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The Tuesday Slot with Irene

Welcome to the Tuesday Slot with Irene, today we welcome yet another new contributor Mike Yelton, edited as always by our very own Irene Parker. This article will also be of interest to our readers in Europe, as many have been victims of similar tactics, so we are asking our readers, both members and hopefully developers, to weigh in on the discussion questions posted throughout Mr. Yelton’s article.  

The deception that prompts the presentation, as happened to Mike and Joyce Yelton,  is often the reason why the ultimate end is the timeshare exit company when the developer will not address these issues.  

If the developer would clean up the sales process, the back end of the timeshare exit problem would go away, or at least be reduced. Until the developer owns up to their being a part of the problem, the angry and desperate timeshare owner is here to stay..

Is Freewheeling Credit Card Lending Here Again!?

The Over Reliance on Credit Card Lending

Our Stormy Point Village, Summerwinds Experience

By Mike Yelton, Army and Air Force Vietnam Veteran

May 22, 2018  

Introduction by Irene Parker

Was this Elder Fraud?  

Was this Credit Card Fraud?

Was this an Unfair and Deceptive trade practice?

Was Summerwinds resolution to the Yelton’s offer fair?

Inside Timeshare has been receiving an increase in complaints about timeshare credit cards opened onsite and credit card charges made without authorization. This is exactly what the Consumer Financial Protection Bureau worked so hard to put a halt to when Wells Fargo agents opened credit card accounts without the cardholder’s knowledge. Undeterred, Wells Fargo moved on to a $1 billion penalty announced April 20, 2018. This penalty was levied due in part to interest rate-lock promises. Mike and Joyce Yelton’s timeshare upgrade experience is somewhat similar, although they were promised a rate lowering.   

Another Wells Fargo Settlement

WASHINGTON, D.C. — Today the Bureau of Consumer Financial Protection (Bureau) announced a settlement with Wells Fargo Bank, N.A. in a coordinated action with the Office of the Comptroller of the Currency (OCC). As described in the consent order, the Bureau found that Wells Fargo violated the Consumer Financial Protection Act (CFPA) in the way it administered a mandatory insurance program related to its auto loans. The Bureau also found that Wells Fargo violated the CFPA in how it charged certain borrowers for mortgage interest rate-lock extensions. Under the terms of the consent orders, Wells Fargo will remediate harmed consumers and undertake certain activities related to its risk management and compliance management. The Bureau assessed a $1 billion penalty against the bank and credited the $500 million penalty collected by the OCC toward the satisfaction of its fine.

https://www.consumerfinance.gov/about-us/newsroom/bureau-consumer-financial-protection-announces-settlement-wells-fargo-auto-loan-administration-and-mortgage-practices/

Here’s what happened to Mr. and Mrs. Yelton. I have interspersed discussion questions hoping our readers will offer their input in our comment section. We encourage responses from the industry in addition to reader responses. We hope meaningful dialogue will help bridge the gap between the angry timeshare member and the timeshare provider.         

By Mike Yelton

My wife Joyce and I, both 79 years of age, bought a Stormy Point Village timeshare in Branson, Missouri in 2015 and upgraded in 2016. We enjoyed our stays there and had no major complaints until December 2017 when we attended what they said was a ‘mandatory update meeting’. We were told that if we did not attend we would lose our benefits. At that meeting we feel we were deceived and lied to. We may be older, but we are not stupid.

Discussion Question 1

Do you think it is fair for a timeshare member, who has made a prior purchase of a deeded week, be required to attend an update, threatened with the risk of losing their benefits if they did not attend? The Yelton’s would not have become angry owners had they not attended the meeting and we would not be writing this article.    

At this mandatory update, the salespeople presented what they described as a “change in need” or an exchange in benefits. We were led to believe it was not an upgrade. They said they could lower the interest on our loan if we opened a new lower interest rate credit card.

Discussion Question 2 & 3

Do you think this was more an attempt to open credit card accounts and sell an upgrade, rather than actually addressing the customer’s needs?

