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Diamond Resorts Advocacy Group

Is This Another Nightmare on Timeshare Street?

Just before publication Inside Timeshare received this news:

Nancy and Dan Callahan had been denied what they demanded until Inside Timeshare sent a draft of Nancy’s article to Diamond Resorts for comment. The company has since worked with the family to reach a positive outcome. The problem is, Inside Timeshare has received information from four other Platinum members voicing the same complaint as Nancy, from the same Las Vegas sales center, claiming they were told things like “people will be standing in line to buy your Legacy points” when not one member of the Licensed Timeshare Resale Broker Association will even list Diamond’s non-deeded points. All the respondents have credit scores in the 800 range and in the 60s or 70s, but considering foreclosure due to variations on Nancy’s theme.We have also heard from lessor loyalty level members and from other sales centers, especially in Virginia and Ka’anapali Hawaii where one side of the ocean will sell US Collection points while the other side claims the member should not have bought Hawaii points due to special assessments or the anticipation of rising maintenance fees. They are then instructed to buy more points to go from one side of the ocean to the other. As one former Diamond Resorts sales agent told Inside Timeshare, “It’s a Hamster Wheel.”

Nancy and Dan Callahan Share their Timeshare Experience

Why don’t corporations admit wrongdoing?

Grabbing hand

By Nancy Callahan

Without our Diamond Resort’s Advocacy Group, my husband Dan and I would not have known where to turn. Even though, as in our case, Diamond Resorts turned their back on us saying we lied and their sales agent at Polo Towers told the truth, we know where we stand and we know we are not alone.

I am 69 years old and my husband Dan is 67. We are both disabled and we both retired from civil service. Dan is a retired army Lt. Colonel and a combat Vietnam and Desert Storm veteran.  

We are Diamond Platinum members. We feel our most recent Diamond purchase was made under deceptive and extremely high pressure selling techniques. We had been struggling with two loan payments of $329 and $121 but the most recent purchase we did not even realize we made, will drive us into foreclosure.

Diamond sales agent Rick Casper in Las Vegas on January 22, 2017 sold us 50,000 Diamond points bringing our total number of points up to 106,000. Our new loan payment is $2,133 a month which we cannot pay.

We did not realize we made this $142,000 purchase until we returned home and checked our credit cards. Prior to this purchase we owned 56,000 Diamond points which cost approximately $101,000.  As I have had a double mastectomy, undergone cancer chemotherapy, radiation and have had two knee replacement surgeries, buying more vacation points was in no way our intention. Dan has had two minor strokes and a mild heart attack. He has chronic pain and is on 25 medications prescribed by the VA and our doctors. Dan also suffers from PTSD.

The $142,400 purchase price for the additional 50,000 points purchased from Rick Casper included:

  • $121,025 loan
  • $17,000 charged to a DRI Barclaycard
  • $4,375 charged to our Hilton VISA Card which is being disputed
  • $142,400 total plus our prior $101,000 purchase totals $243,000 in DRI points.

The current balance on the loan is $142,850 financed at 12.93% plus a monthly collection fee of $6.

Our credit score before this fiasco was 825. It has dropped 50 points since we disputed our Hilton VISA charge. We have received harassing calls for several weeks from Diamond.

We were not provided a truth and lending statement. The copy we have has has no signature or initials by a Diamond representative.

How in the world could anyone make a $142,000 purchase without their knowledge?

multi arm

It’s not as difficult as you might think.

We were invited to attend a presentation at Red Rock Casino in Las Vegas to learn about new and exciting ways to use our Diamond points. Rick was there when we showed up and said, “I thought you were supposed to come to Polo Towers and not Red Rock Casino in Vegas.” Rick had arranged a conference room for the day.

Rick said we should join the new “Legacy program” that allows members to sell blocks of Diamond points to a third party with all Diamond benefits intact. This was said just to us as Rick took us to a private presentation because we were Platinum members. The benefits Rick talked about involved selling Diamond points and those benefits could only be obtained if we became part of the Legacy Program. He said if we joined the Legacy program “people would be standing in line to buy our points.” One of the biggest complaints from members is that you can’t sell Diamond points. “You will have enough points to travel to even Dubai Paris and London,” Rick said. Rick said if we joined the Legacy Program we would receive as Platinum members 50,000 bonus points.

I was in terrible knee pain that day as I had not brought my pain killers with me. Rick provided me with two glasses of wine in a-Styrofoam cups with plastic lids because alcohol is not allowed at presentations.

Rick also talked about how using Diamond’s Barclay MasterCard to make purchases was a wonderful way to offset maintenance fees through purchase credits. We signed up for the Barclaycard for this purpose. Rick, however, used the card to charge $17,000 worth of Diamond points. He did not explain that, when the card is used to offset maintenance fees, the offset is only 1.5%.

