Browse Month

December 2018

The Tuesday Slot

Welcome to the Tuesday Slot, today in her article Irene Parker continues to address a very serious problem that of timeshare foreclosure, especially for seniors. Inside Timeshare has been highlighting this problem for some time and we will continue to do so.

Timeshare Foreclosure Explained to Lenders

When and Why Some Timeshare Buyers Have No Choice

The Heartbreak of Senior Timeshare Foreclosure

We had to do a reverse mortgage on our home as a result of these timeshare purchases because our social security income was too low to cover the total charged on both Barclay cards. A reverse mortgage was the only way we saw to deal with the financial distress.  My credit score was 817 the day we met with the timeshare sales agent but it has gone down considerably after that purchase.

A former Army Captain, Vietnam

By Irene Parker

December 18, 2018

Over the past year I have received calls from mortgage brokers calling on behalf of former timeshare members trying to buy a house, battling the decline in their credit score due to timeshare foreclosure. When I explain to the lender that consumers are often left with no choice but to foreclose, due to no secondary market and the contract perpetual, the call has always ended with the mortgage broker convinced.

Six grown children, alarmed and astonished at the deceit their parents described at the hands of timeshare sales agents, have connected to bring to light unfair and deceptive timeshare sales practices. Their parents are being driven, or were driven, into timeshare foreclosure. They possessed credit scores over 800 until they were up-sold into insolvency, now trying to understand how our country could leave senior after senior financially devastated. Two of the six families have previously published articles. On Friday we publish an article submitted by a third family, her parents financially and physically devastated because they believed a series of timeshare sales agents. We have received 20 complaints directed against their sales agent. He earned $2.4 million selling timeshare points in 2016 and $2.4 million in 2017. The complaints are similar or identical.

If you buy a house, car, or boat, and there is loan outstanding, you can still sell the asset. Timeshare companies themselves don’t want the timeshare back because, when no longer wanted or needed, a timeshare is a liability. What would happen to the primary housing market if we suddenly learned there was no secondary market? Damages suffered by senior timeshare members, often accumulating points over several purchases, are commonly $100,000 to $300,000 or more, easily the cost of a home. Often the  report of deceit happens at the last one or two purchases, because a level of trust developed over the years until they purchased for reasons that did not exist – programs that would relieve them of maintenance fees or allow them to sell points. Members reaching out to us all report that they were told at purchase the timeshare would be easy to sell, it is real estate, an investment.

When the buyer has experienced unfair and deceptive sales practices, the result exacerbates the financial disaster, as has been reported by many of the 626 families that have reached out to us angry, overwhelmed and desperate. Some have learned within 24 hours after the rescission period, what they bought was a far cry from what was described.   

Such deceptive practices are known within the industry as “pitching heat” and the answer to complaints are routinely dismissed with, “You signed a contract” or “We are not responsible for what our sales agents say.” In Nevada, all complaints we have received that were submitted to the Nevada Real Estate Division quickly received a “You have no proof” denial. In Florida, the response has been, “Verbal representations are hard to prove.”

Fine, but why not let the consumer know a timeshare sales agent can say anything to make a sale. Let the consumer know they can’t believe a word a timeshare sales agent says. That would at least be transparent. Florida is a two party state, so consumers are not even allowed to record. How is proof even possible?

At the end of this article I list several Attorneys General settlements and lawsuits supporting my claim that the finger needs to be pointed also in-house, instead of solely at timeshare exit companies. The timeshare developer created this timeshare exit scam nightmare. Timeshare companies list in their annual reports that a viable resale market is a risk to their (stock) investors. Not all exit companies are scams, but many are. An FTC report on exit and transfer scams:

https://search.justice.gov/search?query=timeshare+scam+report&op=Search&affiliate=justice

I liken million dollar deceptive timeshare producers to a baseball player like Jose Canseco, breaking the performance enhancing drug rules to earn millions, while other teammates earn far less because they did not break the rules. Honest timeshare sales agents are harmed by the actions of the dishonest too.    

