Consumer Protection in Europe is governed by the EU Commission, each country within the EU also has their own consumer protection laws in their own legislation. Much of this comes from directives laid down by the EU Commission, the same way as the EU Directives on Timeshare.
In the UK, the Trading Standards Institute has an annual National Consumer Week, this has been running since 1989. It is a consumer education campaign run by the Consumer Protection Partnership (CPP) and is usually at the end of November to the beginning of December.
Each year it focuses on different themes from buying a car to the quality of goods and customer care. The main focus is to educate the public on their rights, how to deal with complaints and who to turn to for help.
There are also many other avenues where consumers can receive help and advice, one of the most notable is “Which”, they have for many years published a magazine giving advice on various goods and highlighting major recalls. They produce many other publications free of charge including very simple guides on using computers, lap tops etc.
The Citizens Advice Bureau is also another well known place for help and guidance. Most towns have one and they will cover many areas of concern from benefits, problems with employers to financial problems. They tend to be run mainly by volunteers, but have experts such as lawyers and financial advisors on call.
In the field of timeshare there is a great lack of real advice, it is unfortunate that the 2 main organisations that give consumer advice will send consumers to TATOC. As we have highlighted in the past, this organisation is funded by the industry and is virtually run by them. Take a complaint about your resort, you will be told to contact them, as they will not intervene. Not a very good way of giving advice, sending a complaint to the ones that are the cause of the complaint.
In the Article by Irene Parker today, she highlights servicemen who have fallen foul of the high pressure selling tactics. In the UK several years ago there was a company that was preying on servicemen and their families, they set up a vacation club or what we know as a discount members club. It cost upwards of £6000 to join, with many servicemen taking up the offer.
As with many of these clubs the servicemen did not get what they paid for, with the so-called discounts being far more expensive than what was available on the highstreet. Many complaints went to the MOD, and this company has not been heard from since. Luckily many of those who paid did so on their credit cards and were able to retrieve the payment from the card provider using the Credit Consumer Act.
It is a very sorry state, when servicemen who put their lives on the line in defence of their country are treated in such a way. The most annoying aspect of the above example was many of the sales reps were themselves ex-servicemen, using this as a tool to gain trust.
Inside Timeshare hopes the following article will be of help to those caught foul some of these unscrupulous tactics.
Consumer Protection Week March 5 -11
Who needs protecting? The elderly, the ill, the divorced, the unemployed, the Army and the Navy
By Irene Parker – March 6, 2017
Consumer Protection Week in the US is sponsored by the Federal Trade Commission (FTC). More than 100 federal, state and local agencies, consumer groups and national advocacy organizations will participate in the 19th Annual National Consumer Protection Week (NCPW), held March 5-11, 2017. NCPW is a nationally coordinated campaign to inform Americans of their consumer rights while providing them access to free consumer-related resources.
Do Timeshare consumers need protecting? One need only review the 15 page Department of Justice report on Timeshare scams to answer with an unequivocal “Yes!”
What questions should people ask before buying a Timeshare? Should you make a $20,000 or more decision the same day without comparison shopping? Should you believe a word a sales agent says? Should you finance your vacation plan?
Timeshare Tip – Take your eye off the finger pointing to the low monthly payment, raise your head and ask, “At what Interest Rate?”
It’s surprising how many we talk to who did not know the interest rate they were paying until they started paying. I was two hours into our sales presentation, mesmerized by the numbers, before I thought to ask.
Today we use the example of a family who failed to ask these questions and are now devastated by a vacation plan that has turned into a nightmare. I use Diamond Resorts as an example, but they should not be singled out. I am a Diamond member so in contact with other members. Many Timeshare companies have complaints.
We hear a lot about the elderly being targeted, but in one week I heard from four military families. One is a Veteran, one family has a son in the military, and two are on active duty. We’re hearing a lot in the US press these days about how Veterans have not been treated fairly so a story about a Navy family is timely.