Six hours went by and we had still not decided on the Legacy Program. As the hours wore on, my pain increased and I became more and more confused. I walk with a cane so it was an effort just to walk to the restroom and back as it was some distance. I was exhausted. Dan is diabetic and needed to eat so Rick ordered room service. Dan was confused due to diabetic symptoms. We were so overwhelmed by the time we were signing contracts, we did not even realize we were buying points. Rick kept saying we would be receiving 50,000 DRI bonus points.

When we returned home we were shocked to see the charges to our credit card. We were signing things just to get out of there thinking we were just joining the Legacy Program and opening the new Diamond Barclay Credit Card that would pay for our maintenance fees through purchase credits.

Diamond Resorts has a new Consumer Advocacy Department which “Promises to help Diamond owners with their membership from Day One!” Aaliah Moore, one of Diamond’s Consumer Advocacy “Hospitality” agents has denied that Rick Casper made any misrepresentations and determined we were aware of what had transacted. We have learned from our Advocacy Facebook, there have been numerous complaints filed against Polo Towers with at least four directed against this same sales agent. All the families are financially devastated.

We were told hardship surrenders are reviewed and considered on a case by case basis but we would be denied based on deception and misrepresentations. The amount of money we would lose is too much to walk away from just so Diamond can take back our points and resell them for full value.

We will be filing a complaint with the FBI at IC3.gov alleging Financial Institution Fraud under the FBI White Collar Crime division. As credit cards were charged, we will be filing with the Consumer Financial Protection Bureau.

We are notifying the timeshare lobby ARDA ROC that Diamond is violating ARDA’s Code of Ethics, the FTC because Diamond is one of the only major timeshare companies that cannot be listed with a member of the Licensed Timeshare Resale Broker Association due to restrictions the company places on the use of points bought second hand more restrictive than Diamond’s competitors.

We would have never agreed to buy 50,000 points. We were struggling with the two loans we already had outstanding with Diamond and our home mortgage as we bought at the height of Las Vegas real estate and are underwater on our home mortgage. We sent Aaliah a spread sheet explaining our situation thinking she would realize it was obvious we would never buy $141,000 worth of vacation points given our medical condition, medical bills and home mortgage! We would have cancelled the contract immediately if we had known.  

The maintenance fees due on the new points are $6,830 in addition to the existing $9,554 or so paid for 2017 maintenance fees which we prepay each month on a credit card.

At prior presentations other deceptive tactics were used. We were told we had to buy Hawaii points in order to get availability on Maui. Then at the next presentation on the US mainland on March 1, 2014 we were told we should not have bought Hawaii points because it is dangerous to own Hawaii points due to special assessments at Diamond’s Poipu property.  We were told we had to transfer back to Diamond US Collection points. They said Hawaii point owners were charged a onetime fee of $9,000 for Poipu assessments. We had to purchase additional points to bring the Hawaii points back to the US Collection to get out of the Hawaii Collection.

Another reason we would not have purchased more points is because we have not been happy with the points we owned before this new purchase.

There have been many resort properties that we have never been able to make a reservation for. When we are able to book a reservation, these presenters wear us down with their high pressure tactics. When we say no to one salesman, another one appears with an even harder pitch. We check into Diamond properties with a sense of foreboding.   

We have notified the National Timeshare Owners Association that they need to warn existing owners about the harm Diamond Resorts is doing to many of their members.

The Arizona Attorney General’s officeAssurance of Discontinuance

https://www.azag.gov/press-release/attorney-general-brnovich-announces-800000-settlement-diamond-resorts

A billion dollar class action Albright Stoddard Warnick & Albright in Nevada

http://insidetimeshare.com/1billion-law-suit-diamond-resorts-international/

A Diamond Advocacy member sponsored Facebook

We seek to provide Diamond Resort members 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.

https://www.facebook.com/groups/DiamondResortsOwnersAdvocacy/

https://www.facebook.com/timeshareadvocategroup/

advocate 1

At least in this case Diamond has reached out to this couple, and come to a positive outcome. Although there is still a long way to go before we no longer have stories like this coming in, it does seem as if Diamond are starting to take notice of these complaints, they are too similar to be isolated incidents.

Inside Timeshare welcomes any dialogue with the industry if it improves thing for the better, but it is your experiences that will make them look again at how they operate. If you have an experience, good or bad, you would like to share contact Inside Timeshare or one of the advocacy groups that we work with.

