Diamond Resorts or A Nightmare on Timeshare Street.

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Diamond Resorts were unknown in Europe until the takeover of Sunterra in 2007, for many members, they believed it was going to be a new start. Sunterra formerly Grand Vacation Club had a reputation that was to say the least heavy handed, the sales side was aggressive and showed no quarter to those pulled in from the streets. Long standing members with fixed weeks refused to change as they had originally been sold their timeshares as “investments” in property. They also had the right to vote on maintenance fees and other matters which affected the resort they owned.


When Sunterra filed in the US for Chapter 11, which is the equivalent to filing for bankruptcy, many owners wondered what would happen to their “investment”. For those on holiday the talk around the pools and bars was what would happen next, rumours abounded. Information was non existent, the sales decks had been closed with all the reps being laid off. There were still a few of the in-house reps but they had no idea what was going on.


It was then announce that a new company from the States was looking at taking over from Sunterra. The takeover was announced in the Las Vegas Review Journal 28 April 2007. Steven Cloobeck´s privately owned Diamond Resorts paid around $700 million, and also took on responsibility of Sunterra´s debt of $375 million. Was this the new beginning the owners had been waiting for?


Unfortunately, as time has moved on, it has turned into a nightmare for many.


The points system was marketed very aggressively, more so than under Sunterra, owners were basically forced into converting. Around 2008 the first additional levy was introduced, Diamond claimed it was due to the state of the Euro to the Pound. This was only the start, in the first three years management fees increased by around 20-25% annually, for many owners this was a huge burden and they wanted out.

For those who converted to the points system, the fees increased even more, on one forum a poster claimed that their original management fee had gone up from around £485 for their fixed week to £1200 since converting into points. Another complaint which became all too familiar was the lack of availability. With the fixed week system the holiday was guaranteed, you had the week and apartment you paid for. Points members continually complained they could not get into their home resort since converting, the answer from the reps was always the same, “you need to upgrade to more points to guarantee this”. In other words it became a way of making more sales, at the expense of existing members.


As for those unfortunate to be pulled from the streets or “kidnapped” by the OPC´s, their nightmare was just beginning. Aggressive intense presentations with the emphasis on today became the norm. The story from many reps over the years was the same, only sell the minimum number of points at the first presentation, then in-house would upgrade the following year and so on. It became a conveyor belt for making money.


Another aspect was those that could not afford to buy, loans were arranged by the sales decks with the likes of Barclays Partner Finance. These loans are now subject to several High Court (London) cases. It is claimed that no credit checks were made and no checks to see if the person could actually afford to repay. On many of the loan agreements the purpose of the loan was stated as “Home improvements”.


For those who wanted out, there was no way out. They were unable to sell the points, Diamond would not allow it, so they had to pay yet again to convert to fixed weeks. Then many lost a great deal of money to bogus resale companies who promised to sell. Then if they did manage to sell there was then a charge by Diamond to transfer. Obviously for the person who bought, the rollercoaster ride of continually upgrading had just begun.


For many owners the financial burden had taken its toll, circumstances had changed. One couple had a business fail, they both ended up unemployed, could not pay their management fees and fell behind. They approached Diamond but to no avail. Eventually the debt collecting agency appeared on their doorstep, the amount had increased drastically with the interest, late payment surcharge and of course the agencies fees. This particular couple ended up bankrupt.


Even sending your documents back and resigning from the club did not work, according to Diamond: “If a member ceases to be a member following resignation by him, he will continue to own the points held in his name and will remain responsible for all continuing liabilities (such as management fees & other appropriate charges) until such time as he transfers his membership in accordance with Article 8 or the Management Company elects to sell his points on his behalf”.


And so the story goes on. Diamond is one of the most difficult timeshares to get out of in Europe, they actively chase unpaid maintenance causing untold misery to countless members. But there is a glimmer of hope on the horizon, especially for those who bought or upgraded in Spain.

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One law firm has acted for many timeshare owners using the laws put into place in 1999, following the European Timeshare Directives. This company Canarian Legal Alliance has so far achieved eleven rulings from the Supreme Court, the highest court in Spain, resulting in these laws becoming jurisprudence.


So far they have had only four cases against Diamond/Sunterra, but there are around 58 at various stages of litigation. Diamond are also responsible for those timeshares purchased during the Sunterra days, even if they have never upgraded with Diamond. Under the law 42/1998, it has been deemed that any deposit taken during the 14 day cooling off period is illegal. Any contract over 50 years (perpetuity) is illegal. Points and floating week systems are also illegal.


Once other European countries bring in the same legislation, then owners of timeshares in the UK, France, Italy and all over Europe will have the same protection. The flood gates are not quite open yet, but the gap is getting bigger.


You can also follow what is going on with Diamond in the United States, by following the writer Irene Parker of The Street at the following link. She has several articles going to be published in the near future, Inside Timeshare will publish the main points in these stories and include the links for the full account.



If you have problems with any timeshare matter, or just want information on companies you may be thinking about doing business with, contact Inside Timeshare. We are here to give you the facts.




  • Christina Carr

    July 27, 2017

    We got into a timeshare with diamond resorts in 2010. The sales pitch went on for 5-6 hours. We ended up getting 2,500 posted which is not enough points to get any rooms. We were given a free weekend stay at one of their properties in Palm Springs which ended up being another timeshare pitch for us to upgrade our points. They locked us in at a guaranteed rate of 3.33/pt even though we declined it. We recently took a vacation to San maarten. We had enough points saved up to visit during the hurricane season. We booked it and we were called to get their vacation of a lifetime experiences to interact with a dolphin…we got 2 people for $99 to do this…sounded cool….but we couldn’t take our own pictures and it cost $80 for the pictures they put on a cocktail for us with only 24 pictures. Then the next day we had to attend an update meeting or pay $480 for the dolphin encounter trip. So we made up our minds to say no. As we were about to refuse…the manager came back with a paper and pointed out to the rep that was working with us that there was an internal discrepancy on the paper. We had that guaranteed lock in rate of $3.33/pt. Since Apollo took over the company the points the price increased to $8.64/pt. Under the new program it would cost $74,500 for their min of 8500 points. If we walked out we were told the price per point was going to increase every 3 months. Under the guaranteed rate we had before we could buy the points for a silver membership for $45,000. It will increase our current payment of $200/more to $750/month. It will also increase current maintenance fees from $900/ yrs to $2400/ yr. It really wasn’t the best time for us to upgrade, but we did it because there was a clause on the paperwork that said if you decline at the update meeting or within 18 months, then you waive the right to your guaranteed rate. So we signed the paperwork. At these presentations they tell you how you can do all these loops to get out of paying for air fare, maintenance fees, and everything else by using your points. I just hope I can figure it out without going bankrupt. Love to travel, but not sure how I really feel about timeshares yet.


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