A New Friday Letter From America: Veteran & Active Duty Service Member Outreach

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

Email:
[email protected]

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. 

Our Experience 

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.

The Mission  

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]

Adam Siler     

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.


8 Comments

  • Nurse Beth

    February 26, 2021

    I am not a veteran. I am a front-line Covid nurse, but I think nurses need to do the same as Adam. I have contracted Covid and recovered. I was sick for almost two months. I recently got my taste and smell back. I am fully vaccinated but still have to maintain full protection because there is no guarantee that I cannot still contract Covid and give it to someone else. I still care for Covid patients.
    My mother gave me 10,000 Diamond points in 2019. I have never used the points. I attended an orientation at Hyatt Place Hendersonville near Nashville to learn how to use the points. As a result of attending the orientation, I am financially ruined. I was told that I could get 5000 more points for $4,500. I was shown on a tablet where I signed $4,500. The only paperwork I was given stated $4,500 which was the amount charged to a Barclaycard. I was 24 when I purchased the points. After I finish my graduate nursing program I will have about $75,000 or more in student loans. I asked about a hard copy of the contract. They said the contract was on the tablet but I never received the tablet that was used to sign the contract. The contract came about two weeks later, with no postmark date. Imagine my shock when I saw there was a $40,000 loan. NO WAY would I have bought $40,000 in vacation points. My credit has gone down 200 points. I cannot buy a house or car.
    I reached out to Diamond as Flaskey suggests Diamond members do. Diamond records the closing/signing session. I asked if the contract was just for $4,500. They said yes. They said the actual contract would be mailed. Diamond denied my request to cancel the loan. I received a call from a Diamond representative. She suggested I talk to customer service or a Hospitality team. I did and I emailed the complaint below. In September of 2020, I spoke to Kathy in customer service. She suggested I request a mutual release by emailing Financial Services. I did that too. No one has responded.
    I am writing to warn others about how something like buying timeshare points for a vacation can be the worst financial mistake of your life.

    Reply
    • Alan

      March 3, 2021

      As a 100 percent disabled Vietnam Combat Vet , we were held 9 hours until we wear worn out and signed a contract . After getting home , I was asked to attend a special event and put down a deposit . I got sick the night before and had to cancel and they gave me a hard time . I decided to investigate what they told me and found out they were a bunch of lies . They refused to refund my deposit and I filed complaints every which way and wouldn’t make one payment on my loan . Finally they got tired of me and refunded my deposit . It is a shame what time share reps do the elderly and vets. They should be held accountable and big financial fines to the injured parties

      Reply
      • Adam Siler

        March 3, 2021

        I completely understand as my wife and I were at ours from 8 am tell 3 pm in which Jonathon had to leave to go take care of something with his family. It is very unfortunate that prey on the elderly as well. The business could be so much a win win for everyone if they didn’t deceive people to put money in their pockets.

        Reply
  • Ali El-Kerdi

    February 27, 2021

    This issue isn’t simply with Diamond! HGV sales reps were incredibly aggressive and lied every step of the way to get us to sign. They were incredibly aggressive and deceptive. Hilton encourages and rewards sales agent who lie, is alarming. It is my understanding that this isn’t exclusive to HGV. I am learning that the entire industry is tarnished and deceptive.

    Reply
    • Bernadette Krueger

      March 8, 2021

      I am not a veteran, but I am a Diamond member that has also been deceived by sales agents adding to my loan, giving me lower interest rates with higher payments along with telling me I can refinance. But was unable to. I hope that you will reach your goal with this article.

      Reply
  • Lori

    February 28, 2021

    This is absolutely appalling and I do not understand how this continues. Why aren’t the sales reps held accountable for what they are telling people? It is out of control and Westgate Resorts likes to stand behind “unfortunately it is not possible to validate verbal communications she may have had with the sales agent”. Almost as if the sales team is not part of the company and they have no power over what sales are telling people.
    If the Timeshare Companies truly cared about their owners and were honest from the beginning the exit companies would not be feeding on countless unhappy owners. Yet the Timeshare companies are trying to look like heroes by taking those exit companies to court. They are not fooling me, they need to spend that money on keeping the owners happy and informed of the truth.

    Reply
  • Tb

    March 5, 2021

    I still cannot understand how diamond gets away with these practices. Such greed. Destroying other people’s lives for their own personal benefit, without even batting an eye. When will Justice be served? When will all the wrongdoings be righted?

    Reply
  • Karen

    March 7, 2021

    I am a Veteran and a platinum member. In 2016 I was sold additional points UNDER A NEW PROGRAM for the purpose of having enough to turn in half to pay my maintenance fee. No such program existed. After a lot of effort and trauma, I got out of that situation because the salesman’s signature was missing on the contract’s rescission page. I thought I learned my lesson. In late 2020, after saying NO MEETINGS, NO GIFTS, NO CASH, NO DEALS to numerous agents every time I traveled, I was convinced to go to an owner’s update. This time I was shown a new Owner’s Manual. On page 28 it stated that points could be sold to other owners. In deed, the sales agent was acting as his own sub-contracting company, buying and managing points and making vacation reservations for “his” clients. In fact, he told me he and several like-minded colleagues controlled so many points, owners would soon HAVE to go to them for reservations. Also, he advised me that due to various real estate and business realities, my Hawaii Collection points would soon be worth a lot of cash, so the more the I bought now the more I could cash in later when DRI sold that Collection. This would get me out of my timeshare at an appropriate age, and, I would gain back some of my investment. The QA session was recorded; the salesman advised me what my answers should be to the QA agent (WARNING BELL). It took me a while to figure out why my head wasn’t warning me like my gut was. That Owner’s manual I saw specified how to re-sell points – was it really a valid document? a change that big would have been announced by the CEO. I called my financial advisor, who tried calling an acquaintance at Apollo Global Management, and, I called Irene Parker. Apollo won’t return Stewart’s call and Irene was apoplectic that I fell for another pitch (albeit, a more sophisticated one). The rescission period was five days; within that period I returned the contract via a notarized overnight letter, AND a fax, AND I turned the contract back in to the sales office as the documented stated I could. Now my mantra is: TWO CLOSE CALLS! I’M DONE!

    Reply

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