 

Part II: The Three Rs of Timeshare

After we published Fridays article, news came in from Canarian Legal Alliance, of four more sentences at the Court of First Instance in Arona, Tenerife. These were once again against Silverpoint, again this lower court applied the previous rulings made by the Supreme Court in Madrid.

In one case the court ordered the return of 85,000€ plus legal fees and legal interest, the client’s contract was again declared null and void. In another two sentences the clients were awarded with the return of over 25,000€ plus legal interest, with the contracts declared null and void. A rather expensive end to the week for Silverpoint, with no sign of these cases letting up.

The week also started on a bad note for Anfi with CLA announcing another sentence issued by the Court of First Instance in Maspalomas. Once again this lower court ruled as per the precedent set by the Supreme Court that contracts over 50 years were illegal, therefore the contracts have been declared null and void.

Court Masp
Court of First Instance Maspalomas

The clients in this case have been returned with over 14,000€ plus legal interest. They are now timeshare free and are no longer bound by the rising maintenance costs. So what a start to the week for those lawyers at CLA.

So, on with today’s writings by Irene Parker, in this article she explores the three R’s, Resolution, Relinquishment and Refund.

In Spain one of the three R’s is hitting the industry, as we have seen from the opening of today’s article, many owners are receiving back their full purchase price and some, purely because the timeshare companies have sold a product that does not comply with Spanish Timeshare Law or the Directives issued by the EU.

For those who do not have a claim, the other option is relinquishment also known as surrender, unfortunately this does depend on who you own with, some are easier than others. One company that is renowned for not playing ball is MacDonald Resorts, there have over the years been many articles written and published about how they make it very difficult for anyone to get out of their contract. They say they allow a limited number out every two years upon payment of 4 years maintenance fees, this is done on a first come first served basis, so no guarantee.

Some resorts, especially the smaller independent and usually family owned resorts, just allow owners to hand back, in some cases they will even pay back something. This obviously is good for both parties, the member is released and the resort has inventory to sell. Win Win!

Part II: The Three Rs of Timeshare

Resolution, Relinquishment or Refund

Part I of the 3Rs or F of Timeshare

Part III – Two More Rs – Rental and Resale

http://insidetimeshare.com/3-rs-timeshare-part-1/

travel lights

By Irene Parker

April 12, 2017

Most consumers are unaware of the perpetual nature of a timeshare contract. The combination of rising maintenance fees and a mortgage interest rate ranging from 12% to 18% if a loan is attached can spell disaster when the timeshare member can no longer afford the timeshare due to illness, unemployment or age.

We hear a lot about the elderly being targeted, but our advocates have also heard from the young. So far the youngest person I have interviewed was 19 and pregnant when she signed her contract just after midnight. When I explained what a perpetual contract meant, she was shocked.

“A perpetual contract in itself is not harmful,” explained timeshare attorney Mike Finn of the Finn Law Group. When you buy a house or car the contract is perpetual. The problem comes when there is no secondary market as Mike explains in his article, “The Unconscionable Suppression of the Timeshare Resale Market”.

http://www.finnlawgroup.com/learning-center/the-unconscionable-suppression-of-the-timeshare-resale-market

The First R: Relinquishment

Timeshare developers and the timeshare lobby ARDA seem to think voluntary exit programs are the answer. How does this help the family who has spent $25,000 to over $100,000 to purchase a timeshare, only to get hit with a life event that results in not being able to afford the timeshare shortly after purchase? Would you buy a house that could not be sold? The price of a timeshare can easily rival the cost of a modest condo or home.

Howard Nusbaum, CEO of ARDA is quoted in a June 2014 RedWeek article in reference to the lack of a viable resale market, “This is a legacy problem. People buying a timeshare today are buying it from multisite clubs that have management forever and sales teams forever, so the ability to recycle inventory will not be a problem in the future.”  Recycling inventory is the term used when a resort “takes back” your points or forecloses due to nonpayment of a loan or maintenance fees.

Timeshare companies are starting to offer voluntary surrender programs, but surrenders are evaluated on a case by case basis. The money invested in a timeshare can easily run over six figures, so walking away from that kind of money without a fight, when you feel you have been defrauded, doesn’t seem right.

The Second R: Refund

A refund is not easy to come by. Litigation takes years and if you win, there will in all likelihood be an appeal. Timeshare developers know the industry is virtually unregulated and that they are protected by the oral representation clause.

Let’s examine the most common complaints our advocacy group has heard to determine if these tactics meet the FBI’s definition of white collar crime.

Reportedly coined in 1939, the term white-collar crime is now synonymous with the full range of frauds committed by business and government professionals. These crimes are characterized by deceit, concealment, or violation of trust and are not dependent on the application or threat of physical force or violence. The motivation behind these crimes is financial—to obtain or avoid losing money, property, or services or to secure a personal or business advantage.