According to GustonCho Associates, “Many consumers purchased timeshares in the 2000’s when the real estate market was hot.”

  • After the 2008 Real Estate And Mortgage Meltdown bankruptcies and foreclosures soared to historical highs
  • Among foreclosures were consumers who purchased timeshares and could no longer liquidate the timeshares and had to go through timeshare foreclosures
  • I get many calls by home buyers who were told by banks and mortgage lenders that they do not qualify for a FHA Loan because they have a timeshare foreclosure
  • Timeshare owners were told that there are mandatory waiting period after timeshare foreclosure to qualify for a FHA Loan
  • This is not true and unfortunately, these loan officers who are telling home buyers that there is a waiting period after timeshare foreclosure to qualify for a FHA Loan do not know what they are talking about
  • There is no waiting period to qualify for a FHA Loan with a prior timeshare foreclosure
  • Timeshares are not considered real estate loans
  • Timeshare loans are considered consumer installment loans under HUD FHA Guidelines

Read more https://gustancho.com/fha-loan-with-timeshare-foreclosure

We have also received requests for help from the millennial generation. Seniors often tell me that at their age, they don’t care what happens to their credit score, but for the younger buyer, a timeshare foreclosure at a young age can also be financially devastating.

Not one member who has contacted Inside Timeshare realized their contract was perpetual or that there was little to no secondary market.    

The Foreclosure process is gruesome. There will be threatening calls and the hit on the credit score. Timeshare today is broken. When sales agents can lie and laugh about it, at the expense of the young and the old, financially devastated by their vacation plan, something is very wrong. Too many families have been financially harmed by an industry run amuck. Rising loan loss provisions are just a number on an annual report to Wall Street and the developers. To us, they are broken families.   

Lawmakers, heavily influenced by the industry, don’t seem to care because timeshare buyers don’t typically buy a timeshare in the state they live in. Attorneys General try to protect the public, but the settlements achieved so far have been mere speed bumps in extraordinary revenue streams.  

A few of the Attorneys General investigations and settlement and lawsuits:

New York Attorney General reaches $6.5 million Manhattan Club Settlement

https://nypost.com/2017/08/17/new-york-ag-reaches-6-5m-settlement-with-manhattan-club/

A jury awarded former Wyndham sales agent Trish Williams $20 million

https://www.nytimes.com/2016/11/25/business/my-soul-feels-taller-a-whistle-blowers-20-million-vindication.html

Attorneys General on the side of timeshare owners:

Colorado Attorney General Cynthia H. Coffman, as reported by Business Den reporter Amy DiPierro, concerning Highlands Resorts in Colorado and Sedona Pines in Arizona:

http://insidetimeshare.com/another-us-attorney-general-exposes-deceptive-tactics/

Tennessee Attorney General Herbert Slatery III settled with Festiva timeshare for $3 million:

https://www.tn.gov/attorneygeneral/news/38312

Alongside AGs, the Consumer Financial Protection Bureau conducts an ongoing investigation of Westgate timeshare as reported by Matthew Zeitlin at BuzzFeed:

https://www.buzzfeed.com/matthewzeitlin/financial-regulators-are-looking-into-americas-largest-times?utm_term=.dwoQKVw3QQ#.doJ0ka1K00

Jefferson City, Mo. – Attorney General Chris Koster today announced that Welk Resort Sales, Inc., a California corporation that sells timeshares in Branson, has entered into an agreement to pay $18,000 in restitution to Missouri consumers who purchased timeshares from Welk.

https://themissouritimes.com/21184/release-attorney-general-koster-obtains-restitution-for-consumer-victims-of-timeshare-sales-company/

HARRISBURG – The Attorney General’s Bureau of Consumer Protection has reached a settlement with Florida – based BlueGreen Corporation that addresses complaints about the company’s alleged use of deceptive “contests,” misleading sales presentations and improper contracts in the marketing and sale of timeshare vacation packages in Pennsylvania.

