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Better Business Bureau

Friday’s Letter from America

This Letter from America was originally scheduled for publication in August, it follows the revelations published here about a crucial decision from Scotland’s Court of Sessions, by Lord Sanderson. It is a US perspective of Mr Trump and his relationship with certain timeshare moguls, just like the story of his involvement in Scotland, it does not paint a very good picture. This article also briefly shows the efforts and role of the “Regulators” in the U.S. So it ties in with another article published this week. For those of you who are not familiar with the “Timeshare Mogul” named, click on the YouTube link and watch the “Queen of Versailles”, you will then ask yourself the question, “Is this where my money has gone?”

Trump and Timeshare

By Irene Parker

U.S. names like Trump and Biden are not mentioned in polite company without jeopardizing relationships with friends and family. There are many reasons to like or dislike both named politicians, but those on the side of consumer timeshare protection have reason to question former President Trump’s biased stance on timeshare sales and marketing practices.

Charles reported earlier this week on questionable lending as pertaining to the Trump Organization’s acquisition of the Turnberry Resort and golf course in Scotland. A look back to what happened in 2016 provides some political timeshare history.


Pictured left front Westgate owner David Siegel

Pictured above is candidate Trump in 2016 on the stump. Westgate owner David Siegel of Queen of Versailles fame is seated to Mr Trump‘s right. The Queen of Versailles documentary describes the couple’s 90,000 square foot Orlando home that includes Mrs Siegle’s 5,500 square foot clothes closet. The documentary took Best Director at Sundance some years back.

I have no objection to great wealth, but a number of Westgate owners have reached out to me or our volunteers, unable to exit their timeshare. Some have debilitating and chronic health conditions. One couple, the husband, age 90, was forced to default on their timeshare week because Westgate objected to their paying their broker his $800 commission after the broker had found a buyer offering $500. I know of no honest timeshare resale broker (those who charge no upfront money to list a timeshare for sale) that will accept a listing for Westgate units because it is written into the contract that Westgate is entitled to 50% of the commission.

The  Consumer Financial Protection Bureau is the federal agency in the U.S. that seeks to protect consumers, along with the Federal Trade Commission. The CFPB in 2016 fined Wells Fargo $100 million when agents opened unauthorized accounts to reach performance goals and compensation incentives.

Westgate underwent a two-year investigation concerning sales and marketing practices. According to Buzzfeed News, Diamond Resorts was the next likely candidate to come under CFPB scrutiny. Not only was the Westgate investigation dropped almost immediately after the 2016 presidential election, the CFPB was all but dismantled.

REGULATORS ARE LOOKING INTO AMERICA’S LARGEST TIMESHARE SELLER March 18, 2016

https://www.buzzfeednews.com/article/matthewzeitlin/financial-regulators-are-looking-into-americas-largest-times

According to the CFPB’s civil investigative demand (CID), the Westgate investigation looked into possible violations by salespeople involved in “the sale and financing of timeshares engaged in, or are engaging in, acts or practices in violation of the Consumer Financial Protection Act, the Fair Debt Collection Act, the Electronic Funds Transfer Act and the Fair Credit Billing Act.”

Where is the CFPB today?

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today issued a report highlighting legal violations identified by the Bureau’s examinations in 2020. The report also highlights prior CFPB supervisory findings that led to public enforcement actions in 2020 resulting in more than $124 million in consumer remediation and civil money penalties. June 29, 2021

https://www.consumerfinance.gov/about-us/newsroom/cfpb-report-highlights-supervisory-findings-of-wide-ranging-violations-of-law-in-2020

Anyone who is unable to resolve their dispute, after reaching out to their timeshare company, and feels they experienced unfair and deceptive practices, should file a complaint with the Federal Trade Commission, the Consumer Financial Protection Bureau, the state Attorney General where the contract was signed, and the Better Business Bureau. It is only because of a volume of complaints that Timeshare Sales appeared at #7 on the FTC’s list of Top Ten Scams at $17.4 million and Timeshare Resales (We have a buyer for your timeshare scams) #10 at $12.5 million.

https://www.aarp.org/money/scams-fraud/info-2020/ftc-top-scams.html

Inside Timeshare will say this again, there is nothing wrong with the concept of timeshare, for some, it is a good option and suits their vacation needs, but as always it is the way it is sold and managed. The consumer is just the proverbial “Cash Cow” to be milked of their cash by the greed of the industry.

Inside Timeshare welcomes your views on this subject, Inside Timeshare can see many similarities in what is happening in the timeshare world, not just in Europe but in the US, Canada, Australia and elsewhere. Eventually what happens in one place will happen elsewhere, it is an international problem, so we invite you to use our contact page or just leave a comment. Have a great weekend.

