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May 2018

Friday’ Letter from America

Welcome to this weeks Letter from America submitted by our very own Irene Parker, but first some news from the Gran Canaria.

Canarian Legal Alliance has had what can only be called a very successful and dramatic week in the courts. At the Supreme Court in Madrid the judges once again ruled in two cases against the Tenerife timeshare operator Silverpoint. This now brings the total number of rulings by Spain’s Highest Court against the timeshare industry as a whole to a massive

There was also a High Court ruling in Tenerife against Silverpoint, plus two Courts of First Instance rulings in Gran Canaria against Anfi Del Mar. In all, clients will be receiving over 148,000€ plus legal interest.

In four cases at the Courts of First Instance, numbers 2, 4 and 5, with Anfi Resorts once again the defendants, all judges came to the same decision as per the rulings of the Supreme Court. The basis of the sentences varied from the lack of a tangible object found in the contract, floating weeks, along with the contracts being over 50 years in duration.

In all the courts have awarded these clients over 138,000€ plus legal interest, also in all seven cases the contracts have been declared null and void.

So seven very happy clients and no doubt celebrations at the offices of the lawyers.

Now for our Letter from America.

How I Made my Worst Enemy so Much Money in the Stock Market in Six Days he probably didn’t have to Work Anymore!

The Flip Side – Consumers Drowning in Debt

By Irene Parker

May 25, 2018

After a pathetically aggressive and deceptive timeshare presentation my husband and I attended in 2015, I started researching timeshare. We had owned three timeshares having bought our first two timeshares around 1984. I didn’t know how to use Facebook and knew little about Social Media. I started posting comments on places like Tripadvisor. One site responded to my post asking me to fill out a form describing my work and educational background. That seemed odd, but I responded that I had retired from Edward Jones Hawaii and had an MBA and a CFP. A few days later I received a call from one of the TheStreet editors. I almost fell over when he said TheStreet was Jim Cramer of CNBC Mad Money’s investment news service!   

My first TheStreet article was an “editor’s pick” about how I made my worst enemy so much money in six days he probably did not need to work again. Another article was about creating wealth. Given most of the 431 timeshare members who have reached out to Inside Timeshare are struggling with oppressive timeshare loan payments, credit card payments and maintenance fees, I republish my advice to graduates on how to avoid excessive debt. I published about twelve articles for TheStreet before finding my writing and advocacy home at Inside Timeshare. The education I received while working with four TheStreet editors, all possessing the patience of Job, felt like I had earned a degree in journalism.

I hope a developer or two will take the time to read about how two adversaries can come together for the good old fashioned goal of making tons of money. Shooting yourself in the foot by allowing deception to become the norm is unfair to the consumer and has devastated many families. Let’s together turn this ship around and drain the swamp of predatory and criminal sales agents. At least that is what they are if allegations hold true, according to several FBI agents I have talked to over the last year.

Doctor Khalil in my article and I had a grudging respect for each other that we weren’t even aware of. It is my hope the angry timeshare member and developer can come to a similar understanding for the good of the industry. The timeshare developer needs to wake up to the futility of allowing and encouraging sale by deception via overreliance on the oral representation clause, making the consumer sign a perpetual contract, often at a high loan interest rate, often with no secondary market. It can’t continue as it has. Social Media is here to stay.

My investment hero is Peter Lynch, former manager of Fidelity’s Magellan fund. As mentioned in my article, while sitting around waiting for my Series 7 score, I read Warren Buffett’s biography and Mr. Lynch’s book, One Up on Wall Street. Their sage advice guided my career. It was a great compliment when ValueWalk reposted my article referencing One Up on Wall Street. I may take a flyer once in a while, but I will always be a value investor at heart.  https://www.valuewalk.com/

May 22, 2016

 https://www.thestreet.com/story/13576145/1/the-markets-crashed-my-first-day-as-a-stockbroker-and-here-s-what-i-did-next.html

The consumer is not off the hook. My mother would admonish anyone who financed a luxury item like a timeshare at 12% to 18% for ten years, often relying on a 20% or higher interest rate timeshare credit card. That doesn’t make any sense, according to my mom.     

Predatory Credit Card Lending – Graduates Beware!

Heed the Cardinal Rule of Investing

How the Time Value of Money can grow $50 a month to $1 Million  

Originally published by TheStreet June 11, 2016

What does this have to do with timeshare?