Was the “change in need” enough of a reason to tell the Yelton’s they would lose their benefits if they did not attend?

Due to our health we cannot travel far from home. We don’t live far from Branson. We were told if we wanted to limit our use to just Branson, two weeks could be broken down into four parts. We signed the papers, but later we found out we had purchased an upgrade which we did not want or could afford.

We felt we had become a victim of the unauthorized opening of credit card accounts and unauthorized charges made. We were not aware the cards had been opened or that an amount had been charged. We didn’t know the cards had been opened until not one, but two Bank of America credit cards showed up in the mail! We had agreed to one card being opened because they said it would be at a lower interest. It was never mentioned the card was being opened for the purpose of buying an upgrade. The cards have been canceled as Bank of America agreed they were opened without our knowledge.

Discussion Question 4

Was it deceptive to tell the Yelton’s the card was being opened to lower their interest rate if charges were made to make a purchase? What could have been done so that the Yelton’s would have been aware the card was being charged to purchase a timeshare product? From members young and old, we are hearing about credit cards opened and charged, and even loans taken out when the member was not aware. It seems the first thing a sales agent does is to run the card to determine the credit limit and then back into the maximum point purchase.  

To our utter dismay we learned that the sales agent charged $7,000 on a card opened in my name and $4,000 on a card opened in Joyce’s name! The salesperson told us we could charge up to $11,000 on the card but he NEVER said he was actually charging that amount of money or that he was opening two cards. He just charged it without even asking! We both were there. He told us we would get a check in the mail, which we should sign and send in, in an envelope that would be included with the check. We have no idea what the check was about, but no check ever arrived.

Discussion Question 5

Should the sales agent have explained to the Yelton’s why they would receive a check in the mail? This question was asked to encourage timeshare buyers to challenge vague statements like this. For example, Inside Timeshare has received many complaints from members purchasing additional points because they say they were told “You can pay your maintenance fees by charging purchases on the new credit card.” The problem is – the consumer typically does not ask the next question: What is the actual value? If 1% is credited, a family would have to charge $100,000 in one year to pay a $1,000 maintenance fee bill.    

We expected Summerwind to cancel the deceptive upgrade. We sent a letter of complaint to Summerwinds which they ignored. We then filed a complaint with the BBB which did get a response. Summerwinds asked us to take down the complaint so we could discuss the issue without a third party. They offered us a cancellation on the upgrade but not a full cancellation of our timeshare, which would have required the prior outstanding loan be cancelled.   

Discussion Question 6

Do you think the offer Summerwinds proposed was fair?

We will allow the cancellation of the last upgrade.

The debt prior to this purchase is still your responsibility.

We will start the first year of use for 2019 on the new contract. We will give you one free week in a 2 bedroom unit for use in 2018.

We will refund the amounts placed on the cards and any payments made to the lender since the time of your upgrade.

They never apologized for opening the second card or charging the credit cards without our knowledge. We had some good times at Summerwinds, but because of this experience, we have lost all faith in Summerwinds. We dread checking in.

Discussion Question 7

Should Summerwinds have apologized for the mistakes? Lawyers will be quick to respond….but not so fast. Hug your Haters author Jay Baer, obtained this answer from attorney and litigator Michael Laskey of Davis and Gilbert law firm in New York City.    

“In some corners of the business universe, anyone interacting with customers is prohibited from saying (or typing) an apology, because it is believed – by particularly Draconian attorneys – that it could weaken the company’s position in a legal proceeding.” “In the world of Charles Dickens, ‘If that’s the law, then the law is an ass,’”

Mr. Laskey emphasized that of course companies should be careful about what they say, but the answer is not to ever say “I’m sorry.” p 125

http://insidetimeshare.com/?s=hug+your+haters

So there you have it. Mr. Yelton has produced lots of food for thought. This is the YouTube Mr. and Mrs. Yelton produced. https://youtu.be/a1XCF479oa8

We hope you will express your thoughts on our comment section.