Friday’s Letter from America

Welcome to the end of another week with Inside Timeshare and another Friday’s Letter from America. This week we welcome back Adam Siler with his article regarding what the Federal Trade Commission really does need to know about the practices used in timeshare sales and marketing. We all know and it is totally apparent that the timeshare companies allow their sales agents to say and do what they want, as long as they get the sales. How many times have we heard Diamond say that “They are not RESPONSIBLE for what their sales agents say” or “you signed the contract”. They don’t care, they have your money and then more by way of maintenance fees and continual upgrades. Things do have to change and they need to change drastically, enjoy Adam’s article.

What the Federal Trade Commission Needs to Know About Timeshare Sales and Marketing Practices 

https://lh5.googleusercontent.com/AYfEKEirNuYJzOLeJIJvTuhF7BAq--wuLMczPdmHUm9F-lblwpxzOdplbnMA1KOk5EE05lt7jYUAqY6A5Iu-F-DHQg2DsVVMnsqNuIdyAmfM1xNoS0sNnRBZT4wMc8BgAiL8eXmC

By Adam Siler

[email protected]

April 9, 2021

A group of concerned timeshare members proposed nine changes or disclosures we feel are necessary to correct unfair and deceptive timeshare sales and marketing practices. We submitted our proposed changes to the Federal Trade Commission. Your feedback would be appreciated. Part of my veteran and active-duty military outreach is to have timeshare presentations declared off-limits for active duty service members. An active duty service member may lose his or her security clearance if they foreclose on a timeshare loan.

Timeshare Sales are #7 on the FTC’s Top Ten Scams list. Anyone who experienced unfair and deceptive practices should file a complaint with the FTC.   

https://www.ftc.gov/faq/consumer-protection/submit-consumer-complaint-ftc

What can the FTC do? 

The FTC protects consumers by stopping unfair, deceptive or fraudulent practices in the marketplace. We conduct investigations, sue companies and people that violate the law, develop rules to ensure a vibrant marketplace, and educate consumers and businesses about their rights and responsibilities…. 

https://www.ftc.gov/about-ftc/what-we-do

I reached out to Inside Timeshare after experiencing deceptive timeshare sales practices in Florida. Since my article was published February 26, I received a sixth report from a timeshare member who described how the same sales agent, who promised me the elimination of 50% of my maintenance fees, told an existing member that if she achieved a new 100,000 point status, she could take 40% of her points and pay all her maintenance fees. The report was submitted by a Secret Shopper who did not buy. 

Multiple complaints against the same agent provide a level of proof, albeit a lower level of proof. It’s all about proof. Timeshare buyers need to record their sales presentation. A recording is clear and convincing evidence. Permission to record must be granted in two-party states.

Standards of Proof

  • Beyond a reasonable doubt.
  • Clear and convincing evidence.
  • Preponderance of the evidence.
  • Probable cause.
  • Reasonable belief.
  • Reasonable indications.
  • Reasonable suspicion.
  • Some credible evidence.

Preponderance of the Evidence according to Justia:

In most civil cases, the burden of persuasion that applies is called “a preponderance of the evidence.” This standard requires the jury to return a judgment in favour of the plaintiff if the plaintiff is able to show that a particular fact or event was more likely than not to have occurred. 

https://www.justia.com/trials-litigation/lawsuits-and-the-court-process/evidentiary-standards-and-burdens-of-proof/

When we asked a company employee about the new 100,000 point program proposed to our Secret Shopper, the truth is that having 100,000 points would allow the member to not have to pay maintenance fees on unused points. Accumulating this many points would require an outlay of $300,000 to $400,000 and points have no resale value. Six similar complaints against one sales agent provide a reasonable belief, indication and suspicion, but without the sales session recorded, had the Secret Shopper signed a contract, her complaint would have been dismissed because of lack of proof. Record your sales session or don’t buy.    

Nine Proposed Changes to Unfair Timeshare Sales and Marketing Practices Based on an Analysis of Common Complaints

1.   A disclosure warns the buyer that if they show their proposal to anyone outside of the timeshare company, they are subject to penalty. This is unfair, especially for those who may be of diminished capacity. Contracts can be for $100,000 or more. Any consumer should have the right to seek a professional opinion or the opinion of a friend or family member.

“Distribution of this information to unauthorized persons, including but not limited to persons not employed by agents of (the company), or to persons not listed on this option, is strictly prohibited and subject to penalty.” 

