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Irene Parker

News From America: Wyndham Launches New Surrender Program.

Carrying on with our theme of news from across the “Great Lake”, Irene Parker has again sent her article which will be of interest to timeshare owners in Europe, especially those who own in the USA.

This article focuses on a new initiative by one of the largest timeshare concerns in the USA, Wyndham, which is based in Parsippanny New Jersey. It seems the company is going to be leading the way in providing a more accessible relinquishment program for owners. This could also pave the way for the demise of those unscrupulous companies that offer relinquishment or “guaranteed deed-back” and resale scams, which many owners in Europe are familiar with. These scams cost timeshare owners all over the world thousands of dollars, pounds and euros in upfront fees, these fees are being charged to beleaguered timeshare owners who are unable to keep up with the rapidly rising maintenance fees and assessments.

Unfortunately a relinquishment or “voluntary surrender” program does not help those owners who have outstanding loans or finance agreements, usually having succumbed to high interest payments on these loans, typically 14% to 18%. Inside Timeshare has published articles on these loans and the predatory practices of UK bank lending.

If the Wyndham model proves to be successful, could it pave the way for other timeshare companies to copy, saving  the industry from the bad image of holding prisoner elderly owners and those who can no longer afford the maintenance fees. Only time will tell.

Wyndham Launches “Ovation” Timeshare Surrender Program

By Irene Parker, October 27, 2016

Wyndham Vacation Ownership has been among timeshare industry pioneers in providing owners with comprehensive information about reselling and helping them exit timeshare units they no longer want to use.

The company’s exit program differs from many competitors in its detail and helpfulness. Many timeshare companies do not offer well-articulated policies. A number of them make it difficult to resell timeshare properties. That is reflected in the high number of units that timeshare owners continue to relinquish because of age or an inability to carry maintenance fee costs.

Wyndham Worldwide has been operating for 50 years. The company’s well-established names include Club Wyndham, WorldMark and Shell Vacations. In addition to timeshares, Wyndham Worldwide Corporation offers lodging and vacation exchange and rentals through RCI.

The company’s timeshare exit program, Ovation, offers a number of options for relinquishing a Wyndham timeshare with no fees, hidden costs or additional purchases required to participate. That differs from a number of timeshare companies and also from transfer and cancellation companies.

“Our goal is to help owners transition to the next phase of their life and reach as many owners as possible, before they are contacted by fraudulent companies,” said media contact Lori Ford. “The program offers various options based on individual ownership, eligibility and circumstance and we continue to see a strong owner response, with over 47,000 owner inquiries since its introduction.”

The timeshare industry has improved its reputation, but is still struggling to overcome years of questionable practices by a number of major operators, and some companies continue to make it difficult for timeshare owners to relinquish their shares in properties. The industry also continues to include unsavory practices among operators and companies that provide supporting services. Among the major issues:

Transfer agents offering beleaguered timeshare owners “guaranteed deed-backs” at a cost averaging $3,500 to $7,000, fraudulent listing agents offering to list your timeshare for an upfront ad fee only to disappear, callers claiming to have someone interested in your timeshare, bogus timeshare “renters” claiming to represent the timeshare developer.

Wyndham Vacation Ownership even offers their members a “Scambusters Hotline” providing owners with informational scam reports and updates along with a hotline to call if an owner suspects suspicious activity or feels they are being targeted.

Wyndham’s first buyback program, known as “Pathways“, came under intense scrutiny in that it was accused of being a scheme designed to get owners to buy more points. The one-sided contract, signed only by the timeshare owner, promised an “opportunity” to sell a timeshare back to Wyndham, if the owner purchased an additional 20% of the points they already owned.

Clearly, the “cottage industry” of timeshare scams developed because or the lack of a secondary market. The industry in general has been reluctant to face the issue of unwanted timeshares. I asked Gregory Crist, President of the National Timeshare Owners Association (NTOA) why is there such a disparity of opinion when it comes to consumer reviews of timeshare companies and especially timeshare resale programs.

“Until the timeshare industry supports a robust secondary timeshare market, we will continue to see an increase in predatory timeshare exit companies clamoring to take thousands of dollars from timeshare owners to get them released from their timeshare obligations. Until now, it has been difficult to get anyone’s attention,” said Crist.

Voluntary surrender programs leave owners with nothing. While no one should expect a timeshare to be a lucrative investment, legitimate resale programs do allow an owner to recoup, at best, fifteen percent of an owner’s overall investment. At least a secondary market allows a nominal dollar amount back to the timeshare share owner in an age where affordable vacation options abound outside of timeshare.

https://www.clubwyndham.com/cw/discover/scambusters-wyndham.page

https://www.clubwyndham.com/cw/discover/ovationbywyndham.page

http://www.thestate.com/news/business/article13846319.html

http://www.ntoassoc.com/

Inside Timeshare would like to thank Irene Parker for her article, it is very enlightening and will show owners here in Europe that there are some companies out there who are at least making a sensible effort. Inside Timeshare has published articles on one company which is renowned for not letting people out of there contracts, or if it does charges a hefty price for doing so.

http://insidetimeshare.com/mcdonald-resorts-no-stranger-bad-press/

http://insidetimeshare.com/bbc-scotland-investigates-problems-timeshare-contracts/

If you have any questions about this or any other article,  contact Inside Timeshare and we will be pleased to help. If you require any information about any company you may be thinking of dealing with or just want to know how to find it, Contact us through the comments section, we will then contact you via personal email.

My Thought Today: End of October

So here we are the end of another month, we started October with news of a Supreme Court ruling which stated that “Fractional” was indeed timeshare. In this instance Puerto Calma, Holiday Club Finland was ordered to repay over £235,542.00 as they had sold it as an investment.

Then Inside Timeshare reported the news of the first prosecution in the ongoing Anfi Tauro Beach Project.  The former head of the Canarian Coastal Authority José Maria Hernandez has been charged with administrative malfeasance (wrongdoing in public office) and forgery of official documents. The prosecutor Javier Ródenas considers that Hernandez verbally authorised the works despite warnings of serious breaches then committed an act of forgery by drafting a document which was then signed by him in April. This document gave the impression that it was written in February when the work actually commenced.

