out by EU Timeshare Directives?

 

Spain is obviously leading the field in this area, with these judgements all lower courts must now abide by them.

anfi logo

So, just in the past week Anfi have been penalised for considerable sums, the question now is how long can they sustain this? There are more cases waiting to be heard by the Supreme Court, all because Anfi have taken the decision to appeal rulings by those lower courts. If they had any sense, I would have thought they would pull out of those appeals and just admit defeat.

 

The next question is how long will it be before other companies such as Diamond and Club la Costa have more cases brought against them? Is it the death knell for timeshare in Europe?

 

How will this news affect Apollo Global Management after their takeover of Diamond Resorts International? There are already rumours across the great lake that Wyndham is looking to buy the shares, the price has already been put at around $36 to $39 a share. I hope to get some insight into this from my American colleague Irene Parker who writes for the financial journal The Street, ( see link for her article on Hilton). Inside Timeshare will keep you posted on this as and when the news comes in.

 

Once again Inside Timeshare congratulates these two families and the legal team of Canarian Legal Alliance for their splendid work. They certainly have paved the way for others to follow.

 

If you need any information or advice on any timeshare related matter, Inside Timeshare will do its best to provide you with the best answers.

 

https://www.thestreet.com/story/13636683/1/hilton-worldwide-and-spinoffs-are-good-investments-now-or-later.html

TWO MORE SUPREME COURT RULINGS FOR THIS WEEK

 

 

Shawbrook Bank Announce Irregularities in Timeshare Loans, Similar Activities in the USA.

For many people their Timeshare or Holiday Ownership was paid for on Finance, these loans were usually arranged on the day of signing the contract by the sales staff. One of these lenders is a bank called Shawbrook Bank, with their head office located in Brentwood Essex. The bank was founded in 2011 and according to their web site works closely with the holiday ownership industry to provide finance for their customers.

 

Unfortunately it was announced recently that the bank had set aside around £9 million to cover any defaults in these loans. This has come about due to the discovery of irregularities in the issuing of these loans.

shawbrook

Shawbrook Bank has admitted that it did not do its due diligence when approving the finance for holiday ownership products. One of its biggest partners is Diamond Resorts, whose aggressive style of selling has resulted in many people being over stretched financially, then being lumbered with a product that they find is unworkable. They are also stuck with management fees that are continually rising, also being unable to get out of their contracts.

 

http://www.telegraph.co.uk/business/2016/06/28/shawbrook-banks-shares-plunge-on-9m-hit-from-dodgy-lending/

http://www.thisismoney.co.uk/money/markets/article-3663651/Shares-Shawbrook-drop-challenger-bank-reveals-loan-irregularities-cost-9m-finance-chief-quits.html

 

What did Shawbrook miss on its due diligence?

 

Quite simple, finance agreements made out by sales staff on the day of the sale have not had the usual credit checks made. Normally when a loan is applied for there are several checks that are made, we all know this as at some point we have had them. Firstly, does the applicant earn enough to qualify for the loan. Secondly, can the applicant actually afford the repayments, after other payments are taken into consideration, i.e. mortgage, living expenses etc. Lastly does the applicant have a good credit history, in other words have they defaulted on any other finance, be it loans or credit cards, or have they had county court judgements made against them

 

All these are the usual checks, being unable to fulfil any of these criteria would normally prevent the loan from going through.

 

Another aspect is how the applications are filled out, Many people spoken to over the years have said that the application had been filled out by the staff. It later transpired that the purpose of the loan had been made out as “home improvements” nothing to do with the purchase of holiday ownership. In some cases, even the income has been falsified. Unfortunately, for the applicant this could lead them to the possibility of criminal charges, after all they have signed the form.

edwincoe

This is not the first time a bank has hit the news in relation to holiday ownership, Barclays Partner Finance has been the subject to action in the High Court on this matter. Edwin Coe LLP, represented many clients of Resort Properties, who had been sold “investment packs” which were then financed by Barclays Partner Finance. On 16 August 2015, Edwin Coe LLP announced that the High Court had decided in favour of the consumer.