Our agent tried to convince us to purchase points for $11.40 per point. Just the week before, another sales agent attempted to sell us the same points for $4.79. Manager Brett asked us where the $4.79 came from. We shared the paperwork we had been given. He became rude and threatening saying, “it is illegal for you to have these papers.” The papers had been given to us.   

2.    If the closing (signing) is recorded, the device should not be stopped while an agent explains an item a buyer questions. The question and answer should be recorded.

3.    If a recorded closing can be used against the buyer, the buyer should be allowed the opportunity to record the sales session to prevent agents from coaching the buyer on how to “pass” the recorded signing session. 

4.    The purchase price should not appear as an inflated retail price of all purchases. An additional purchase should be identified on the contract as an “Incremental Purchase” instead of “Additional Equity” as the use of the word equity is misleading. Anyone who has been involved in a traditional real estate transaction would logically assume equity to mean actual cash value rather than vacation time. Timeshare points have little to no resale value. 

In the following complaint, a senior couple believed their sales agent; so they did not question the ability to refinance. Since they did not bring refinancing up on the recorded closing, the company initially dismissed their complaint. That’s how the recording can be used to entrap the buyer.  

Our sales agent explained that we could reduce our monthly payments by getting a HELOC through U S Bank using our “additional point equity” of $240,040 which he highlighted in green. He provided an ad and assured us a rep from U S Bank would call us after five days (the contract cancellation period). We would only have to pay $1,349 for January and thereafter $649. The purchase price was $288,300 less “additional equity” of $240,040 = $48,260 for 7,000 points. We financed: $87,405.85 including a prior loan.

5.    If disputing a contract, the buyer should be allowed to listen to the entire recorded closing without obtaining a subpoena.

6.    It should be disclosed if the QA agent is incentivized. A lawsuit states: 

It is not disclosed to the purchaser that the Quality Assurance employee has a financial stake in the transaction and is compensated based on commission dependent on the number of Quality Assurance presentations given; of which is paid only if the purchaser completes the purchase.

Case 2:18-cv-00903-RFB-GWF Document 3-1 Filed 05/18/18

7.  The buyer should be allowed 24 hours to consider their purchase. 

8.  The buyer should be provided access to the booking site prior to the end of the contract rescission period. Often first-year usage is not until the following year. Buyers don’t even know what they bought because inventory availability cannot be determined by reading the contract.  

9.  The state-mandated Public Offering Statement (POS) (Disclosure Statement) should be presented by the closing agent during the recorded closing, not by the sales agent. This state-mandated document is often hidden in a stack of documents. Two sales agents reported that the policy changed to having the sales agent provide the POS, instead of the QA agent, after the decision was made to record the closing.   

Clearly, timeshare sales and marketing practices have room for improvement. Wyndham has over 1,700 Better Business Bureau complaints and a Pattern of Complaints alert:

BBB files indicate that this business has a pattern of complaints concerning misrepresentation in selling practices. Consumer complaints report that the verbal representations are inconsistent with the written agreement. According to complaints, claims include representations that the purchase is an “investment” and the same as “real estate” in that it will increase in value. Owners report mandatory meetings that they are led to believe are to introduce new features and benefits but result in a sales presentation to purchase or upgrade their points. In some instances, owners are encouraged to complete a survey or questionnaire which results in another sales presentation to purchase additional points.

Bernadette in Oklahoma is a member of our team. She launched a Change.org petition asking that a YouTube be removed. If an Attorney General appears on YouTube warning about exit companies, a YouTube should be produced with an Attorney General warning about timeshare companies.    

https://www.change.org/Michael-Flaskey-MO-WA-AG-take-down-YouTube

Email me if you would be interested in joining our efforts to make timeshare sales more honest and accountable. Too many families like mine have been harmed. 

We seek to provide timeshare members with 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.

See the source image

Thank you Adam for your contribution this week and we look forward to receiving your next article.

To all Veterans and Serving Personnel who may have fallen foul of unscrupulous sales agents please email Adam with your story using the email address below. Only together can we influence the industry to change.

[email protected]

That is all for this week, we hope you have a great weekend and join us again next week for more information and stories about the murky world of timeshare.

News From Across the Pond

Today we travel across The Pond and report on the battles that are going on in the US with regards to Diamond Resorts. We know from past articles that Diamond are not the favourite timeshare company in the US, their underhand tactics on sales presentations have been well reported here. We have also reported on Diamonds legal battles with “exit” companies, a problem which to be honest is of their own making, today we bring you news of yet another lawsuit brought by Diamond against one such company. We also include news of another case which was concluded last year which Diamond actually lost.