These are not victimless crimes. A single scam can destroy a company, devastate families by wiping out their life savings, or cost investors billions of dollars (or even all three).

https://www.fbi.gov/investigate/white-collar-crime

The most common complaints:

  • The agent said I could sell my shares,
  • Maintenance fees increase only modestly,
  • You can get airline and other travel awards but the value is zilch,
  • It’s less expensive to book online than to use my points,
  • The contract is perpetual? Who knew?
  • The interest rate is 18%!! I didn’t know till I started paying!

According to the FBI, there is corporate fraud and mortgage fraud. Corporate fraud includes accounting schemes designed to deceive investors about the true financial condition of a business entity by manipulating financial data, share price or other valuation methods.

While the definition above is most often applied to stock transactions, we can draw some comparisons to a timeshare point. Availability of accommodations, the value of travel awards can be overstated and the escalation of maintenance fees can be understated.

Mortgage fraud is a subcategory of financial institution fraud known as “fraud for profit”:

Fraud for profit: Those who commit this type of mortgage fraud are often industry insiders using their specialized knowledge or authority to commit or facilitate the fraud. Current investigations and widespread reporting indicate a high percentage of mortgage fraud involves collusion by industry insiders, such as bank officers, appraisers, mortgage brokers, attorneys, loan originators, and other professionals engaged in the industry. Fraud for profit aims not to secure housing, but rather to misuse the mortgage lending process to steal cash and equity from lenders or homeowners. The FBI prioritizes fraud for profit cases.

The backend of timeshare fraud has been widely reported, but there has been little attention paid to the front end. The industry needs to stop focusing only on the backend of timeshare scams as detailed in this US Department of Justice Timeshare Scam Report and take a closer look at the front end – the timeshare sales presentation.

https://search.justice.gov/search?query=timeshare+scam+report&op=Search&affiliate=justice

Timeshare members who begin their complaint with “the salesman said” are sadly told about the oral representation clause contained in a timeshare contract.

 Wyndham has appealed Trish William’s $20 million Whistleblower award.

In 2010, the plaintiff, Williams, reported that elderly customers were being defrauded by Wyndham salespeople, who were opening and maxing out credit cards without their knowledge and lying about reducing interest rates, maintenance fees and the ability to obtain rental income from their timeshares. She also disclosed an illegal, industry-wide practice of falsely representing that if owners spend enough money, often hundreds of thousands of dollars, Wyndham would buy back the timeshare at full value at the owner’s request.

Evidence presented at trial revealed that Wyndham employees engaged in “pitching heat,” high pressure sales tactics involving deliberate lies and misrepresentations to get people to buy more timeshare “points.” These sales practices included “TAFT” days, which stands for “Tell Them Any [email protected]#*ing Thing” days, where employees were encouraged to say anything to make a sale as long as they didn’t put it in writing. The highest selling sales agent was quoted as saying, “I sold my soul to the devil. I can say whatever I want so long as I don’t put it in writing, that’s why Wyndham has good lawyers.”

https://dolanlawfirm.com/2016/11/wyndham-vacation-whistleblower-verdict/

R3: Resolution

hope

Diamond Resorts has instituted a new consumer advocacy department to help members or owners resolve disputes. A member sponsored Diamond Resorts Advocacy Group works with members and Diamond’s advocacy department to resolve issues. There is always the possibility the member just doesn’t know how to use the booking system. Blanket statements like “You can always book online cheaper than using Diamond points” are not accurate. My husband and I are Diamond owners. We just booked two weeks in Sedona for far less using our points than we could have by booking online.

We wish all complaints could be resolved by better understanding the resort’s program, but that is not always the case.

Our complaint format is included in this Inside Timeshare article. Inside Timeshare readers can use this form when contacting Inside Timeshare or their resort when problems arise. Of course there are many who use and enjoy their timeshare year after year. Those owners don’t need us, yet.

http://insidetimeshare.com/friday-post-look-past-week/

Our Diamond Resort Advocacy Group:

We seek to provide Diamond Resort members 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.

https://www.facebook.com/groups/DiamondResortsOwnersAdvocacy/

Let’s keep working together to improve the industry.

Inside Timeshare is here to listen and respond.

fix prob

Related story

http://insidetimeshare.com/?s=hoa+collections

Inside Timeshare would like to thank all those who help to make these articles, especially Mike Finn of Finn Law Group, who helps Irene with the legal aspect of her writing.

If you have any questions or comments on any article published, contact Inside Timeshare and we will try find you the best answer or solution. You can also join our facebook pages and join the discussions. It is through these that we all find out what is going on.