Don’t finance a luxury item at 12% to 18% as this has been driving some families into foreclosure and sometimes bankruptcy. I don’t think there is a financial planner in the land who would think this is a good idea.

Timeshare members have been contacting Inside Timeshare describing how they have ended up in a financial timeshare wasteland. Tomorrow is my 67th birthday, which has caused me to reflect on my mother, who would have reacted violently, had she learned I financed a vacation at 12% to 18% for ten years.

The importance of prudent borrowing and paying yourself first

First off, buy no vacation plan unless you are maxing out your 401K, 403B, IRA or company retirement saving plan. It’s always best to check with your accountant to determine whether a 401K or IRA is the best choice. The Roth IRA is of great benefit to younger people. But this is not an article about retirement vehicles – it’s about encouraging graduates to start early.

To become better informed, read Jim Cramer’s book, Get Rich Carefully, and then simply check yes to something, preferably 15% payroll deduction.

Here is my TheStreet article about my mom’s extraordinary forced savings plan and about how $50 a week starting early can end up over a million $. Please pass this lesson on to your upcoming graduate.

   

https://www.thestreet.com/story/13603800/1/recent-college-graduates-heed-this-cardinal-rule-of-investing-now.html

My mom drilled into me the time value of money principle every Friday night from the third grade until my high school graduation. This principle is so simple you would think it would not even need to be mentioned. Unfortunately, as an Edward Jones broker, only about one in twenty of my 1,200 client families working towards financial independence, got it. Many did not max out their 401K, 403B or self-employed retirement account.

My mother’s retirement savings method was extraordinary. Her finance education was nothing more than a bookkeeping class she took in high school; but she was a walking MBA. My father flunked 7th grade three times due to something about the school basketball team. He started and failed in six businesses, narrowly escaping a second bankruptcy. I was born into a dry cleaners, his seventh attempt at business.

The first thing my mother did was to hire an accountant. She had had it with financial mismanagement. The accountant, John Schmuck of Ferguson, Missouri, warned my mother, “Whatever you do – keep Johnny out of the books!”

On my ninth birthday, I was informed I was to start helping with the Friday payroll. Mom told me about her “background fund”. Every Friday night she would point to the checkbook balance and a number she recorded in a secret location. She would say each week, “This is our background money – and you are not to tell your father about it unless I die.” It was a lot to absorb at age nine. You see, if the dry cleaners took in $200 in a day, but had $100 in bills to pay, Mom would only record the balance as $100 so my dad would think they were broke. My Mom kept up this charade for 27 years! At age 65, my parents stopped by a Cadillac dealer. Mom pointed to a powder blue Cadillac and asked Dad, “Do you like this one Johnny?” He nodded. Mom looked at the salesman and said, “We’ll take this one.”  She wrote a check, turned to my dad and told him he could retire.

One of my brokerage clients was a cartoonist. She took this story and made it into a cartoon booklet. I handed out 2,000 copies to help build my brokerage business on the Big Island of Hawaii, currently erupting. I had just opened my brokerage office in Honoka’a. The local police officer went up and down the street warning residents not to invest money with this haole lady (haole means in Hawaiian “one who has no life” because the Hawaiians thought the white sailors were ghosts) as I would in all likelihood take their money and abscond back to the mainland. At the time, the local insurance agents were selling whole life insurance policies as an investment.

Undeterred, learning the sugar plantation had closed, and workers could not get their pension benefits, but could get Social Security disability benefits, I lobbied the ILWU. It took about a year, but they amended the plan, workers received their benefits. I began receiving calls like, “You’re the only haole we trust!”  My business flourished as $50 million in assets flowed in.

But – back to the cardinal rule of investing. The most important principle my mother taught me was – PAY YOURSELF FIRST!  As I typed payroll checks, she would point to the list of employees and sadly say, “You see these people! They live from paycheck to paycheck! Think of yourself as a light bill or a telephone bill. You would not miss paying those bills. Don’t wait until you pay your bills to see if anything is left over to save!” Pay yourself first!