Summerwinds Resorts Services, LLC has a BBB rating of F

https://www.bbb.org/stlouis/business-reviews/timeshare-companies/summerwinds-resort-services-llc-in-branson-mo-29040/reviews-and-complaints

Inside Timeshare has received complaints from all branches of the military as well as law enforcement. We have reached out to Whistleblowers of America, a nonprofit that seeks justice for veterans, Active Duty military and government workers. We encourage those who have been assisted by our efforts to make a donation to this worthy organization. https://whistleblowersofamerica.org/

I have never served my country, but I am honored to serve those who have by providing the means to let their voices be heard. Thank you to Mike for joining Inside Timeshare as a contributor and for your service to our country.

Additional self-help groups that can aid in your due diligence:

We seek to provide timeshare 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://tug2.com/Home.aspx

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

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

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

In Europe we have not yet seen this use of credit cards, but we are familiar with finance being arranged by the sales staff, the main provider of theses loan agreements is Barclays Partner Finance. We have many readers who have informed us that they told the sales staff they could not afford the timeshare as they were only on pensions.

Yet after many hours of high pressure sales tactics they eventually agreed to finance being provided, the unfortunate thing is the usual due diligence checks such as income versus outgoings reports have never been done. Eventually this has ended in severe financial hardship.

It has also been the case that many of these loans have been brokered by unauthorised and unlicensed staff and companies. Yet the banking industry still allows these agreements to take place, putting yet more people in financial crisis.

If you have any comments or questions on this or any article published, Inside Timeshare would love to hear from you.

 

The Tuesday Slot with Irene Parker

The Consumer Financial Protection Bureau after Richard Cordray

Timeshare Developers and ARDA vs the Timeshare Consumer

donkey

ALEC – What’s a Corporate Bill Mill?

Part I – The Manhattan Club

Part II – Marriott and Florida legislation Tuesday, November 28

By Irene Parker

November 21

Is the Consumer Financial Protection Bureau an agency that overreached or a necessary protection for consumers?

The Consumer Financial Protection Bureau’s Director Richard Cordray recently announced his resignation. Timeshare members not familiar with the CFPB may remember 3.4 million Wells Fargo customers receiving restitution from unauthorized credit card accounts being opened that allowed Wells Fargo representatives to meet incentive targets. CFPB conducted that investigation.

https://www.politico.com/story/2017/11/15/richard-cordray-resigns-consumer-financial-protection-bureau-24493/

Timeshare today seems as polarized as Democrats vs the GOP. Given the corporate driven political climate in Washington DC, it is unlikely Cordray’s replacement will bolster the agency’s power or recourse for timeshare consumers.

Timeshare members have not benefitted from the CFPB like the Wells Fargo victims. The opening of an unauthorized credit card is annoying, but probably not financially devastating. The majority of our 209 Inside Timeshare readers, reaching out to us for advice, are often financially devastated by their decision to purchase a timeshare or continuing to own one. The perpetual contract, accompanied by rising maintenance fees and little or no secondary market can spell disaster, especially if sold by deceit.

Still, timeshare members appreciate the CFPB’s interest in hearing timeshare complaints. The CFPB did initiate a Westgate timeshare investigation that lasted two years, only to be dropped after the 2016 presidential election. Call me suspicious, but seeing Westgate owner David Siegel pictured left of Mr. Trump on the stump during the campaign, while the Trump organization simultaneously launched a timeshare in Scotland, seems beyond coincidental.

Trump1

Former Florida Attorney General Bill McCollum’s name was mentioned in the Politico article linked above as a possible Cordray replacement. Given Florida’s current legislative and timeshare enforcement climate, timeshare members have little to cheer should a former or current Florida elected official be named director. In our opinion, Ms. Bondi has done little to address deceit on the front end of the timeshare sale. As Inside Timeshare previously reported, the Florida Timeshare Division only acted on 110 out of 2,360 timeshare complaints received from April 2014 to April 2016.