Local residents build defences to protect their homes

We then published an article from Gran Canaria Info which explained recent developments into the goings on at Anfi.

http://gran-canaria-info.com/content/timeshare-law/anfi-del-mar-and-the-future-of-gran-canaria-timeshare-in-2017

This online publication is a great source of information to the expat community and visitors in Gran Canaria, it often publishes in English, news from the Spanish press.

letter from america

Moving on from timeshare matters in Europe we published a piece by Greg Crist, the CEO of NTOA (National Timeshare Owners Association) in the USA. He explained about a timeshare donation scheme which had recently been slammed by a US Federal Judge. In this scheme, owners donated their timeshares, which were valued at high amounts and then received tax relief as charitable donations. The scheme has cost the tax man around $19.4 million.

http://insidetimeshare.com/u-s-federal-judge-slams-timeshare-donation-scheme/

Greg again sent over information on what was happening across the pond, with the article about combating fraud. It was very much a month of information from the USA with articles from the Orlando Sentinel and Irene Parker on Marriott facing charges of “Racketeering”.

Irene Parker submitted another article, this time on how Barclaycards are being issued by timeshare sales staff. Irene was comparing this to the scandal of finance being arranged by sales staff in Europe without the normal due diligence being carried out. We finished the US theme with Irene´s article on timeshare and politics and how it is split between the two political camps.

The Anfi Tauro Beach project again hit the headlines with the news that the current Mayor of Mogan, Onalia Bueno has been place under investigation for licences and permissions for the project. This followed on from the first prosecution and is still underway.

Also published was an article on Trustees in the timeshare industry and whether they are independent or not. This article was prompted by several enquiries from readers, with some of the content supplied by them. legal clipart

So to finish the month, Canarian Legal Alliance announced another two Supreme Court victories on behalf of their clients. In the first to be announced on 26 October, their client will receive 11,806€ and their contract declared null and void. Again the court reaffirmed its position that floating weeks are illegal, this case was against Anfi.

In the second announcement made on Thursday 27 October,another Supreme Court ruling, again against Anfi. In this ruling the client has been awarded 19,000€ and again the judgement was about floating weeks. The contract was also declared null and void. This now brings the total of rulings from the Supreme Court in respect of timeshare contracts to a staggering 27, with more still waiting to be heard, so there is more of this to come.

Just as we were about to publish news came in of yet another victory at the Supreme Court in Madrid, this brings the total number of rulings from the highest court in Spain to a phenomenal 28, you can’t argue that this particular law firm is not doing what is says.

The latest ruling this time involves another resort, Palm Oasis / Tasolan, the court ruled the client was not provided with all the information required by law, this resulted in the court ruling that the contract was flawed. In this instance the contract was declared null & void with the client being awarded 10,608€ plus legal interest. It would seem the courts in Spain at least, are on the side of the consumer, it only now needs other countries to follow that example.

It now remains to see what November will bring, if it is like this month it certainly will keep Inside Timeshare Busy. Have a good Halloween night and enjoy the party.

haloween

More News from Across the Pond

With the US Presidential election now coming to a close over the next week, Irene Parker, who collaborates with Inside Timeshare on matters which affect timeshare on both side of the Great Lake (or Pond as our American friends call it), has sent in her most recent article.

It very much focuses on the political game that is affecting timeshare in the US, showing how it splits into Republican and Democrat, as she explained, the industry is very much pro Republican, the Trump camp, the Democrats seem to be supported by the timeshare owners. We should not be surprised by this.

Irene has very often commented on the documentary “The Queen Of Versailles”, the wife of the owner of Westgate, David Siegel. It shows the 90,000sq ft property they have been building as their home. It is quite staggering, with a walk in wardrobe (sorry closet), bigger that most homes in Europe. Irene has in many writings dubbed herself “The Peasant of Venice” in contrast to The Queen. Have to admit Irene does have a great sense of humour. Irene claims it’s not humour if one studies Polish and Russian history and the need for peasant uprisings.

Irene opens her article on the New York Manhattan Club, when the Democratic New York Attorney General Eric Schneiderman halted trading of timeshare. As you will see from her article, it is a very murky world indeed, the lines between timeshare and politics are blurred to say the least. Enjoy her article it reveals a lot.

Timeshare Battles Split Down Political Party Lines

October 26, 2016

By Irene Parker submitted to Orlando Sentinel

Democratic New York Attorney General Eric Schneiderman made headlines taking on presidential candidate Donald Trump and the Trump Foundation. Mr. Schneiderman claimed the Foundation did not meet certain administrative requirements necessary to receive donations in New York.

In addition to challenging Trump, Mr. Schneiderman has also taken on another developer and billionaire, Bruce Eichner, and Eichner’s Manhattan Club timeshare. Mr. Schneiderman halted timeshare sales at the Manhattan Club due to allegedly fraudulent sales practices involving a “bait and switch” scheme. Manhattan Club buyers learned there was a lack of availability for those who purchased memberships, while the general public could easily book online. A court battle that began in 2014 continues today.

The New York Post unleashed an onslaught of criticisms against Mr. Schneiderman accusing him of picking his fights based on political motives.

Republican Florida Attorney General Pam Bondi created her own headlines when she accepted a $25,000 donation from Donald Trump while considering whether to participate in a Trump University investigation. Her investigation was dropped after receiving the donation.

There is an eerie similarity between Trump U and timeshare sales, illustrated in an extraordinary CNN interview between Trump U salesperson James Harris and CNN investigative reporter Drew Griffin. Not all timeshare sales agents are predatory, but complaints about overly aggressive sales tactics abound.

In the CNN interview, Harris is accused of exploiting the elderly by selling them classes averaging $34,000 and then “up selling” them to attend more classes. In rogue timeshare presentations, an average timeshare week costs $25,000 and after the initial purchase, owners are barraged to purchase additional points or weeks.

Keep Reading

Irene Parker: Barclay Card and Timeshare in the USA.

Back in July Inside Timeshare published the article about Shawbrook Bank setting aside around £9 million, to cover defaults in loans issued by timeshare sales staff. It announced that the bank had not carried out its due diligence in accepting these finance agreements.