First, we have a look at the latest case to be filed against an “exit” company, Mutual Release Corporation.

The case was filed at The United States District Court For The Western District Of Missouri Southern Division, with the case number 6:18 – cv – 03053 – MDH. This case ended with an injunction against the company and its agents and employees. This injunction is permanent.

The details of the injunction are far-reaching and basically ends this company’s involvement with any Diamond member. The full text of the injunction can be read at the following link:

https://www.docketbird.com/…/mowd-6:2018-cv-03053-00175

According to our friends in the US, Branson is a bit of a hotbed for some rather deceitful sales agents. It seems that one former sales manager was named in a lawsuit by Wyndham against The Transfer Group. He was working for Diamond at the time.

Another former sales agent was found to be working for an “exit” company named Mutual Release. This was not long after he had sold a Diamond member points with the promise of “making good money” by renting out his Diamond points, but as we found out some time ago this is not allowed via any 3rd party website.

But what makes this case more interesting are two of the named persons, Joseph Dickleman and Dan Chudy.

It turns out that Chudy was a former Branson sales manager and Dickleman a sales agent both with Diamond Resorts!

It also turns out that both had complaints made against them by consumers, which at first were ignored with the usual Diamond response “you signed the contract”. This dispute was later resolved.

According to our US friends, it is common knowledge that leave the company have “pirated” data, because Diamond points are not deeded, therefore that information is not readily available from any public records.

Well, we all know that sales staff keep records of all their own sales and clients, we also suspect that many will “download” further information from company records. Inside Timeshare has mentioned this on numerous occasions when answering the question “where did they get my information from as it was so detailed”!

The simple answer is it is their “insurance policy” in the case of being made redundant, don’t forget the vast majority of sales agents/reps are self-employed and paid on a commission-only basis.

Moving on now to The Newton Group, who were on the receiving end of Diamonds never-ending attacks on any “exit” company. It appears this company which has been running for 15 years has a very good reputation, with high ratings including an A+ from the BBB.

According to Diamonds complaint, The Newton Group used scare tactics in a letter about “unprecedented increases” in maintenance fees. Diamond claimed that the advertisement was “literally false”.

They petitioned the court to find a Newton Group mailshot which stated that timeshare owners “may be affected by new Timeshare Laws allowing developers to raise maintenance fees with no restriction” was false. According to Diamond, developers are not permitted to raise maintenance fees and that there are “no laws that allow maintenance fees to be raised without restriction”.

In response, The Newton Group produced evidence to the court which clearly showed that the law does indeed “permit developers such as Diamond Resorts to raise maintenance fees, and that certain maintenance fees may be raised without restriction, as evidenced by a publication made by Diamond Resorts itself wherein Diamond advises consumers that certain maintenance fees may be raised without limitation”.

They also produced evidence that Diamond does inform consumers of the following:

″[T]he only limit on any increase in Assessments for Collection Costs is the statutory general limit found in section 721.55(4)(h)2, Florida Statutes, which prohibits the total Assessments for Collection Costs from exceeding 125% of the total Assessments for the preceding fiscal year. This prohibition does not apply to the assessments levied by the Component Site Owners Associations.”

The judge agreed with The Newton Group and Diamond lost the case. The full story can be seen at the following link:

https://apnews.com/…/timeshares-lawsuits-crime-consumer…

In another publication, the BBB (Better Business Bureau) has warned the public about the practices of yet another “exit” company based in Springfield. This story can be read at the following link:

https://eu.news-leader.com/story/news/local/ozarks/2021/02/09/timeshare-exit-better-business-bureau-warns-relief-solutions-international/4439289001/

It certainly looks like the gloves are off in the US, with lawsuits between developers and “exit” companies being thrown about as if there was no tomorrow.

As we have said before, all the problems that owners/members have when it comes to ending any timeshare agreement begin with the developers themselves and their intransigent attitude to not allowing anyone to leave. Well, they will but they usually want huge sums of money to be paid to let you out, or you have to purchase another product with the promise it will end your contract in the next 2 years or whatever time scale they decide. Diamond is just one company who used this method in order to sell “fractional” in Europe, which in Spain is illegal as it is a points-based product.

Until the developers take steps to ensure that their sales agents and managers don’t lie, just to get the “sale” and allow an easy exit, then this problem will not go away. This can be seen by the number of “new exit” scams that are appearing not just in the US but also in Europe.

Inside Timeshare would like to thank our US friends for the information on this subject, we did not go into depth as the article is to show our European readers that their cousins over the pond are in the same situation.