In contrast, New York Attorney General Eric Schneiderman achieved a $6.5 million settlement for The Manhattan Club members, Arizona Attorney General Mark Brnovich $800,000 for Diamond Resort members, Attorney General Herbert H. Slatery III $3 million for Festiva members, and other smaller settlements by Colorado, Wisconsin and Missouri Attorneys General.

Despite AG settlements that seem mere financial speed bumps in the life of a timeshare corporation, timeshare members are hopeful our grassroots efforts to educate lawmakers will someday bear fruit.

The Manhattan Club investigation was one member vs developer battle over lack of availability and other concerns that led to the $6.5 million settlement. TMC owners were banned from the timeshare industry as part of the agreement. While the settlement was hailed as a significant accomplishment, Douglas Wasser, an attorney involved with the investigation is not so sure:

The $6.5 million was set aside for the benefit of “hundreds of purchasers” as a restitution fund.  But The Manhattan Club has upwards of 14,700 unit owners.  So, the pool of Manhattan Club owners entitled to a purchase refund may be a very small one.

The forced divestiture by the current sponsor of control over the Manhattan Club could be a lift for the entire community. Given the lack of confidence in the current reservation system and the many complaints that the reservation system was heavily tilted to benefit the sponsor, this seems like a significant positive to the Manhattan Club community.  It may restore confidence, perhaps drive up market value of the units and allow those who want to leave to do so, and bring in new and willing participants.   

Will it be uplifting for all timeshare members?

Inside Timeshare and other advocates expect little improvement given the polarity that exists between member advocacy groups and ARDA, the American Resort Development Association. I have personally forwarded close to 100 complaints to ARDA, prepared by members alleging timeshare sales agents violated ARDA’s Code of Ethics, which have been ignored.

The two resorts which seem to have the highest volume of complaints each give ARDA ROC, the supposed owner’s arm of ARDA, $1million dollars a year through “voluntary” opt out donations. It took until November to have my $7 removed. When I contacted my resort to have the donation removed, it was instead moved to another account and reported as a delinquency on that account. When members ask what ARDA ROC is, members are told it is a nonprofit that helps members. However, ARDA seemed to be on the side of TMC developers.

mclub

The picture above shows two ARDA attorneys observing a TMC meeting and taking notes. The notes may have later turned into an amicus brief written by a high ranking executive member and attorney for ARDA attempting to defend TMC.  In the brief, Robb Webb described the company’s practices as “routine industry transactions” and, according to one source, drafted some TMC original documents.

Our readers would agree false promises and shady sales tactics are often routine industry practices or transactions, but members are alarmed ARDA defended such practices. In the settlement, the Manhattan Club defendants acknowledged that they misled buyers about availability and the ability to sell back the timeshare.

“The owners of the Manhattan Club lured thousands of timeshare buyers with false promises and shady sales tactics that violated New York law,” Schneiderman said.

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

What’s a corporate bill mill and does such an entity play a role in timeshare?

On Friday in Part II we will examine how politics played a role in the Marriott racketeering case, as lawyers involved with the case suspect. It’s been reported backdoor politics contributed to a bill signed by Florida Governor Rick Scott that, in effect, rendered the Marriott case non-meritorious.

Unsure of the allegations, I researched lobby efforts and their influence on legislation and the possibility of timeshare participating in an ALEC type endeavor. Georgia Senator Nan Orrock described ALEC as “a corporate bill mill.” ALEC stands for American Legislative Exchange Council.