The article also highlighted the ongoing high court action brought against Barclay Partner Finance for loans issued for timeshare. These were for the so called “investment” packs being sold by Resort Properties / Silverpoint. Many of the agreements were given without the normal checks being carried out in respect of the clients income or the ability to repay the loans, with many of the applications being falsified in order to get it passed.

Another aspect of the article showed the same thing happening in the USA, with people who did not qualify for normal finance, being passed to a Credit Union. In this case the company was Quorum Federal Credit Union, which would then sign them up as members. These loans accounted for around $40 million for Diamond sales.

It has now been highlighted that sales staff in the US are issuing credit cards, again it is Barclays who are in the picture. Irene Parker, sent the following article.

Barclay card by Irene Parker 10/24/16

barclay-card

There is nothing wrong with travel reward credit cards, but when consumers on vacation get locked into timeshare presentations that can last for hours; credit card lending can turn predatory.

Several banks have come under fire for overzealous sales practices. Wells Fargo and Barclays Bank through Barclays Partner Finance, along with other U.K. banks, have come under regulatory scrutiny and been the subject of lawsuits for a host of reasons, including predatory lending through the use of timeshare developer-sponsored credit cards.

Shawbrook Bank in the U.K. has admitted that it didn’t do its due diligence when approving the finance for vacation ownership products. One of its biggest partners is Diamond Resorts International, a timeshare company that has come under fire for its aggressive sales practices.

Diamond offers a Diamond Resorts Barclaycard Master Card with a 0% promotional six month APR if used for a Diamond Vacation Ownership Interest down payment, along with Diamond Resorts International reward points for other purchases. After that, it is a variable APR of 15.24%, 19.24% or 22.24% depending on creditworthiness.

Diamond Resorts International’s primary business segments are hospitality and management services and vacation ownership interest, or vacation points sales, and financing.

It is the financing component that often makes people with vacation brain sign a contract on impulse for perpetuity, not even having used the vacation service at the time of purchase. The decision is often based on how well the buyer likes the resort if they aren’t an existing owner. In other words, they may not use the booking program until the next vacation.

As an example, Arthur Saldana, 55, and his wife Sylvia, 49, have been Diamond Resort International owners for several years. They owned a deeded week at the Sunterra London Bridge Resort in Havasu, Ariz., for about 10 years prior to Diamond Resorts International acquiring Sunterra in 2007.

The couple was persuaded to give up a deeded week, one that came with a deed that has a limited secondary market, in exchange for timeshare points that are non-deeded with no secondary market. During a series of five sales presentations over a five-year period, the Saldanas accumulated 30,000 Diamond Resorts International points that elevated them to gold status in 2013.

Sylvia Saldana said that she and her husband signed many contracts, and they thought they were actually helping their children. “We thought that after we paid off the Diamond mortgage our four children would only have to pay maintenance fees,” she said.

But maintenance fees increased to the point where they could no longer afford to own their points. The family soon found that they had to charge maintenance fees to their credit card in order to pay them.

The Saldanas had already taken out a $33,000 home equity loan from their credit union to reduce the high Diamond Resorts International loan interest rate, typically 14% to 18%.

Worse, the children, now almost grown, say that they have no interest in timeshares.

At their last stay at a Diamond Resorts International resort in August 2015, Sylvia Saldana said that a sales agent tried to convince them to purchase another 10,000 points in order to achieve platinum level, which is 50,000 points (Remember they owned 30,000 points).

The sales agent explained that by being platinum, it would allow the couple to pay their maintenance fees with their points, as only platinum members are allowed to use their points to pay maintenance fees, Sylvia Saldana said.

At the time of the 2015 presentation, Diamond Resorts International’s FAQ indicated that as of that year, only platinum members could exchange points for a monetary credit toward the cost of their annual maintenance fees for their collection membership and points and/or dues for the club.

A Diamond Resorts International representative who gave her name as Pamela — these reps aren’t allowed by the company to provide their last names — confirmed that “only platinum members can use their points to pay maintenance fees. Any member can open a Barclaycard to pay fees.”

When we purchased our Diamond Resorts International contract, we were told that the practice of using points to pay maintenance fees isn’t encouraged due to the point value being reduced to pennies on the dollar if used to pay maintenance fees.

The sales agent aggressively tried to persuade the family to open a Diamond Resorts International credit card to pay for the additional points, despite the fact that they couldn’t afford the fees, Sylvia Saldana said.

Arthur Saldana became so angry, he left the presentation.

Fortunately, the couple realized that the credit card wasn’t a prudent solution to their problem.

Keep Reading

Marriotts Face Charges of Racketeering.

Last week the Orlando Sentinel published a story that Marriott Vacation Club and First American Title Co. the trustee for Marriotts, are facing a class action lawsuit which alleges racketeering.

 

It involves their points system which they started in 2010, to replace the traditional weeks system, which is governed by real estate law. The suit filed by Anthony and Beth Lennen claim they had to pay fees associated with real estate, such as closing costs and recording fees, title policy premiums and real estate taxes.

 

They also claim they were forced to purchased title insurance. First America claim that the Lennens purchased this insurance of their own volition, they have also filed their own 27 page motion to have the case dismissed.

 

Marriotts attorney has also filed a 50 page reply to the lawsuit, and claims that the plaintiffs have misread the statutes they believe have been violated. He also states that the allegations are unfounded and the Marriott system complies fully with the law. Marriott are also seeking to have the dispute transferred to a state regulator to be reviewed, Greg Crist of the NTOA said he would welcome a review of the allegations by a state regulator.

 

The term racketeering is usually associated with organised crime, so these allegations are very serious indeed, especially as Marriott do have a reputation as one of the good guys in the timeshare industry, especially in Europe.

al-capone

Inside Timeshare’s American colleague Irene Parker wrote the following:

 

Timeshare and the Definition of Racketeering

 

October 14, 2016

By Irene Parker    

 

The Orlando Sentinel yesterday reported on the proposed class action lawsuit against Marriott charging racketeering. The charges stem from a lawsuit that began May of this year claiming Marriott charges fees associated with real estate without actually owning real estate.