http://www.pacast.com/press_releases/1272_OAG_BlueGreen_feed.pdf

Arizona AG issues an $800,000 fine and an Assurance of Discontinuance against Diamond Resorts

https://www.azag.gov/press-release/attorney-general-brnovich-announces-800000-settlement-diamond-resorts

Bluegreen stock downgrade August 17, 2018

Bank of America Merrill Lynch’s Shaun Kelley downgraded Bluegreen Vacations from Buy to Underperform and decreased the price target from $26 to $19.

https://finance.yahoo.com/news/bluegreen-vacations-interrupted-sell-side-190725946.html

Self-help support groups we feel are not industry influenced:

https://www.facebook.com/timeshareadvocategroup/

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

https://tug2.com/Home.aspx

https://everythingabouttimeshares.com/consider-exchange-options/

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

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

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

Where are you?

Thank you Irene, as usual you have highlighted very well a severe problem and explained it in a very simple manner. In this Friday’s Letter from America, another new contributor Brenda Santos, highlights the “Nightmare on Timeshare Street” of her elderly parents at the hands of an unscrupulous sales agent. We think this will make your blood boil, so join us for our last Letter from America this year.

Start the Week

Welcome to Start the Week and our countdown to the Christmas break, we begin this morning with news from the Spanish Courts.

This morning Inside Timeshare has received the following information regarding our old friends Silverpoint, this company is certainly taking a bashing in the courts, contrary to what some might have you believe.

The other breaking news is there has also been another ruling from the Supreme Court, making 130 in total against the timeshare industry, the company on the receiving end is Diamond Resorts.

On Thursday 13 December in the Court of First Instance No 5, Arona Tenerife, Silverpoint were once again found to be in breach of the Spanish Timeshare Laws 42/98 and 4/12, in respect of their product called “Company Participations”.

As we have reported on many occasions this scheme was designed to bypass the current timeshare legislation, instead of purchasing weeks in an apartment the unwary consumer is sold “participations” in apartments which are “registered” as companies. These companies are administered by Silverpoint and Excel Resorts, with the purchaser believing they are “investing” in a “company”. The terms of the contract are complex, with purchaser having no rights to know who the other participants (share holders) are, they also have no right to use the apartments they have purchased these in these “participations”, but are given weeks they may use in other apartments and resorts.

As with the old Silverpoint scheme of “investment weeks”, purchasers are promised a variety of incentives, these are in the form of “dividends” paid each year for the rental income of the “participations” they have purchased, unfortunately many are still waiting to receive them. They also then have the option after 3 years to “sell” their “participations”, but not on the open market, they can only be “sold” to other participants, but only through Silverpoint who will broker the sale.

In the latest sentence, the judge has clearly stated that these “Company Participations” contracts are a blatant disguise of a timeshare product.

The sentence also states and reiterates the ruling from the Supreme Court (STS16/2012 of 16 January) that these purchasers are indeed Consumers and not investors. (Page 2 of the sentence PDF below)

Silverpoint Sentence 13 Dec

The court declared the contract null and void and ordered Silverpoint to return the full purchase prices plus double the deposit paid, a sum of over 108,000€.

The courts have also place another 3 embargoes on Silverpoint accounts securing over 130,000€ for clients who have been awarded their money back.

The Supreme Court has issued their 130th ruling against the timeshare industry, the very first against Diamond Resorts!

The court has upheld previous rulings that the points system is illegal, along with the perpetuity contract which contravenes the maximum duration of 50 years as demanded by law.

Diamond Supreme Court 11 Dec

Although the amounts awarded are not substantial, this ruling now proves that even Diamond are not immune from being prosecuted under Spanish Law.

Both of these cases have been brought on behalf of clients by Canarian Legal Alliance, the leaders in the field of timeshare litigation.

In other news, it has been announced that the CEO of the American Resorts Development Association (ARDA), Howard Nusbaum is to retire in 2019. The board of directors has appointed a committee to search for a new CEO, the members will be working alongside a leading executive search company Spencer Stuart, who will be managing the process.