As the family has been referred to Diamond Resorts Consumer Advocacy Department, and an outcome is yet to be determined, we will call this couple William and Mary. This newly formed Diamond Advocacy Department has reached out to many of our Facebook members helping owners resolve issues and better learn how to use DRI vacation Points.
William and Mary feel they have been victims of fraud or “bait and switch”. They are requesting a full refund. Let’s weigh in on whether this case meets this simple definition of fraud: Wrongful or criminal deception intended to result in financial or personal gain.
William, age 47 is on active duty with the Navy, stationed at Norfolk, Virginia. An able bodied seaman, William is waiting on orders to be shipped overseas. Mary, age 43, works for the Department of Agriculture. They have two children ages thirteen and eight.The summer of 2015 William and Mary booked a week at a Diamond Resort in Virginia by renting through RedWeek. They accepted an offer to attend a sales presentation. Mary does not remember the name of the sales agent (Vacation Counselor) in Virginia, but remembers he was a former Secret Service agent. The family purchased 15000 vacation Points for $63,232 or $4.22 per point. The current balance, financed at 14%, is approximately $43,395.
“Our original 50 minute presentation ended up to be 5 hours. We were told by the Virginia supervisor, a lady with a British accent, that we would have no problem getting a lower interest rate financed outside of Diamond since William was in the service. All we would have to do is supply the lender with “duty orders” and it would go down to 1.5% as long as he was overseas,” Mary reported. The family later learned banks will not finance Timeshares, so that option was not available.
Anxious to try out their new vacation plan, the family booked a trip to stay at a Diamond Resort in Orlando. Now an existing owner, they were encouraged to attend an “owner’s update” which is always accompanied by an offer to buy more Points. The promised 55 minute update lasted three hours.
Orlando Sales Agent Joaquin told the family that since they now lived in Florida, they would be required to transfer the Points they purchased in Virginia to Florida.
The agent might have been alluding to a “Collection” as Diamond has a US, Hawaii, California and a few other Collections. There is no Florida Collection, but the family paid $4,898 as a down payment to transfer and buy more Points.
“Joaquin promised to help resell our Points if we needed to. When we realized we could not afford the loan, I made a few calls and emailed Joaquin for assistance, but I was just ignored altogether,” reported Mary.
William was transferred to California. A Diamond Sampler package is ordinarily sold as a trial package, but on another trip to Orlando, the couple purchased a Sampler from Joaquin hoping William could stay at Diamond Resorts in California while stationed there. A loan of $1,100 financed by Diamond at 12.99% was obtained, but ultimately the three purchases were consolidated into one loan.
In William and Mary’s own words, here is why they feel they were misled:
“During the sales pitch we were told information that we discovered later was not true.”
- We were told the Timeshare is tax deductible and that we could later sell for a profit.
- We were told we could rent the Timeshare for additional income or help offset the Maintenance fees.
- We were told we would be able to refinance at a lower interest rate with any financial institution.
- We were told the sales agent would act on our behalf as a personal representative and help rent out our Timeshare.
- We were told that this Timeshare was an INVESTMENT!
By now, the family realized they had made a mistake and were deep in debt. December of 2016, while living in Jacksonville, FL the family was called and invited to a dinner of owners to discuss their account and give insight to how better to use Points. (Note: Buyers of Points don’t “own” anything as it is a right-to-use program similar to a country club)
William and Mary informed the Diamond caller they wanted to opt-out and were told a representative would be there to help start the process. However, when they went to the dinner, it turned out to be another high pressure sales tactic to get them to buy more Points with Apollo.
(Note: Apollo Global Management acquired Diamond in an all cash $2.2 billion deal September of 2016, as reported by Gretchen Morgenson of the New York Times prior to the acquisition.)