http://www.edwincoe.com/our-expertise/group-action-litigation/resort-properties-barclays-partner-finance/

http://www.edwincoe.com/high-court-decides-in-favour-of-the-consumer/

 

Many of these loans did not have the usual credit checks made, in fact Inside Timeshare is aware of an elderly couple who had been given one of these loans. They had been talked into one of the Resort Properties / Silverpointinvestment packs”, at the time he was 8o years old his wife 76, the loan was for £30,000, yet both are on pensions. When Inside Timeshare spoke with them, the question asked was, had you gone to your bank, do you think they would have provided the loan? Well we all know what the answer to that is. They are now taking legal action.

barclays

Unfortunately this is not just the case for Europe, in the United States the same controversy exists.

 

Roddy Boyd of the Southern Investigative Reporting Foundation has been highlighting this, on 27 April 2016, he published an article on a Credit Union which has been supplying loans for Diamond Resorts clients. Quorum Federal Credit Union has been in operation for 82 years, as with all credit unions they are member based.

quorum

http://sirf-online.org/2016/04/27/the-enabler-and-the-lifeline-diamond-resorts-and-quorum-fcu/

 

Quorum, has been supplying loans for the holiday ownership industry for years, Diamond Resorts are their largest portfolio. Diamond tend to send the riskier applicants to the credit union, these are those in the lower credit ratings, what the Americans call “subprime”. In other words the banks would not touch them with the proverbial barge pole.

 

According to Roddy Boyd the deal provided around $40 million in loans for Diamond and in return these borrowers became members of Quorum. Sounds like a win win for both, (not the consumer).

 

At least Shawbrook Bank have admitted that it has seen a problem in this area, setting aside a substantial amount to cover any future problems. In the end a loan for a holiday product which will on average be around £10,000 or more, is a huge commitment, not one that should be signed and approved on the day. Especially by the sales staff who have a vested interest in getting the “deal”.

 

Inside Timeshare would like to thank Irene Parker of the The Street for supplying the link to Roddy Boyd´s article. Do read it in full yourself as we have only just touched the surface, also read the following link, again it makes interesting reading.

 

http://sirf-online.org/2016/03/07/27464/

 

If you have any questions relating to this article or any others published contact Inside Timeshare and we will try to find the answer for you.

News from across the Atlantic.

Recently Inside Timeshare has been collaborating with Irene Parker, who writes for the online Financial Journal The Street. Irene is a long time Diamond owner and has had many battles over the years, she has highlighted the way members are treated and the continual upgrading resulting in many people having financial difficulties.

 

She has written many articles on the subject of timeshare, mainly showing the financial side regarding the stocks and shares. Thanks to Irene and The Street, Inside Timeshare was able to break the news about the buyout of Diamond by Apollo Global Management. So it would seem that members of Diamond Resorts in Europe are not alone in how they are treated, they do have allies over “The Pond”.

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

collaboration

Scott Miller published an article in Latticework titled My Investment Case for Diamond Resorts International, this appeared to incense quite a few people, so Irene added her questions to it creating the Virtual Interview. This is it, hope you enjoy.

 

Is There a Disconnect Between Timeshare Owners and Venture Capitalists?

My apologies to John Bird and John “subprime” Fortune

 

By Irene Parker

July 7, 2016

I believe there is a bit of a “disconnect” between owners and venture capitalists.

http://latticework.com/my-investment-case-for-diamond-resorts-international/

Mr. Scott Miller, founder of Greenhaven Road Capital wrote the above article in defense of Diamond Resorts International.

The following are my responses to Mr. Scott Miller’s declarations about Diamond Resorts. His instructor was Adam Wyden of ADW Capital. Front Four Capital and ADW sent a letter to David Palmer last year urging a leveraged buyout – or in Wall Street lingo – exploring alternative ways of maximizing shareholder values……

 

My virtual interview with Mr. Miller:  

Keep Reading

Diamond Resorts or A Nightmare on Timeshare Street.

sunterradri logo

Diamond Resorts were unknown in Europe until the takeover of Sunterra in 2007, for many members, they believed it was going to be a new start. Sunterra formerly Grand Vacation Club had a reputation that was to say the least heavy handed, the sales side was aggressive and showed no quarter to those pulled in from the streets. Long standing members with fixed weeks refused to change as they had originally been sold their timeshares as “investments” in property. They also had the right to vote on maintenance fees and other matters which affected the resort they owned.