Whoever is appointed will certainly have a lot on their plate, the timeshare industry is in dire need of a thorough shake up, so let us hope that the new CEO will have the guts to make sure their members start to treat consumers in a better way than we are seeing at the moment.

So that’s it for today, if you require any information on any of the articles published, companies that have contacted you or would like to know where you stand in regards to your purchaes of any timeshare product, especially the “company participations” from Silverpoint, then use our contact page and we will get back to you.

Friday’s Letter from America

Welcome to another Letter from America, the original article which was going to be published today has been replaced, this is due to the timeshare company reaching out to the members. As always, Inside Timeshare sends a draft copy to the timeshare company for comment, we do not always get a response, but on this occasion the company did respond. It may have been at the eleventh hour, but we congratulate the timeshare company concerned for their reaching out and we hope that they are able to resolve the matter.

As a last minute replacement we publish a revised version of The Peasant of Venice and the Queen of Versailles, by Irene Parker, originally published in November 2016.

This week has been a rather quiet one as far as the courts are concerned, there have been many cases going before the judges, but the sentences are unlikely to be announced until the New Year. Although we did get news of two sentences issued this week.

The first was from the Court of First Instance No4 in Maspalomas, Gran Canaria, the judge in this case declared the contract with Anfi null and void. The reason was the length of the contract which exceeded that allowed by Spanish Timeshare Law 42/98, which states that perpetuity contracts or contracts with no end date and exceed the 50 years maximum are illegal. The client in this case has been refunded over 61,000€ plus legal Interest.

At the High Court No4 in Tenerife, Silverpoint was on the receiving end. The contract was declared null and void as it did not include any tangible product. Again under Law 42/98, a timeshare must include specific information such as a set apartment or an exact time of year. The client in this case has been refunded over 10,000€ plus legal interest.

Once again these cases were brought on behalf of the clients by Canarian Legal Alliance, contrary to what some forums run by some very dubious characters will tell you, these are genuine cases and are a matter of public record.

     

Now for this week’s replacement article.

The Peasant of Venice and the Queen of Versailles Revisited

    Jackie Siegel, Queen of Versailles  

By Irene Parker

December 14, 2018

“The Peasant of Venice and Queen of Versailles” article was first published November 6, 2016. I wrote the article because I wanted to explain how I went from being a 30 plus year timeshare owner without a timeshare complaint, question or post, to a full time volunteer whistleblower.

In July of 2015 I experienced a pathetically aggressive timeshare sales presentation in Florida. We had previously purchased points in Virginia because the company said they were adding New York properties, only to learn it would take about $10,000 in equivalent maintenance fee dollars to stay at the same hotel, same week that could be booked online for $1,000 plus tax. When I checked December 1, 2018, it would have cost $12,000 using our timeshare points. I don’t blame the sales agent. He may not have known about the poor value. It was the response from the company to the Attorney General listing all the times we had used our points prior to that purchase that bothered me. Eventually I was offered our money back for that purchase, but could not bring myself to sign the non-disclosure agreement.       

Rosa Parks said, “I was just trying to get home from work.” In my case, we were trying to get to our new home, moving from Bowling Green, Kentucky to Venice, Florida. It was my intention to return to my first love – teaching piano lessons. That all changed after the revolting timeshare presentation we experienced in Florida.  Disgusted, I returned to our unit, turned on the television and witnessed the jaw dropping house pictured above, being built by Westgate timeshare owners Jackie and David Siegel. I could not resist.

It was a hot July summer day in Orlando when my retirement turned upside down.

We entered the hospitality area where we were invited to attend a 55 minute “information only” presentation for existing owners. “Will we be paired with a commissioned sales agent?” I asked three times. “No”, Julie replied, “Only if you have questions in the last ten minutes. I attended and I learned a lot! We have group presentations now because we had so many complaints about high pressure aggressive sales sessions.” We did not sign the form agreeing to the 55 minute meeting because the fine print said we would be robo-called if we did. We were robo-called anyway. There was no form to be signed for the three hours that followed the 55 minutes.