According to Senator Orrock, ALEC is an organization that gets money from lobbyists and gives the money to legislatures and it is considered charity. Three lawmakers, mentioned in this video, received $22,000 in “scholarships” from ALEC, considered an educational charity. The YouTube is disturbing.

https://www.youtube.com/watch?v=sNA0-GBuunc

The timeshare PAC ARDA also has a charitable educational organization called AIF ARDA International Fund. I don’t know enough about AIF to parallel it to ARDA, but the legislative action in the Marriott case seems similar.

http://www.arda.org/foundation/

Open Secrets list ARDA’s contributions to political candidates:  

https://www.opensecrets.org/pacs/lookup2.php?strID=C00358663

So where do we go from here and why can’t we all just get along? Has greed so permeated timeshare and American politics that a working relationship between timeshare members and developers or between the rich and the not rich, is as unlikely as Bernie Sanders and President Trump coming to terms over health care?

a

Fortunately, the court of public opinion is still open as long as the first amendment stands while timeshare members keep coming forward filing regulatory complaints and reaching out to the media if they feel they have been harmed. Someday, somewhere, someone will listen. Until then, we build our case brick by brick.

If you or someone you know needs help with a timeshare, contact Inside Timeshare or a self-help advocacy Facebook.

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, as usual you explain things in a way that is easily understood, we look forward to Part II next week.

The Friday Letter from America

Back in January, Inside Timeshare published Irene Parker’s article Attorneys General and Timeshare under Trump, This was at the time of the now President Trump’s inauguration. In the introduction, we broke the news to our US readers of the plans  Mr Trump had going through planning in Scotland, for a second golf course and the increase in the number of timeshare apartments.

This apparently came as a big surprise to our American readers, it would seem they had no idea that he was also involved in “timeshare”.

Below are three links to two major UK daily newspapers, the last link is around 9 months old, but shows the opposition that Mr, now President Trump faced from local people. In this particular article is the story of a quarryman who refused to sell his home to Trump, who described him as a “disgrace” for not wanting to sell him his “pigsty of a home”. I don’t know about you, but in the UK and especially in Scotland that type of remark about someone’s home is a total insult.

http://www.independent.co.uk/news/world/americas/donald-trump-organization-golf-links-resort-scotland-aberdeen-conflict-interest-a7534596.html

https://www.theguardian.com/uk-news/2016/dec/22/planners-reject-donald-trump-revised-plans-scottish-golf-resort#img-1

https://www.theguardian.com/us-news/2016/jun/23/donald-trump-faces-wall-of-opposition-as-he-returns-to-scotland

Now to Irene’s article.

What is ARDA-ROC Doing Today? An Analysis

By Irene Parker – March 24, 2017

torch

After reading the March article “What is ARDA-ROC doing today?”

http://resorttrades.com/what-is-arda-roc-doing-today/

It seems a good time to revisit my $7 “voluntary” donation to ARDA-ROC. The word voluntary has a nice ring to it so for years when paying our maintenance fees, if I was asked if I would like to make the voluntary donation to ARDA-ROC, I said, “Sure.” Since then I have learned too much to ever answer in the affirmative again, unless proven wrong.

According to Lisa Ann Schreier, the ARDA board only lists one timeshare owner. Of the 23 board members, included are Frank Goeckel, Diamond Resorts, recently departed with a $2 million handshake and Franz Hanning, departed after the Trish Williams $20 million Wyndham Whistleblower verdict with a $3.4 million handshake.

http://www.ardaroc.org/roc/about/default.aspx?id=1354

Of the $816,068 ARDA made in political contributions, 74% went to Republicans and 26% to democrats. This breakdown was also provided by Lisa Ann Schreier:

https://www.opensecrets.org/pacs/lookup2.php?strID=C00358663

Like it or not, timeshare is all about politics. President Trump, or his family, is going into the timeshare business. Pictured to the left of President Elect Trump is long-standing friend David Siegel, owner of Westgate timeshare. Given the current political climate it would not surprise me if the Consumer Financial Protection Bureau halted their investigation of Westgate. The CFPB was spearheaded by Senators Elizabeth Warren and Bernie Sanders. That’s the organization that helped the Wells Fargo victims.

trump
David Siegel seated to the left of Donald Trump

As Charles Thomas of Inside Timeshare previously reported,

“Well it is actually quite simple for those in Scotland, back in 2008 there were some very heated debates over Mr Trump’s plan to build an 18 hole golf course and resort in Balmedie Aberdeenshire. This met with considerable resistance from the local people, but eventually Trump won through.