 

When Sunterra filed in the US for Chapter 11, which is the equivalent to filing for bankruptcy, many owners wondered what would happen to their “investment”. For those on holiday the talk around the pools and bars was what would happen next, rumours abounded. Information was non existent, the sales decks had been closed with all the reps being laid off. There were still a few of the in-house reps but they had no idea what was going on.

 

It was then announce that a new company from the States was looking at taking over from Sunterra. The takeover was announced in the Las Vegas Review Journal 28 April 2007. Steven Cloobeck´s privately owned Diamond Resorts paid around $700 million, and also took on responsibility of Sunterra´s debt of $375 million. Was this the new beginning the owners had been waiting for?

 

Unfortunately, as time has moved on, it has turned into a nightmare for many.

 

The points system was marketed very aggressively, more so than under Sunterra, owners were basically forced into converting. Around 2008 the first additional levy was introduced, Diamond claimed it was due to the state of the Euro to the Pound. This was only the start, in the first three years management fees increased by around 20-25% annually, for many owners this was a huge burden and they wanted out.


Keep Reading

Diamond Resorts Bought by Apollo Global Management

News came in to Inside Timeshare yesterday afternoon 29 June 2016 that a Private Equity Firm, Apollo Global Management had bought Diamond Resorts International.

 

The deal is reported to be worth $2.2 Billion, the stock for Diamond had risen from $25 to $29 a share within hours of the announcement. One analyst in the States, Chris Demuth has already suggested that the Wyndham Group may even purchase the company. He believes that Wyndham may even pay around $36 to $39 a share.

dri logo

Apollo Global Management was founded in 1990 by Leon Black, he was a former banker with Drexel Burnham Lambert. Drexel had closed earlier that year after a securities scandal which resulted in the bank having to pay $650 million in fines. Being unable to repay a $100 million debt it collapsed.

 

According to the online financial journal The Street, Bloomberg had called Drexel Burnham Lambert “Renegades of Junk”, due to its involvement in the junk bond market. Irene Parker a writer for The Street and a Diamond timeshare owner herself, believes that this title is more fitting for Apollo Global Management after its acquisition of Diamond Resorts. (follow link below).

 

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

 

In her article for The Street, she explains her anger at the way Diamond has treated owners of its timeshares. She is in the process of writing a series of articles highlighting this, Inside Timeshare will be keeping you informed as they appear.

nyt logo

On the subject of the share prices, Inside Timeshare published an article in April, based on a report by Gretchen Morgansen of The New York Times. It highlighted the plunge in share prices following a series of reports about Diamonds treatment of owners, especially the elderly. It followed the story of a 77 year old lady called Mary Ann Gutierrez, she was subjected to an intense presentation by Diamond reps and basically held captive for around 5 hours, It was an attempt to upgrade her for a steep upfront fee, even though she had firmly told them no she was not interested.

 

The article also highlighted how Diamond hike up the maintenance fees after it buys a bankrupt resort. European owners are well aware of this themselves, after all they did see huge rises when Diamond took over from Sunterra around ten years ago. We are also well aware of how they make it virtually impossible to get out of the contracts. For those who purchased in Spain there is at least hope that these contracts can be declared “Null & Void”, also resulting in all the original payments being given back. All this has been made possible due to the strengthening of the laws in Spain, and the rulings of the Supreme Court, these can be found on the Canarian Legal Alliance website. (see following links).

 

http://insidetimeshare.com/diamond-resorts-international-share-price-falling/

 

http://www.canarianlegalalliance.com/diamond-resorts-court-case-victory-2/

 

If you have any questions as to how this may affect you, contact Inside Timeshare and we will try to find the answers for you. If you would like to know where you stand as far as making a claim or how to get out of your contract Inside Timeshare will be happy to give you the best advice and information possible.