If you heed my mother’s advice here is what can happen based on historical stock market performance:

Age 25 – first job at $40,000 per year – 15% of pretax earnings = $6,000

$6,000 in annual 401K contributions

(The Wow of throwing an estimated $5,000 to $6,000 a year in payroll taxes – to the IRS – and what that could have grown to if invested in a 401K convinced a lot of people to get with the program) To continue:

N = number of years (35) to work to age 60

8% – Average estimated growth rate or total return with dividends and capital gains reinvested

The estimated future value at age 60: $1,116,612.

Liquidating or receiving in dividends and capital gains 5% of portfolio income each year in retirement: $55,830 estimated annual investment income.

Most people can comfortably retire on 70% of current income (you should be earning more at age 60 than the $40,000 a year you started out with at age 25).

Sadly, it was not unusual for someone age 45 to come to my office and tell me they needed to start saving for retirement with nothing yet saved. This scenario:

Age 45 earning $40,000 = $6000 saved annually

N = 15 years until age 60 and average estimated growth rate – 8%

Future value estimate at age 65: $175,945.

5% of the $175,945 would generate an estimated $8,797 a year in income

The examples illustrate the power of the time value of money. I went through this exercise with all new clients and watched their eyes widen as my now ancient 12C HP Calculator blinked out the good or bad news. I recently showed my estate planning law firm how it works. Despite being a highly skilled law firm, my little calculator caused shock and awe. Teachers were the best savers; maybe because of the steady paycheck and their expertise in education.

Make sure to pencil in ten minutes every birthday to keep your annual scorecard by updating the numbers. There are an abundance of retirement estimators on the internet. My husband and I had kids to send to college, pitfalls and financial disasters, but overall, we kept the 15% rolling.

Thanks to our pharmaceutical bioavailability laboratory, my jumping ship to learn the ropes of Wall Street, and prudent investing, my husband and I retired at age 55. We don’t live in a palatial home or drive an expensive car, but we enjoy our comfortable lifestyle.

And you know what else? Not one of my clients ever told me they were sorry I made them save all that money.

Thank you Irene, a change from our normal theme, Next week in the Tuesday Slot we publish a story from Haley Saldana, another new contributor and her story of woe.

If you need any help or advice about any company that has contacted you or you have found on the internet, whether is be about claiming or just getting out of your timeshare, use our contact page and we will give the correct information.

So that’s it for this week, it’s Friday and the weekend is now upon us, have fun and join us next week with more news from the world of timeshare.

Mid Week Report

Silverpoint Ordered to Payout Immediately.

One Belgian client of Canarian Legal Alliance has now been paid over 100,000€ by the Court of First Instance, Arona, Tenerife. In this case the court ordered to Silverpoint to pay immediately and also declared the contract null and void.

The Barrister for CLA has received the payment and this is now being transferred to the clients personal account. This is not the full amount as the court are still calculating other sums due the client.

It is obvious from this, the courts are taking a dim view at Silverpoints continual delaying tactics, which has resulted in delays and considerable court time in chasing up. There is also a system of embargoes which the court can enforce, this will freeze assets and bank accounts, allowing the court to withdraw the funds at their will.

Canarian Legal Alliance have also set into place a system where they now have lawyers whose task is to file these embargoes with the court and enforce the settlement in favour of their clients.

Silverpoint have a history of delaying and this is a clear warning from the courts that they will no longer tolerate this behaviour. It is a good sign for the many client that have cases against this company, speeding up the return of their money.

https://www.canarianlegalalliance.com/silverpoint-forced-courts-pay-100000e/

Another warning is being issued about a fake law firm called Abogados Lopez, operating out of Malaga and Las Palmas, Gran Canaria. They use the telephone numbers:

0034 951242867

0034602654670 (mobile)

The scam is very simple and they are very adept at making consumers believe them.

The call comes from a woman (possibly Dutch) called Hope Brugge, in her call she seems to know many details, that the case is going to be heard in court the following day. The next call is to say that the court has found in the client’s favour and awarded Ex amount.

To have this money released the client needs to send an amount via bank transfer to an account in the name of an individual, they are using numerous accounts and names.

This is also backed up by fake but official looking paperwork, do not be taken in by them, if you do have a case with a law firm, contact them for verification before engaging with Hope Brugge and paying any money.

This is a very well laid out fraud.

If you have any questions or comments about this or any article published, then use our contact page and we will get back to you.

Been contacted by a company, found one on the internet and not sure if they are genuine, then ask Inside Timeshare, we will point you in the right direction.

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.