Welcome to this week’s Letter from America, once again it is Diamond Resorts and the tactics employed by sales agents including the use of the Diamond Barclaycard. It begins with Bernadette and her campaign to have the Diamond CEO Michael Flaskey’s YouTube video to be removed. Please use the link below to sign the petition with Change.org.
After learning about Bernadette’s Change.org petition, asking to have a YouTube taken down featuring Diamond Resorts CEO Michael Flaskey, pointing the finger at exit companies, one of our readers reached out to share his experience after he suffered a disastrous arbitration outcome.
Bernadette’s timeshare company refused to believe that she had been deceived by timeshare sales agents at three different sales centres. She attended meetings looking for a way to be released from her timeshare due to her husband’s debilitating medical condition. The Missouri Attorney General’s Office suggested she retain an attorney after the timeshare company dismissed her complaint. Please sign Bernadette’s petition.
Frank and Betty, ages 88 and 89, ended up with a $197,000 timeshare loan and $19,000 in maintenance fees. Their interview is almost identical to the couple in the YouTube above complaining about their exit company.
Inside Timeshare has followed arbitration experiences shared by a number of timeshare owners. So far none of the reported outcomes have benefitted the timeshare consumer. In October of 2017, we published an article about arbitration referencing an article by Chris Parker, a reporter for City Pages. While much of the content of the 2017 article is outdated, some things have not changed. Inside Timeshare has heard from various attorneys that arbitrators hired by the timeshare companies in the U.S. can charge up to $400 to $800 per hour. Mr Parker’s article states arbitration fees estimated at $300 to $400 an hour.
“Should a dispute arise, arbitration forces consumers out of the court system and into arbitration where appeals aren’t allowed, corporations historically wield a huge advantage— when not outright rigging the system—and details of misconduct are kept private”
Former Minnesota Attorney General Lori Swanson: “To think that millions upon millions of consumers are forfeiting their fundamental right to have their day in court because of fine print in a contract….”
“Though arbitration may sound preferable to the expense and anguish of court, it hands a major advantage to companies. The costs savings aren’t much: Arbitrators usually charge $300-$400 per hour minimum and some bill into the thousands of dollars. But arbitration clauses typically bar the consumer from joining class-action suits. The strategy has emboldened fraud on a massive scale.”
Sen. Lindsey Graham (R-South Carolina) told the Wall Street Journal that such clauses are “a windfall for the companies, in terms of how you settle their cheating.”
“Even when someone does challenge them, arbitration rulings are usually private, with no appeals and little documentation. Like a tree falling in a vast forest, Wells Fargo’s customers didn’t hear the millions of other victims, and the press remained none the wiser.”
A staggering amount of money has been made by the financial elite since private equity seized timeshare. The wealth and the lifestyle of current and former Diamond CEOs – beginning with Diamond Resorts Founder Stephen Cloobeck:
Millionaire Wants Ex to Give Him Back Over $1M in Gifts After He Says He Learned She Posed on OnlyFans
Diamond’s top executives and directors beneficially owned almost 23 million shares in the form of options and company stock. If the transaction is completed, a filing stated, those 15 people “would be entitled to receive an aggregate amount of $624,131,129 in cash.” The bulk of that will go to Stephen J. Cloobeck, Diamond’s founder, and Mr Palmer, the chief executive. Mr Cloobeck would be entitled to $384 million and Mr Palmer would receive $173 million.
Michael Flaskey has been CEO since 2017. The most recent compensation figures available are from when Diamond was a publicly-traded company. In 2016 his total compensation including Salary, Bonus and Stock awards was $6,766,664.