The charge of racketeering is intriguing. According to Investopedia, racketeering is often associated with organized crime. The example used described a group of people slashing tires in a neighborhood only to have a second group, composed of members from the first group, sell protection.

There is a clear parallel to trends in timeshare. Timeshare used to be real estate when “fixed weeks” were sold. The trend towards a points based “currency” has led to cloudy definitions as to what a timeshare really is these days.

Timeshare contracts are perpetual, meaning they are designed to extend beyond the owner’s lifetime. Contracts in perpetuity are not in essence bad, according to timeshare attorney Mike Finn of the Finn Law Group. “Perpetuity can apply to real estate or personalty. Personalty simply means personal property – something as simple as a new shirt. A primary residence or vacation home is a perpetual contract. By definition, there’s nothing wrong with that. The problem comes about in timeshare when no secondary market exists.”

This leads us back to the definition of racketeering. There is a wide assortment of timeshare scams. The practice has become so widespread, Wyndham actually provides owners with a “Scambuster’s Hotline”.

Timeshare transfer agents charge timeshare owners seeking a way out of a timeshare contract an upfront fee offering them a form of “protection” by releasing owners from timeshare contracts. The fee often ranges from $3500 to $7000 but provides a “guaranteed deed-back” of the timeshare. Transfer agent companies often have lofty sounding names like “Redemption and Release”.

What happens to the timeshare after it is transferred out of the owner’s name? The contracts are bundled 25 to 50 and sold back to developers. Some timeshare companies offer owners voluntary surrender, but the surrender is not guaranteed so owners denied are forced into the nets of transfer agents.

In an ironic twist of fate, there are double racketeering schemes in which the deed taken back is transferred to a dummy company that disappears. Thus, the timeshare resort rightfully does not honor the transfer and the surprised owner receives an invoice for maintenance fees because the transfer did not take place. The owner is out thousands of dollars while still owning the timeshare. At least in racketeering, real protection is given. It’s a sad day when timeshare becomes less honorable than racketeering.

For the original article published in the Orlando Sentinel follow the link:

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

If you have any questions or need any information about any article published, contact Inside Timeshare and we will try to answer them.

      

 

My Thoughts Today: End of September

The end of another month is upon us, one story to hit the news this month once again involved the Anfi Group, it was announced the Lyng family had sold their 50% share of Anfi to the construction and hotel group Lopesan IFA. It was reported that Lopesan paid 41.3 million euros, which does seem to be a bit of a bargain. There again, with the woes that Anfi are going through, is it surprising? There is the investigation into irregularities in licences and permissions granted for the Tauro Beach project, which is being conducted by SEPRONA, a branch of the Guardia Civil. Then we have all the Supreme Court rulings which are costing Anfi a fortune in claims. These stories are not over yet and we wait for more to be revealed.

seprona

 

 

 

 

 

 

September has also been very much an American month, with articles by Irene Parker being published. These articles show what is happening across the great lake (or the pond as our American cousins call it), starting with the Letter from America: News From Across the Great Lake. In this article Irene sent an open letter to Stephen J Cloobeck of Diamond, it was her response to his letter to members on the Apollo acquisition.

 

This was then followed by the article on resale and transfer, it included an article from Tom Tubbs, who is on the advisory board of the National Timeshare Owners Association. It highlighted a subject which timeshare owners in Europe have also experienced, that of rogue resale and transfer companies. It also explained how this operates in the US, with a new company called Timeshare Transfer Registry, they keep a check on who and what companies the timeshares are being transferred to. But as he says the “scam” still goes on.

 

In More News From Across the Pond, we published a piece highlighting the Fox News programme The Property Man: Bob Massi. He is a Las Vegas attorney with a reputation as a determined advocate of consumer rights. This was followed by an article with an update to the real estate regulations in the US.

property-man

 

 

 

 

Then there was the visit of Irene Parker and her Husband, Inside Timeshare had the pleasure of playing host to their visit. For Irene it was her first time on the island and was very much a fact finding mission for her future articles. We spent much time comparing notes and learning from each other the problems that many owners have on both side of the Atlantic.

 

During her visit, Irene met the lawyers and staff of Canarian Legal Alliance, which she has followed from the US. While meeting with one of the lawyers Cristina Batista, she was able to get the history of the Supreme Court Rulings and how it is affecting timeshare in Spain. From there she then met with the staff at the admin office who look after the clients. As she said to Inside Timeshare it was an eye opener, stating that on her return she would share what she had learnt with other colleagues battling to help owners.

2016-09-23-15-57-03

It was was not all work, and we all enjoyed several evenings with good food and company. Her last day was a trip to El Faro de Maspalomas, for a little shopping and to see for herself the Lopesan hotels. This ended with a superb lunch at a beach side restaurant. We will be publishing her articles as they appear.

 

Other articles published this month included a warning of a text message to Diamond owners. This informed them of the Supreme Court rulings, but it is not clear where they originate from, the telephone number is an untraceable “burnt” phone, linked to a facebook page with no details.

 

There was also more news from the Supreme Court with an incredible sum being awarded to one UK client. In this judgement the court stated that fractional ownership did indeed come under the timeshare regulations, it awarded £235,542 against Puerto Calma Holiday Club Finland. More announcements followed with a ruling against Palm Oasis Tasolan SL and a ruling against Silverpoint in Tenerife.

 

After an enquiry about the RDO, we published the article The RDO: Does it Protect Consumers? This article laid out what the RDO is and who it actually serves, it is a subject that has been covered in previous articles. But it is always good to republish, especially in the light of recent events.

 

So that is September, we wait with baited breath for the events to unfold during October. With all that is going on it should be an interesting month.

 

If you require any information about any article published, contact Inside Timeshare and we will find you the answer. Have a good October.

US Real Estate Regulations Update.

Further to the article highlighting The Property Man Bob Massi, Irene Parker informed Inside Timeshare that all States except one define VOI (Vacation Ownership Interests, points) as real estate. However Diamond‘s own contracts state (although buried within) insist that the membership is not real estate. The Diamond annual report also states they are not subject to real estate laws.