As of July 13, Diamond’s top executives and directors beneficially owned almost 23 million shares in the form of options and company stock. If the transaction is completed, a filing stated, those 15 people “would be entitled to receive an aggregate amount of $624,131,129 in cash. The bulk of that will go to Stephen J. Cloobeck, Diamond’s founder, and Mr. Palmer, the chief executive. Mr. Cloobeck would be entitled to $384 million and Mr. Palmer would receive $173 million.
Back to William and Mary:
William and Mary told their hosts that they had a life change and could no longer afford their Maintenance fees or loan payments and wanted to relinquish their ownership (membership) per the buy- back program that they said they had. At the meeting the account representative said Diamond did not have this program.
“Jose, the Supervisor, recommended we buy more Points as that would lower our Maintenance fees by taking back the Sampler. We were also financing the Sampler, so he said they could keep my monthly payment the same. After we left the presentation I reached out a few times to our original sales agent only to be told he no longer worked there. After we purchased the Sampler, we got called about 2 or 3 times a month by different account managers. At this point I could not even tell you the person’s name, but that was the last contact,” said Windy.
Where does the family go from here?
“William has had a major loss in pay and we can’t afford the loan payments.”
Part II will provide a flow chart of options the family is facing.
Diamond is fond of boasting about how 70% of sales are sold to existing owners. William and Mary’s story is not unusual. I have reported our own personal Diamond story so many times, I dare not tell it again, but I have also heard from dozens of families telling the same story told over and over – existing Diamond owners told their Maintenance fees and availability issues would be resolved by buying more Points.
Again, Diamond is not alone. Based on my research, I have opinions on which Timeshare companies are the three worst offenders and which are the best, based on a census of online complaints, but that topic is for a future discussion.
Our Arizona Attorney General Assurance of Discontinuance article provides a blueprint for honesty and contains several items from William and Mary’s fraud checklist. Let us know if you think this family meets the definition of fraud.
Diamond has implemented a Clarity program in Arizona in response to the AOD.
“Diamond Clarity is not limited to just one state. It’s a national program that includes four new operational initiatives. One of these initiatives is recording quality assurance sessions subject to consent from purchasers, to review compliance with all policies and procedures, and to augment and enhance the company’s sales and quality assurance training. The company has invested in technology to ensure that these recordings can be archived and searchable. Recording sales presentations would not meet these objectives and thus are not currently part of the Diamond Clarity program,” according to DRI PR spokesperson Maya Pogoda.
Maya and I have had several healthy and interesting discussions about Clarity. I am concerned about the QA recording. In my opinion, I feel it will only strengthen Diamond’s position in court. As you can see from this article, the worn down member or prospect merely nods during the QA session checklist and none of the oral representations would be in that recording. I have learned recording without the other person’s knowledge is legal in Arizona as long as it is not wiretapping by phone.
At least Members are having discussions with Diamond. I think it might be a first and I thank Maya and the staff of Consumer Advocacy for their involvement and support. Inside Timeshare wants to get it right!
Official DRI Response has just been received:
“The options for any timeshare member or owner struggling to keep up with loan payments financed at 12% to 19% and rising maintenance fees are:
Surrender, Resolution, Foreclosure, Refund
A Diamond representative spoke to the family today to gather facts”.
Inside Timeshare will walk with this family along the road to timeshare recovery.
An upcoming article will take a look at the four options, the likelihood of each option, the process of foreclosure and its impact on credit reporting comparing and contrasting European and American processes.
Some resorts have the option of resale. The seller would be fortunate to recover 10% of the initial amount invested, but at least owners with this option are not solely at the mercy of the timeshare company.
Inside Timeshare would like to thank all those who contributed to Irene’s article, without your help we would not be able to highlight the problem or bring about much needed change.
On another note, news just in but not verified 100%, it would appear that Diamond Resorts Europe has now closed all sales decks which were run on a franchise basis. From reports this morning the only sales decks open and trading in Europe are those run and owned by Diamond.
With what has happened in the past few months with Diamond selling off their last concern in Mallorca, the question being posed now is are they getting ready for a major sell off?
When the news comes in we will be reporting it here, so stay tuned.