A Diamond Resorts member recently sent me this comment from a former Diamond concierge describing an unfair and deceptive practice:

Concierge (Former Employee) – Virginia Beach, VA 23451 – December 3, 2018

A typical day of work consisted of misleading current owners and their guests in order to persuade and entice them to attend a timeshare meeting that could last well over what was initially disclosed….The hardest part of this job was knowing I was intentionally misleading owners/guests of the length of time for their timeshare meeting, as well as not disclosing it as a timeshare meeting as instead it was mandatory we refer to it as simply an “update on their current status” or “ways you can stay here and affiliated businesses in the future”. The most enjoyable part of this job was the interaction with varying people and the connections I gained therein.

https://www.indeed.com/cmp/Diamond-Resorts-International/reviews

Our Nightmare on Timeshare Street begins:

The next day we entered the reception area to be greeted by an attractive young lady. “Hello,” Donna greeted us. “Are you a commissioned agent?” I asked.  Puzzled, she took us by the arm and escorted us to the 55 minute presentation, retrieved us immediately after, and led us to her den.

I told Donna, “My husband is 77 years old. We do not want to invest in vacation plans because we need to investigate long term care plans.” “Why, we have many in their 90’s who come and enjoy our resorts!” she cried. “But we are in the middle of building a house and have no permanent residence at this time,” I countered. Kneeling and looking up, she gazed into my eyes and confessed she was a single mother and had to resort to her Diamond points when she divorced. “I know you didn’t put all your money in that house though,” she added. I kept saying over and over, “We don’t want to travel. We like our new house.” Frustrated, the manager ended by advising me to go to the website if I want to find out what’s new. Three hours and three sales agents and managers later, we returned to our unit.

I checked my email and learned the 4,500 points we had been promised for our Port Elsewhere Ozark timeshare deposit was credited only 3,000 points. Sure enough, I learned later the 4,500 points promised could be changed at any time for any reason. It’s all in the fine print.

I then decided to take my mind off this disturbing revelation by watching television. I turned on the FOX news show Property Man show hosted by Las Vegas Attorney Bob Massi, and there she was – The Queen! The King and Queen of Westgate timeshare were building a 90,000 square foot home that defied the imagination. Jackie’s clothes closet is 5,500 square feet!

http://www.realtor.com/news/trends/queen-of-versailles-q-and-a/

Thinking about the pathetically aggressive timeshare sales presentation we were deceived into attending, and the worthless points specifically purchased to stay in New York City, I wrote to Mr. Massi at Property Man never dreaming I would earn a response. Copying the letter to Diamond customer service, they credited the correct amount promised for our Port Elsewhere week.

A few months later a FOX producer called. I was asked if I would be willing to be interviewed by Mr. Massi. The producer told me the Queen of Versailles show wasn’t even about timeshares. It was about their house, but FOX had been flooded with timeshare complaints. She said I was the only viewer they asked to interview because I was the only respondent who said I wanted to talk about the positives in addition to the negatives of timeshare. I told her I was sorry, but I had just accepted a position as interim music director for a large church and could not participate, but I offered to research timeshare to help them with their talking points.

I started digging. The deeper I dug, the more alarmed I became. Wyndham, Westgate, Bluegreen and Diamond seemed to have the most complaints, with Disney, Hilton and Marriott far fewer. I submitted my research to FOX and returned to the choir. Six months later, after arranging a flight to Phoenix to stay at  a Diamond resort in Sedona, I received a call from the FOX producer, asking if we would agree to be interviewed by Mr. Massi in Phoenix as they had interviews scheduled that weekend. Some things are meant to happen.