 

All this is very confusing to say the least, even Irene is confused and she lives in the US! So she kindly put me in touch with one of her contacts who was once a sales agent ILX and the after the acquisition and Diamond agent. Mark is a licenced broker, for 4 years he has been challenging the ADRE (Arizona Department of Real Estate) regarding “fraud” in the sales process of Diamond products. He has kindly sent the following information, which I have produced below, the reason is he explains it better than I could, after all I did say it was confusing. The following is his story:

 

Key to abbreviations:: ADRE Arizona Department of Real Estate. VOI Vacation Ownership Interest: AZ AG Arizona Attorney General.

 

In Arizona any sale of a property interest within the state requires licensing of ALL sales agents. All transactions are to be reviewed by the designated broker or their licensed assistant. The designated broker is liable for all transactions, and conduct of agents. The conduct of all agents is regulated by statute, Diamond has a designated broker in Sedona for all their properties.  


ARTICLE 11. PROFESSIONAL CONDUCT
R4-28-1101.
Duties to Client
A.
A licensee owes a fiduciary duty to the client and shall protect and promote the client’s interests. The licensee shall also deal fairly with all other parties to a transaction.
B.
A licensee participating in a real estate transaction shall disclose in writing to all other parties any information the licensee possesses that materially or adversely affects the consideration to be paid by any party to the transaction

While Diamond trains (requires) its sales agents to commit fraud, there is a clause in the brokers manual (which is not disclosed by broker) which states that the agent shall indemnify Diamond in the event of ANY action is taken against the company for misrepresentation, to the extent that the agent will even cover Diamond’s legal fees. I brought up the fact that the broker did not disclose this at the time he required me to sign a receipt for his manual, agreeing I understood and would abide by the terms however ADRE was not interested.

Most RE development within the state requires that all buyers receive what is called a public report It is  viewed by ADRE as a disclosure document that carries sufficient importance to the buyer, that pre- approval of its content by ADRE is required before sales can commence. Diamond and other companies selling VOI’s in the state are required to give buyers a public report.

It is important to note that it is a somewhat generic document and does not include material information regarding how a timeshare interest is structured, no explanation of the difference between a deeded interest and a VOI, or mention of relevant statue regarding sales and administration of these systems. This has left the door open for pirates like Diamond to circumvent disclosure requirements mandated by licensing, while openly committing fraud in the sales process. By alerting buyers to the existence of their RE license Diamond agents falsely present to buyers that they are being protected by RE statute.

In general real estate ALL sales must include a sellers disclosure document that requires all known material facts affecting the value of real estate being sold be disclosed by the seller. It is known as a SPUDS and intentional withholding of material information is grounds for civil litigation and other administrative penalties.. As I have been arguing repeatedly with the AZ AG and ADRE, since no SPUDS is given in connection with a timeshare, the sales presentation constitutes an oral SPUDS with appurtenant disclosure obligations.

During my 6 month tenure with Diamond I filed multiple administrative complaints against Diamond’s designated broker for lack of mandatory supervision. ADRE investigated those complaints and would not have done so if Diamond’s product was not considered real estate and subject to applicable statute. I was required to maintain an active license to sell Diamond’s poisoned pill. I have found in public records that Diamond’s broker entered into a consent order, and paid a fine for allowing an agent to continue selling VOI product after his license expired. ADRE could not have taken these administrative enforcement actions without Diamond’s VOI being legally defined as a real estate product in AZ.

This was the basis of my argument to AZ AG and ADRE that institutionalized fraud was being committed on the public by lack of enforcement pertaining to regulation and the insistence of continuing to classify VOI’s as a real estate holding when in fact Diamond’s own contracts states to the contrary and insists in clear terms (buried in an obscure place) that the membership is not a real estate interest. Clear as mud, that’s how they like here in sunny AZ.

 

As you can see, things are not as clear cut as we thought, Europe is not as big a minefield as the US. But this could be a very big problem for those in Europe who did purchase in the US, especially as they would not be aware of the regulations there.

 

As more information comes in, Inside Timeshare will publish it here, thanks to Mark and Irene for their input into these articles, it has helped to clarify some important points.

 

If you have any questions or information regarding this or any other article, Inside Timeshare would like to hear from you.

More News From Across The Pond: Bob Massi The Property Man

Following on from some of the articles highlighting the problems timeshare owners have in the United States, Irene Parker sent Inside Timeshare the following link:

 

http://www.foxnews.com/leisure/2016/06/09/tired-your-timeshare-heres-how-to-unload-it-without-losing-money/

 

Bob Massi is a Las Vegas attorney known as The Property Man hosting a show aired by Fox News, who is a very determined advocate of the rights of consumers. In one case Irene points out a couple he helped resolve the issue of their bankruptcy, it took them five years to attempt to buy a house, then they found that the bank had not foreclosed in the first place.

 

He has also highlighted the problems in the timeshare world and as you can see from the video, gives the consumer some sound advice. He points out that unlike real estate, timeshare does not appreciate in value, that many owners if they are able to sell, only recoup a fraction of their original investment.

fox-news

So this is not just a problem we have in Europe, it affects timeshare owners in the US. In his article, he points out how to sell the timeshare or how to just get out, in the interviews with licenced resale brokers they explain how to safeguard yourself from the “scam artists” that promise the earth and deliver nothing. He also explains how one particular scam works, this is where you have listed your timeshare for sale on a marketing website, the next thing you know, a bogus company is in contact with you saying they have a buyer. (Think of the corporate buyer pitch or even the Russian market one, we have many buyers waiting!). Now in order to conclude this “deal” a closing fee is required upfront, guess what? You never hear from them again.

 

According to the video, timeshare is in the top 10 of scams in the US, this is probably the same for Europe. He also interviews the Florida Attorney General Pam Bondi, in this she states they worked with the timeshare industry to enact laws to curb this abuse. She points out that since the laws were put into place they have closed down numerous firms, around 41, in many cases they have also secured convictions.

