Welcome to the end of another week with Inside Timeshare, going away from our usual Friday review, we today bring you a “Letter From America” special. It is the story of “predatory” lending to service personnel and Veterans. Inside Timeshare has published on this subject in the past and we are pleased to publish this article by Adam Siler, (
https://www.military.com ) we also hope that his call will be heard and will be an instrument of change. Contact details are placed at the end of this article.
Predatory Lending Begins with Misleading Sales Tactics
A Veteran and Active Duty Service Member Outreach
By Adam Siler, Air Force Veteran
February 23, 2021
I am a Florida resident. I served eight years in the Air Force. I am writing to ask veterans and active duty service members to reach out to me through Inside Timeshare if you feel you experienced unfair and deceptive timeshare sales practices and lending.
Veterans who served their country are often targeted. Harming veterans is wrong, but when an active duty service member is unable to refinance, they could lose their security clearances if they default. This makes timeshare a threat to national security. Payday loans have been deemed off-limits to the military.
Protecting our Protectors: The Defense Department’s New Rules to Prevent Predatory Lending to Military Personnel
The term “predatory lending” describes a wide variety of unfair or abusive loan or credit transactions and collection methods.”
Predatory lending is a process that begins with misleading sales tactics directed at borrowers who may not fully understand all the provisions of the contracts they are signing. It ends with borrowers unable to repay the loans they have taken due to excessive fees and interest. (Dawn Goulet, Student Author, 2007)
There are extra HUD disclosures required for veterans buying homes. A timeshare can cost as much as a house.
- There is an Assumption Approval clause as per which the loan is not valid unless the Department of Veteran Affairs approves it.
I reached out to Inside Timeshare. I learned that what I experienced in 2020 is almost identical to what an Active Duty Navy couple experienced in 2017. This is beyond coincidence. Diamond Resorts believed our sales agent, despite the fact that he provided us with a handwritten illustration of a 7% interest rate, drastically lower than the 14% interest rate he knew we could not afford.
An excerpt from the 2017 Inside Timeshare article published December 19, 2017
We knew we could not afford this vacation product at the interest rate being charged. In January of 2017 we purchased 7500 Diamond points at Virginia Beach Oceanaire Resort for $28,200. Our Loan Balance is $24,163.36 and the interest rate 15.99%. Sales agent Tony Jones said we would be able to refinance. He told us there were refinancing companies that specialize in timeshare. We have since learned banks don’t finance timeshares. We had questions and planned to refinance but decided to wait until the orientation. Tony never answered the phone.
We went to an orientation in Orlando at DRI Resort Mystic Dunes March 2017. Our sales agent was Jonathan Pineda. We purchased 4000 points for $15,732. This loan balance was $13,271.16 at 18.6794%. Like Tony told us, Jonathan said both loans could be refinanced and combined because other companies specialize in refinancing timeshares. It would be no problem to contact one of them after we made our first payment.
Jonathan said that we needed to get to Gold so that we could pay our maintenance fees with points. We have since learned only Platinum members can use points to pay maintenance fees at $.04 per point (a worthless benefit). He said it would be worth it to spend all our savings so that we would not have to pay maintenance fees. We were not comfortable so we only bought 4000 points, which still depleted our savings.
Before reading about our experience, watch this YouTube. Imagine how we feel. Mr Flaskey said, “And they could have just called Diamond Resorts.”
We have no choice but to default. A Diamond Hospitality agent I spoke with said that I needed more incriminating text messages from Jonathon. I reached out to Diamond Resorts for comment, but they did not respond.
We first bought a Sampler (trial product) at Diamond’s Cancun Resort in Las Vegas in 2018. On March 6, 2019 at Diamond’s Kitty Hawk Resort we changed our Sampler points to 7,500 ten year term points.
On June 2, 2019 we attended a required new member orientation at Diamond’s Mystic Dunes Resort in Orlando. We thought we were to be trained on how to use points. We were informed that because we did not attend an orientation within 90 days we lost our price freeze. We were never informed of this. I broke down in tears because I felt we could lose everything we had wanted to do to vacation with our family.
At a subsequent meeting at Mystic Dunes on July 20, 2020, we met with Jonathon Pineda. Jonathon said he was not a sales agent. He then worked out the numbers to transfer our term points to annual points and buy 30,000 U.S. Collection points.
Jonathon said refinancing would be no problem with our credit rating. He said he used to do stuff in the finance world. He set up an appointment for August 17 at 6:00 pm to make some calls. His exact words, “Let me get with you and we’ll make some calls.”