The FOX producer told me David Cortese of Magical Realty had also been interviewed by Mr. Massi about timeshare resales. David is a member of the Licensed Timeshare Resale Broker Association (LTRBA). After viewing David’s segment, I contacted him to see if he would sell our Diamond points. I was told their company would not accept a listing to sell Diamond points. I surveyed all 64 LTRBA members and 22 responded also saying they felt Diamond points were worthless on the secondary market. “We feel Diamond has placed too many restrictions on the use of secondary points to be of any value to a buyer,” they sadly explained.

One of the LTRBA members asked if I would speak with a Hispanic family. Since this first October 2016 complaint, the calls and emails have not stopped. I have heard from 646 timeshare members.

Timeshare members want straight answers but straight answers are in short supply at some timeshare customer service desks. Callers or emailers explain how a sales agent lied to them, but when they contacted the timeshare company they were told, “You signed a contract.” Some described how the rescission period was dodged. Some things, like over promised availability, can’t be determined by reading the contract. I feel I was deceived by reading the contract which stated, “You can sell your points but we will not assist you.” They left out the part about no buyers.

From the October 2016 article describing what happened to the Hispanic family:

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

In August 2015, when they complained about maintenance fees, they said that a sales agent tried to convince them to purchase another 10,000 points in order to achieve Platinum level. He said 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. Then and now Platinum members can pay maintenance fees at $.04 per point, so if all 50,000 points were tendered, it would pay $2,000 towards a 2018 $8,631 maintenance fee bill.

If the family had agreed to the additional 10,000 points, they would have gone further into debt with little recourse. Based on hundreds of reported responses, if they had purchased the points, they would have been told, “You signed a contract” or “We are not responsible for what our sales agents say.” They have a daughter who just graduated from high school and has started college.

I spoke to the family not long ago. They relinquished their $60,000 worth of points that they had accumulated. They are still paying off the home equity loan.

Contact a member of the Licensed Timeshare Resale Broker Association to find out if your timeshare has resale value.

Property Man was preempted due to the 2016 election coverage, so our segment aired April of 2017. The Florida DBPR timeshare division only acted on 110 out of 2,360 timeshare complaints from April 2012 to April 2014, so ignore Pam Bondi.  Bob Massi and his advice on timeshare resales:

https://www.facebook.com/RealBobMassi/videos/1041694629230338/

From FOX I stumbled onto Jim Cramer of Mad Money’s investment news service TheStreet, where remarkable editors, possessing the patience of Job, provided a crash course in editing.

https://www.thestreet.com/author/1684637/irene-parker/all.html

A member who submitted an article to Inside Timeshare introduced me to Whistleblowers of America https://whistleblowersofamerica.org/. Accepting an invitation to attend a Whistleblowers Summit in Washington DC this year, I was introduced to OpEd News:

https://www.opednews.com/articles/Witness-to-Las-Vegas-Octo-by-Irene-Parker-America-181030-359.html

And of course, there’s Charles Thomas at Inside Timeshare in Spain and Wayne Robinson in Malaysia and Wayne’s book.  I was honored to edit and write the Forward. Everything About Timeshare, Before. During and After the Sale

https://www.barnesandnoble.com/w/everything-about-timeshares-wayne-c-robinson/1129749757?ean=2940161600962

So all in all, I’m getting great value from my timeshare points measured in the people I’ve met, readers who read my articles, and the gratitude from members who are grateful for straight answers. We especially appreciate our Facebook administrators and our growing team of members helping other members. I do believe we are a disruptor and hope our efforts will benefit sales agents who sell the product honestly, as well as forestalling new buyers and existing members from making a decision that has financially devastated more than a few families. When sold honestly, timeshare provides years of fun for friends and family.

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://everythingabouttimeshares.com/consider-exchange-options/

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

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

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

Thank you Irene for getting this article out to us so quickly, it is difficult to replace an article at such short notice, but at least the timeshare company did respond and for that Inside Timeshare was happy to replace the original one.

That’s it for this week, join us again next week our last one before Christmas.

To all our readers have a great weekend and remember to do your homework before engaging with any company that contacts you or that you have found on the internet.