 

In the US, as we have highlighted before timeshare is regulated by real estate laws, sales staff must be licensed, if not they can’t sell the product. For those in Europe who own timeshares across the pond, the problem of how to get out is even more difficult, mainly because of the differing state laws and the distance involved. There are some companies in Europe who can help to get out of the timeshare, but if you are looking to sell, this article will help. You could also contact The Licensed Timeshare Resale Broker Association, (see link at bottom of the page), it consists of 64 members and works completely within the legal framework, all members must adhere to regulations and the codes of conduct set out by the association. But remember, as stated in the video many timeshares sell for only 10% of the original purchase price, contrary to what you were told at the initial presentation.

ltrba

Irene and her husband have also recorded an interview with Bob Massi, it is hoped that this will be broadcast in the Autumn (fall in American), when it is we will publish the links here. We also look forward to more articles in The Street by Irene, including one she is working on now.

The following link is an article about Bob Massi, it gives a very good insight into the man himself, the type of work he engages in and what it means to him, Hope you enjoy it.

 

http://www.reviewjournal.com/business/longtime-lawyer-sees-himself-advocate-underdogs

 

If you require any further information about this article, or any timeshare matter, contact Inside Timeshare. If we don´t know the answer we will find out for you.

More From Across The Pond.

As we all know trying to sell your timeshare or as they like to call it today “holiday ownership”, is a bit of a minefield. Who can you trust?

 

Our friends from across the Atlantic have the same problems, you think you have got rid of your timeshare, then suddenly you receive the annual maintenance bill. The resort does not recognise the transfer. This happened to many people who ended up buying into Designer Way Vacation Club several years ago.

 

With this particular scheme, you “sold” your timeshare to DWVC but had to pay many thousands of pounds to become a member of their club. The perks, well, you could stay in the same resorts for a fraction of the cost, discounts on flights, and off course no more maintenance bills. Oh yes, I almost forgot, you also were given a “cashback” certificate, this was for the value of your timeshare plus a bit extra for the cost of your membership. Then after registering it (which was a nightmare task), you had to wait around 5 years for it to mature. If you were lucky you may have got a few quid back, that’s if you claimed correctly.

 

Then after finding that the so called “discounts” were not what you were told at the presentation, (actually costing more), you suddenly received a maintenance bill for several years arrears. All this with the threats of legal action by a debt collecting agency. DWVC did not transfer your timeshare, or the resort did not recognise it.

 

This has also happened to one old lady who owned a MacDonalds timeshare, Yes, I am referring to Mrs B. Her timeshare has been sold for 1euro, (she actually paid the company around £7,500 to relinquish, not sell it). MacDonalds is now chasing for maintenance arrears because they do not recognise the transfer.

for_sale

Following is an article written by Tom Tubbs, an advisory member of The National Timeshare Owners Association, the American equivalent of TATOC. In this article he clearly shows how some companies in the US operate and how it affects the resorts and owners. This was sent to me by my American colleague Irene Parker.

 

By Tom Tubbs

Island Consulting Realty – NTOA Advisory Board Member

 

We’ve all heard the radio commercials, received the postcards in the mail, seen the TV ads, seen the web sites:

 

“Get out of your timeshare now! Call us today. Guaranteed or your money back!”

 

“You own a timeshare you can’t sell? We guarantee to get you out”.

 

“Dear friends. This is ‘Mr/Ms. Celebrity’. I trust these people”.

 

Now, think back. Remember the similar ads we heard from different companies years ago? Where are those companies now? What happened to them? Are these just new companies who rose up to fill in the gap? Hmmm…..

 

So, how is it that you could sell your timeshare but continue to be on the hook for the maintenance fees? What I’m going to share with you is a real story that is taking place right this minute. The names are changed, obviously. The way it’s being handled is not brand new, but relatively so and it’s happening more and more and more. Read the story and make sure you don’t fall victim to this.

 

So we’ve told you in the past about “transfer companies”. You pay them $3500 or so and they take your time share from you and they promise that your days of owning a timeshare and paying the maintenance fees are done. Many of these are perfectly good timeshares that could be sold and money put into the pockets of the owner, but if you’re a reader of this newsletter you know the stories the transfer companies tell you to convince you to give up your money. These companies for the most part have no real estate license so that they don’t have to worry about a state agency looking over their shoulder. Many of them come and go quickly…..with your money.

 

But there’s a new sheriff in town. A company called Timeshare Transfer Registry (real name) monitors timeshare transfers. They are especially suspicious about transfers going into the name of an LLC or Trust. Suspicions go up when they see 10, 20, 50, 100 or more timeshares being transferred into the same name. Resorts can register with TTR to try to protect themselves from being deceived by the transfer company.

 

So here’s what happened. “ABC Resort” (names are changed now) gets a copy of a recorded deed showing one of their owners sold their timeshare to “Whoopie Doo, LLC”. The resort contacted Timeshare Transfer Registry and learned that Whoopie Doo owns a LOT of timeshares. It’s looking pretty obvious that the LLC will never pay the resort a maintenance fee and the resort at some point will have to foreclose (that’s what happened to your timeshare). You don’t care, right? You’ve sold your timeshare and the deed is out of your name, right? Wrong……to an extent. You’re definitely going to care. Here’s why.

 

The resort notified the LLC that they noticed the LLC has purchased a LOT of timeshares and it looks like an obvious case of a transfer company about to dump the timeshares on the resort; costing the resort a ton of money. The resort refused to acknowledge the transfer.

 

In an interesting twist, the LLC contacted the resort and swore up and down they were not the same “Whoopie Doo, LLC” that owns so many time shares. Seriously? Really? The resort contacted National Timeshare Owners Association (NTOA, http://www.NationalTimeshareOwnersAssoc.com/) asking for advice. (Now in the interest of full disclosure I want to mention I am on the advisory board of NTOA. Before I became a member of the board, however, I was singing the praises about this organization for a long time. Becoming a member [talking about you, dear reader] is not a bad thing. You know I would never steer you wrong). I was asked my opinion about this. I advised that the resort tell Whoopie Doo to go pound sand. Whoopie will probably threaten legal action but the resort should stand firm. The last thing con artists like Whoopie Doo want to do (hey! That rhymes!) is walk into a court of law.

 

So now here is an interesting situation. You’ve paid a company $3500 to take your time share. You have signed the deed over to this LLC. You actually no longer own the timeshare, this is technically true. But the resort is refusing to acknowledge the transfer which means you are still on their books as the owner and you’re going to get a maintenance fee bill each year! Congratulations! Now, you won’t find this out until you get your bill next year. By that time, good luck on finding those nice folks who took your $3500. You now no longer own a timeshare and you’re on the hook for the yearly maintenance fees.