Jonathan estimated a 7% loan rate, as opposed to Diamond’s proposed 19.99% interest rate. I cannot include the actual proposal with his notes because of a disclaimer. I am subject to penalty if I show the proposal to anyone not employed by Diamond Resorts. This would be comparable to a potential buyer offering a proposal to buy a house, but not allowing anyone to review it. The purchase price listed for 22,500 points was $219,150. Our actual purchase price for 30,000 points was $67,157. The disclaimer:
This document contains proprietary information belonging to Diamond Resorts. Distribution of this information to unauthorized persons, including but not limited to persons not employed by or agents of Diamond Resorts or to persons not listed on this option is strictly prohibited and subject to penalty.
Jonathon wrote on the proposal:
½ 12.99 $520 ½ 3 letters i.e.: 7% = $194 loan
The $67,157 was financed at a 14% interest rate. At 14% the monthly payment is approximately $1,043 per month ($58,000 is interest). At 7% the monthly payment would have been $780 per month ($26,500 interest). That’s a big difference.
Jonathan told us he would do the paperwork to help us use a Barclaycard “benefits card” to cover about 50% of our maintenance fees. He explained this as a program between Diamond and their partner Barclays Bank. The 2500 written on Jonathon’s illustration was presented as $2,500. My wife and I both clearly understood this.
Jonathan wrote out benefits A – D, highlighting in red the real maintenance fee relief program which is of such poor value to be of little benefit.
Benefit 1: Wait 12 to 14 days (the rescission period is ten business days)
Benefit 5: Event of a Lifetime
Jonathon said we could go on “Events of a Lifetime” (EOL) promotions and not have to attend a sales presentation. Jonathon said this was one of the great benefits of Gold loyalty level. He advised that I could go on the “soon to be updated website” to view scheduled events. The website update never happened. A Diamond coordinator later said any EOL requires a presentation and that you can’t see EOLs on the website. You have to call to book them.
As we talked with Jonathon, he would go into his bosses’ office, Chris LeBlanc. He returned excited because he received approval for a lower price saying we were part of a Legacy contract from another member.
Jonathon told us not to say anything about the Barclay maintenance fee relief program or the refinance when we signed papers or they would “kick it back.” He said it had something to do with underwriting.
When I followed up to refinance Jonathon said he could not talk to us because his son had a terrible car accident. He texted me pictures.
We went back to Mystic Dunes in November of 2020 to speak with Jonathon but he was not in. I asked a manager from a previous meeting about how to get out of the contract because we could not afford the interest rate. We spoke with Chris LaBlanc. He told us he sent a message to the finance department and someone would contact us. We asked about the Barclaycard. Chris said he saw nothing in our file about a Barclaycard.
We later learned that banks don’t finance timeshares. A sales agent should not assume a buyer is qualified for a low interest personal loan or a home equity loan. We do not own a home so a home equity loan was never an option. We could not refinance. There is no way to offset 50% of maintenance fees.
In going through my packet of information, I found Diamond’s Clarity Promise of Respect for the Customer and an assurance that we would be provided transparent and accountable information.
I appealed to the following: Mr Michael Flaskey, CEO, Mr Jason Gamel, ARDA, Mr Kenneth McKelvey, ARDA-ROC, Association of Vacation Owners, Nicole Drayson, Federal Trade Commission, Military and Education, Mr. Jay Mayfied, FTC, Lending, Charles Thomas, Inside Timeshare, Consumer Financial Protection Bureau (CFPB) https://www.facebook.com/CFPB/ Florida Attorney General’s office.
Diamond offered to reduce our interest rate to 11% from 14.73%, reduce the price per point, push the maintenance fees back one year, and push the use of points back one year. Refinancing at 11% is of little help, plus we expected to receive $2,500 from Barclays to offset maintenance fees.
I hope you can see why I am asking for Veterans and Active Duty Service Members to join my efforts to have Veterans Affairs look into timeshare lending. There is too much opportunity for smoke and mirrors. I have been reaching out to other veterans and have learned what happened to us is not uncommon.
The FTC’s definition of an Unfair Practice:
First of all, the injury must be substantial.
Second, the injury must not be outweighed by any offsetting consumer or competitive benefits that the sales practice also produces.
Finally, the injury must be one which consumers could not reasonably have avoided.19
https://www.ftc.gov/public-statements/1980/12/ftc-policy-statement-unfairness December 18, 1980
In timeshare, buyers are demanded to buy the same day.
Find me at Inside Timeshare
Or email: [email protected]
Thank you Adam for a very enlightening article, to all our readers Inside Timeshare asks you to share this story on all social media to help Adam in his quest. You can use our contact page and Inside Timeshare will ensure that your emails will be passed on to Adam or you can email directly to the address above.
Have a good weekend.