My Arbitrations Resulted in a $95,000 Judgment Contesting $16,000 in Loans
By a victim of predatory arbitration, age 70
March 19, 2021
After hearing about Bernadette’s petition about timeshare companies blaming exit companies, I decided to share my story. I am one reason why there needs to be an Elder Senior Court due to the surge in FINANCIAL ASSAULTS on seniors, including HOME THEFT, IDENTITY THEFT, FAKE ARBITRATION SCAM, GRANDCHILD NEEDS MONEY SCAM, LAWYERS INFLATED FEES SCAM, THE TIMESHARE SCAM, The LONG TERM INSURANCE SCAM and many more
I first purchased timeshare points in 2016. On August 2, 2017, we attended a meeting at one of the company’s resorts in Las Vegas. Our sales agent Benito asked about our concerns. We responded that we were concerned that maintenance fees had risen to over $2,000 a year. Benito asked us, “What if you could vacation and not have to pay annual maintenance fees?” This attracted our attention. He explained that by using a resort-issued Barclaycard to charge purchases; we could offset annual maintenance fees at a rate of $.20 per dollar charged. Benito told us that he offset most, if not all his maintenance fees by charging almost everything to his Barclaycard. We bought a trial product from Benito to make us eligible to use points to pay maintenance fees. We were told we could start booking reservations for 2018 after 14 days (which was after the contract cancellation period).
After receiving the Barclaycard, I learned that the actual accrual cash value redemption rate was $.01 for general purchases or $.02 per dollar charged if charging items offered by the timeshare company. Benito had said the reimbursement rate was $.20 cents for Silver members and $.30 cents for Gold. Offsetting a $3,000 maintenance fee would require charging $150,000 to $300,000.
At the next meeting, we went to in 2018, we complained about the misrepresentation. The agents sympathized. They said Benito was one bad apple and not representative of their company. We purchased additional points to have access to more desirable inventory. They said they would wrap our old loan into a new loan, but the loans were never consolidated. As a result, we were required to have two separate arbitrations.
I complained to the timeshare company before contacting an exit company. The company dismissed our complaint in 2019 basically saying we signed a contract. I contacted an exit company that had good reviews. I paid them a one-time upfront fee of about $6,500 and was promised a money-back guarantee. I also paid a $750 retainer to the law firm that works with the exit company.
Early in 2020, we were surprised to learn that the timeshare company compelled us to engage in mandatory binding arbitration in Las Vegas. My stomach dropped because I had read that arbitrators favour the timeshare developers. We were further alarmed to learn that there would be two arbitrations, one JAMS and one AAA, because of the two contracts. My lawyer assured me that it would not be that bad since our arbitration would be in Nevada where laws are more favourable to my case. In speaking with other timeshare members I have learned that Nevada does little if anything to help the timeshare consumer.
The first (JAMS) arbitration concerned the points we purchased in Arizona after being duped by Benito. The loan amount for the first loan was about $13,000. The arbitration fees I was ordered to pay totalled $81,737. The loan amount to upgrade was $10,421.
The second (AAA) arbitration concerned our original purchase from 2016. Although the arbitrator ruled in my favour in this arbitration, I was ordered to pay an additional $13,941 for the timeshare company’s arbitrator fees. The arbitrator ruled that the company could not pursue me for the first loan because it had been cancelled due to nonpayment. He said they could not have it both ways and felt I had paid in enough as the loan balance was down to $3,371.04.
At the depositions and hearings that took place fall of 2020, the timeshare company lawyer spent significant time asking questions about the exit company. They scheduled a supplemental deposition after asserting that we did not provide all correspondence related to the timeshare company. However, all the claims and questions were essentially the same in the second deposition.
I believe I was used as a pawn in the legal actions the timeshare company has taken against the exit company. They filed a lawsuit against the timeshare company in January of 2020.
The total judgment against me for both arbitrations is $95,678. The difference of $79,678 is the timeshare company’s arbitrator and attorney’s fees. This amount seems punitive and unfair.
That is all for this week, join us again next week with more news and information on the very murky world of timeshare.
Inside Timeshare would also like to remind all Veterans and Serving Military Personnel who have been affected by unscrupulous sales tactics to contact Adam Siler on:
If you have any questions or comments or would like further information on timeshare matters, please use our contact page and Inside Timeshare will get back to you.
Have a great weekend and stay safe.