 

“Wait”, you say, “How can the resort refuse to acknowledge a lawfully recorded transfer of a deed”. (we heard you thinking this). Well, there’s this little thing called fraud. It was a fraudulent transfer designed to make money by bringing harm to the resort. (As a side note: Some resort who have been burned by this are now suing not only the folks behind the LLC but also the original owner [that would be……you] claiming fraud).

 

So how do you protect yourself? First, if you find yourself in a situation where you want to sell your timeshare, call us. It’s what we’ve done for folks for the past 30 years and we offer different programs depending on what you have and your particular situation. There’s not many folks we can’t help. And for the few we can’t help, we can refer you to the right person who can or offer free advice on what to do. Secondly, if you’re bound and determined that you trust that famous celebrity or the nice person across the table from you who wants you to pay them a lot of money, ask them for a copy of their real estate license. They should offer no excuses, no “this doesn’t apply to us” stories; they either have one or they don’t. If they don’t, well……..I’d hate to be writing a story about your situation in an up-coming newsletter.

 

At least in the US there is a company which tries to ensure this does not happen, The Timeshare Transfer Registry, but even with this in place the scam still goes on, not only losing thousands for the owners but also for the resorts.

 

So what can you do about not getting caught, unfortunately there is no straight answer. All you can really do is check the company and check again, ask your resort do they recognise the company you are dealing with. If you are undertaking a private sale, again check with your resort on how the transfer is done legally. Once the transfer is complete, again check with your timeshare company or resort that you are no longer registered as the owner and liable for maintenance.

 

The biggest problem is actually finding someone who wants to buy it in the first place, just look on ebay! There are alternatives to trying to sell, some resorts will take them back, for those that do not, then there is a legal process of relinquishment. Yes this will cost, the amount again depends on the company, but beware, as Mrs B found out she paid for a relinquishment but ended up with a transfer of ownership to another person and this is not recognised by the resort.

 

If you have any questions about this article or any other timeshare matter, Inside Timeshare is here to help. Contact through the comments section and will find the answer or point you in the right direction.

News From Across the Great Lake.

On many occasions Inside Timeshare publishes news as it comes in from the United States, much of this comes from my colleague Irene Parker. Irene is a long standing Diamond member, although she and her husband are happy with the holidays and membership over the years, she has highlighted the main problems in many articles. Irene also publishes articles in The Street, an online financial journal, in these articles she mainly highlights the stocks and shares side of the many timeshare companies. Whether they are a good investment or not and the reasons behind some of the falls in these share prices. (see link to her latest article in The Street at foot of the page).

 

In many of her articles she also highlights what they call in America as the secondary market, or to us in Europe the resale market. The fact that no secondary market exists for owners of Diamond Resorts International, is one of the biggest complaints owners have. Another that we are very familiar with in Europe is the difficulty in being able to exit your membership. In the US, the perpetuity contract is not illegal, unlike in Europe where the EU Directives on Timeshare have stated contracts should be for no longer than 50 years. As we have seen from the Supreme Court rulings in Spain, this is actually helping people to get out of their contracts and in many cases being paid back the full purchase price for being sold an illegal contract.

 

Many people in America are watching the events here in Europe, especially in Spain, taking stock of the way timeshare laws are being implemented. Some are even wondering if these laws can be brought into place for them in the USA.

dri logo

Following is the email she sent with a letter from Stephen J Cloobeck of Diamond, she also points out two complaints on Tripadvisor, then her own letter to Mr Cloobeck.

 

An Open Letter to Mr. Cloobeck from Irene Parker

 

A Message from Stephen J. Cloobeck

 

Dear Members and Owners, 

I am thrilled with the completion of the acquisition of Diamond Resorts by an affiliate of funds managed by affiliates of Apollo Global Management, LLC (“Apollo”), and am confident that this transaction will only enhance your vacation experience at Diamond resorts worldwide. 

Diamond Resorts was founded on the platform of The Meaning of Yes®, a customer-centric ideology that elevates the hospitality experience above all else. The company goes above and beyond to deliver exceptional vacations to its members, owners and guests so that you can enjoy a lifetime of memories and experiences that can be passed down from generation to generation. Over the years this platform has transformed into a core belief and our philosophy of We Love to Say Yes®. 

 

Recent complaint posted on Trip Advisor:

 

  1. Re: Diamond Resorts International (Trip Advisor)

Sep 01, 2016, 10:10 PM

To Glenvine32 – my husband and I got caught in this scam to our incredible embarrassment. We thought we were smarter and I should have read reviews before we went to their presentation in May in Sedona, AZ. It was a 4 hour ordeal and we bought a worthless 2500 points which we have not used nor plan to. We have since heard from their own reps that we should have never been offered so few points, that those were add on points to be purchased by owners – not prospective buyers. We are retired and will never get value out of these points even if we buy more which we absolutely have no plans to do.

Having read so many negative reviews now I am concerned we will have little recourse. It’s bad enough losing the 13k but to be held to annual fees for at the rest of our lives? Have contacted them by phone and have drafted a letter to send by registered mail. Probably won’t get a reply. I don’t want to resign myself to the loss of the money but what’s worse is how it will affect my credit. Any thoughts? How did you do?

Complaint #2

I am at the Cancun resort in Las Vegas and went to a breakfast where they said they would simply update me about the changeover to Diamond. I was told that I should have been invited to a dinner where I would have been given options, decided by a judge in a legal ruling against Monarch due to their bankruptcy. They proceeded to show me a print out that said when my current term expires in August. I would have to pay $573 per quarter to Monarch. They said that due to the bankruptcy, I would have no equity. That was option one. Pay more, have nothing. The other option they said was to transfer into Diamond at a cost of $12,000 plus and pay a yearly maintenance fee of $1,700. Less than the $2,292 I would soon be giving Monarch. They also told me that I would then have equity of $41,000 that I could sell. I was in tears. I do not have any extra money. In fact I have been looking for ways to get out of Monarch for over a year now. They said that was not an option and that as an owner, I was now proportionally responsible for their debt. I felt trapped and signed all the papers to transfer, with no idea how I can pay. After reading the comments above I am even more scared. I am trying to start my own business and am already in severe debt. They claimed when they ran my credit though that it looked better than most and assured me I qualified for financing. I would have to pay off, basically transfer to credit cards, which I can barely make my payments on now before I could look to sell. One of the reps assured me that she would put me in touch with someone who could help me sell my points. She even gave me her cell phone number to call after the sale/transfer is finalized. I am really scared though. Please help! We have to do something. It seems as though they have no qualms about lying to and robbing people for their own benefit.