The original plan was to build a 450-room hotel, a second golf course, 500 luxury homes and 900 timeshare apartments along with a second 18 hole golf course. In a recent article in The Guardian newspaper these plans now intend to double the number of homes and timeshare apartments”

Whether you are or were for or against now President Trump, it is clear he is on the side of the timeshare developer which has become a battlefield pitting owners against developers.

Now to our main attraction:

What is ARD-ROC doing today?

A breakdown for soundbite reading and request for more information:

In a perfect world the only thing ARDA-ROC would be doing today would be writing checks, sitting back and relaxing. But, it’s not a perfect world and so a typical day for Chairman Ken McKelvey goes something like this:

ken McKelvey
Ken McKelvey

It is a Thursday and McKelvey started his day discussing a new wrinkle in the South Carolina transfer legislation that ARDA-ROC has been proposing.

I believe this is South Carolina House Bill 3647 tightening the language of timeshare transfers. In our last article we reported how the nature of the perpetual contract, rising maintenance fees and little or no secondary market spells a disaster for aging original owners if denied a voluntary surrender.

That was followed by a conference call regarding the proposed United States Virgin Islands timeshare fee.

This does sound like a benefit for owners because an extra $300 slapped onto an exchange seems exorbitant.

The day before was loaded with details regarding a Saint Maarten Parliament Timeshare Ordinance and its potential impact on consumers.I know nothing about the Saint Maarteen Parliament Timeshare Ordinance but it sounds ominous.

Along with a final draft of legislature in Florida regarding the sunset clause to help legacy properties gain reasonable voting requirements to extend into the timeshare agreements into the future. Whew.

This is Florida House Bill 818 concerning a reset to continue beyond the sunset provision.

And he’s just a volunteer who is happy it is not Monday.

The ongoing operations of ARDA-ROC is both reactive and proactive; on one hand they react to any proposed legislature, dealing with real estate or tourism proposed laws that have any tentacles that could possibly affect timeshare and on the other hand they write and lobby for legislature that could help timeshare owners.

This lobby effort sparked outrage among owner advocates. Did my $7 go to this effort?

“The bills (House Bill 453 and Senate Bill 932) have been sponsored by two politicians from Central Florida — deep in the heart of time-share country: Rep. Eric Eisnaugle, R-Orlando, and Sen. Kelli Stargel, R-Lakeland.

Both politicians have received money from time-share interests — an industry that showers cash on Florida politicians and committees, including $300,000 to the Republican Party of Florida and $150,000 to the Democrats,” reported Scott Maxwell for the Orlando Sentinel.

http://www.orlandosentinel.com/opinion/os-florida-timeshare-tactics-scott-maxwell-20150411-column.html

Throughout the year, ARDA-ROC has lobbyists on retainer in up to 25 states, and territories, and who according to McKelvey “we HOPE the only thing we ever hear from them is an invoice.”

These lobbyists monitor and pick through every piece of proposed legislature with a fine tooth comb, seeking things that are rarely specifically spelled out to say timeshare, but could be interpreted to have grand impact on it.

This from Advocate Michael Kosor:

The “fine tune comb” can be seen in the Nevada State Bill 195 that would have allowed an Association Board to terminate its management contract (the most important and costly agreement a board oversees), issued to them by the developer, without obtaining a majority owner vote – an impossible effort. ARDA-ROC identified the change and successfully lobbied to have it removed.  This was clearly an owner friendly provision the industry did not support.  Lobbyists (of ARDA and ARDA ROC, they use the terms loosely and interchangeably) suggested (vaguely and without discussion despite being an absurd assertion) the original language was “intended to protect timeshare owners” and should not be changed.

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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.

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