September 5, 2016

Dear Mr. Cloobeck,

If I were you, I would be thrilled with the millions you and other insiders made on the Apollo leveraged buyout; along with the millions paid out in executive compensation.  For Diamond owners who are widowed, elderly, ill, unemployed or victims of high pressure sales, slogans like “Stay Vacationed!” and “The Meaning of Yes” feel like a cruel taunt.

According to a Kroll Bond report, Diamond employs 90 full time collectors making over 100,000 calls per week via a dealer. These calls originate because of being told no. All firms have a few bad apples and complaints on the internet, but complaint sites are flooded with Diamond Resort and Westgate complaints.

Please explain to me how the contract I signed is different from a junk bond in that it became worthless the moment I signed it if I could no longer travel and needed to sell. In the subprime mortgage debacle, even properties foreclosed could be sold.

My husband and I have used and enjoyed timeshare for over 25 years without a question or complaint until Diamond purchased ILX. We signed a contract that said we could sell points. We also asked several times if we would be able to sell points if we could no longer travel and were told we could.

The first person who told me Diamond points cannot be sold was attorney Bob Massi of the FOX show Property Man. After Property Man aired a segment explaining how to unload a timeshare, I contacted David Cortese of Magical Realty. Mr. Cortese was featured on a Property Man segment stressing the importance of using a licensed resale broker to sell a timeshare, rather than listing or transfer agents that come with a minefield of scams.

I wrote to Mr. Massi after enduring a pathetically aggressive sales presentation at Grand Beach in Orlando last July. We were promised three times we would not be paired with a commissioned agent. We were greeted and tortured by three commissioned sales agents.  

In a timeshare presentation, an agent gleefully explains how Diamond has many affiliated resorts. Our daughter lives in New York City. In searching for a Diamond location, I found a Diamond affiliated resort. It required 63,000 points. It was the least expensive offered. This equates to over $10,000 in our maintenance fee dollars. Booked through the hotel, the cost including taxes is $2,693.  I will be sending a copy of this letter to NY Attorney General Eric Schneiderman, one of the few AGs actually on the side of the consumer. I doubt there is a sales agent in the Diamond organization that would explain affiliated properties are not discounted. A Diamond representative explained that these Diamond offers are for platinum owners who have so many points they don’t know what to do with them. They are probably short on math skills.

Never imagining I would earn a response from Mr. Massi, I was contacted and learned the show received a multitude of timeshare complaints after airing “The Queen of Versailles”. The producer told me I was the only person selected for an interview because I was the only person that said I would like to talk about timeshares positives in addition to the negatives.

It is my understanding that not one member of the 64 member Licensed Timeshare Resale Broker Association will buy or sell Diamond’s non-deeded points or Westgate weeks due to restrictions placed on the use of points purchased on the secondary market and other tactics designed to restrict the secondary market.  I also leaned members of the LTRBA will buy and sell all Diamond’s competitor programs except Westgate. I sent a survey to all the members and received 16 responses. These I compiled and forwarded to the Attorney General of Arizona and the Consumer Financial Protection Bureau.  

The Trip Advisor complaint I included with this letter has convinced me that Diamond has become so brazen; the company is confident it can get away with anything indefinitely and unchallenged. Unless an owner is fortunate to live in a state like New York or Tennessee, Attorney Generals do not seem to consider timeshare abuse a cause worth pursuing.

Many of the complaints are about availability and maintenance fees. The 15% pure profit Mr. Palmer bragged about to shareholders, added on to maintenance fees, is excessive. In a Latticework article written in cooperation with ADW Capital, the lack of a secondary market is mentioned as a reason to buy Diamond stock. From my research, I have determined Diamond and Westgate are the only two timeshare companies that have restricted the secondary market to the extent it does not exist.

I have written an article entitled Sometimes a Diamond Resort Dream Vacation Turns into a Nightmare. Diamond’s in-house council, Ben La Luzerne, said he hoped he could help the Saldana family devastated by Diamond’s rising maintenance fees and victim of high pressure sales. They were told to get a home equity loan to reduce Diamond’s high interest rate.  I am still waiting to hear back from the family before publishing the article, hoping for a positive outcome.

What I am asking, is for Diamond to reach out to a few members of the LTRBA to see what would be needed to create a secondary market. Unlike most internet complainers, I can live with the maintenance fees and the problems with availability. I would like to enjoy my retirement instead of researching, on a daily basis, how Diamond is ruining the financial lives of so many, especially the elderly.

I look forward to hearing how we can work together to stop the harm Diamond is placing on the ill, the widowed, the elderly, the unemployed and the victims of the oral representation clause protecting Diamond and be able to say YES! to the people .

Sincerely,

Irene Parker

The Peasant of Venice (Florida)    

As you can see, our cousins across the pond are not very happy with how Diamond Resorts International operate. They too are locked into contracts which are almost impossible to extricate yourself from. The fact that their so-called investments in Vacation ownership Interests (US term for holiday ownership) are virtually worthless. Lets hope that they take stock of what is happening in Europe and use it to help the many owners in the US to get some protection.

Inside Timeshare thanks Irene and the many others who have contributed to the information we share with you, we also thank the many readers in the US for their support of this publication.

If you have any questions about this article or any other matter, Inside Timeshare will be pleased to answer them. If you are looking for advice on who to go to for cancellation of contracts or possible claims, Inside Timeshare will help point you in the right direction.

Link to The Street article by Irene Parker

https://www.thestreet.com/story/13653117/1/the-timeshare-industry-has-improved-its-reputation-but-still-faces-scrutiny.html