Welcome to the start of another week with Inside Timeshare, last week we published the story of Silverpoint and the news that the court-appointed administrator has completed his review of the liquidations. For Silverpoint and the past management team this was not good news, it now clearly leaves the door open for possible criminal charges to be brought. Unfortunately, we have heard from many readers on the proliferation of cold calls regarding not just Silverpoint but also Azure in Malta.
The nature of these calls is to entice owners into parting with huge sums of cash in order to make a claim against Silverpoint or Azure. As usual, the caller states that they will get the owner out of their contract with a termination and then make a claim, the only problem here is who are they going to sue?
Both these companies along with many others of The Limora Group are in the process of being liquidated, the major law firms involved in current cases are no longer taking on any new cases because of this. It is also a fact that very few cases have ever been through the Maltese Courts against Azure, the main reason for this has been the problem of jurisdiction. This is a problem we have seen with other companies, such as the jurisdictional arguments of Diamond Resorts and Club la Costa.
As we have seen in the past, any news will be used and twisted by the unscrupulous in order to get you to part with your cash, all on the promise of receiving back your full purchase price, from a company that is liquidating. So unless you already have a case in court with a genuine law firm your case will never get to court with any of these callers.
Moving on now to our old friends at Anfi, last week was not a very good one for them, losing at every turn. Not only have they lost in the Court of First Instance, they are also losing every appeal they lodge with the High Court.
In total the courts ordered Anfi to repay clients over 150,000€ in just a few days, this is without all the other payments Anfi will be liable for, such as legal interest and the repayment of clients’ legal costs. Then there are also Anfi’s own legal costs, paying their lawyers, and also the costs of lodging the appeals with the courts.
This does make you wonder what they are playing at, they lose every case in the First Instance, appeal to the High Court, and then lose those appeals, it really does not make any sense whatsoever. Could it be that the management at Anfi are just plain stupid or are they being duped by their own lawyers with dubious appeals?
That is one question we are unable to answer, what we do know is that all of this is a blatant attempt to delay paying clients what is rightfully theirs. In the end, it will not bode well for Anfi and the management team, especially with the Provincial Prosecutors Office making criminal investigations into the movement of funds between accounts, exactly the same as Silverpoint did. As they say, watch this space.
That is all for today, if you have any questions or comments on this or any other article, please use our contact page and Inside Timeshare will get back to you.
Welcome to this week’s Letter from America with a new contributor Bogdan Matiu a Hilton Grand Vacation member, with the introduction by Irene Parker. This article follows on from the previous articles where members argue that blaming the victims and calling them “gullible” rather than blaming the sales agents for their deceit has incensed many of these disgruntled members.
Why I Should Not be Called Gullible!
AARP Staff writer Doug Shadel, and Vern Thornton, founder of Seniors Vs Crime, a Special Project of the Office of the Florida Attorney General, explain in their books, Outsmarting the Scam Artists andNot Today Buster! why the victim, in our case, the consumer, should not be blamed.
By Bogdan Matiu
Introduction by Irene Parker
Hilton Grand Vacation buyer Bogdan Matiu launched a Facebook after learning the one-week deeded timeshare he purchased in 2018 for 15,000USD is worth at most 2,000USD on resale. Bogdan’s argument is that anyone familiar with traditional real estate would liken buying a timeshare to a home purchase, whereby the buyer expects their investment to appreciate in value or at least remain stable.
On the other hand, a timeshare industry lobbyist made this statement:
“Their value comes from using it,” the timeshare industry’s top lobbyist told ConsumerAffairs in January, admitting that points have no resale value while claiming that consumers don’t mind this because the value comes from the experience.
I understand the industry lobbyist’s position in that the Ozark timeshare my husband and I purchased in 1984 for 6,000USD, which we used or exchanged all over the world for over 30 years, didn’t need to provide a resale value when we voluntarily deeded our week back in 2019.
While I have been a critique of Diamond Resorts for other reasons, product value is not one of them. I amortized our initial purchase price over a period from 2012 to 2015 to compare booking online to using Diamond points. During that period we stayed 181 nights. Utilizing 50% discounts by booking 59 days or less, and traveling slightly off-season, I calculated the average cost to stay in a one or two-bedroom Diamond property was 53.37USD per night which fared better than online prices. We came out ahead.
However, your grandmother’s timeshare is a far different product than the product that exists today in that today’s timeshare is owned mostly by Wall Street investors. Their mission is to maximize Shareholder value.
According to the lawsuit, Chief Operating Officer Geoffrey Richards toldSapien in a conference call the company had reversed more than $300 million in contracts in order to “insulate” the stock price by making the company’s default rate — the rate at which customers default on their mortgages — look more in line with competitors.Orlando Sentinel, May 13, 2021
Some annual reports even list a viable secondary market as a risk to investors. Can you imagine Pulte or another homebuilder making such a statement about the primary housing market?
It is a very dangerous precedent that the Timeshare Industry wants to create in the mindset of the community – their notion that the customer is always wrong and the timeshare developer and their sales agents are always right.
Developers sell a contract in perpetuity after a presentation that can last from two to eleven hours. After having driver’s licenses and a credit card confiscated, the buyer is pitted against a tag-team of two or more sales agents who demand the purchase be made the same day.
I will start with an old truth: “Don’t look into your neighbor’s bowl.” For people who are involved and responsible with offering a timeshare product, it is offensive to consider gullible their own consumers. These developers have created the timeshare offering and the question they should ask themselves in earnest is – why are there so many purchasers who did not understand the product?
The “non-reliance” clause is used to relieve timeshare sales agents from any responsibility for making false claims. Why is the service sold via “oral presentations” if at the same time it is mentioned in the contract that the buyer should not rely on oral representations? In what way is this protecting the consumer? If developers trust their product value and believe their sales agents are honest, then why deny responsibility for the oral presentation?
The timeshare industry lobby ARDA has a Code of Ethics. I raise the following question: If the oral presentation is an important cause of the buying of a timeshare, and this cause is under ARDA control, why are timeshare sales agents not held accountable when sales agents mislead the consumer? One need only review the millions of dollars in Attorney General settlements in America, online complaints, and thousands of people calling exit companies every day, to acknowledge deceptive sales.
It is not a matter of gullible customers. It is a matter of ethical sales behavior to accept that if the sales agents didn’t provide proper disclosure, the contract should be deemed invalid. If someone from ARDA has the lack of respect to call us gullible, permit me to say that my opinion is that ARDA members, who consciously designed a product that becomes an immediate liability to the buyer, are gullible to believe sales agents who say they didn’t deceive. PERIOD
ARDA members, responsible to promote timeshare products, should ask themselves: What is so complex to not be understood? How many products in the market require hours of hard-sell, even confiscating driver licenses and credit cards. The developers should consider their failure to design the product properly. Timeshare is a one-in-a-million product that requires bribing the consumer to listen to a presentation! The result is sales and marketing costs representing 50% or more of the sales price. As reported by Seeking Alpha,
If, on average, 50% of the sales price is absorbed by marketing and sales costs and a large portion of current sales are to existing owners that would indicate that the average cost to market and sell to new owners would be pushing well above 50%.
Why is this necessary if the product is so great? We the consumers are educated and make hundreds of good buying decisions without someone having to bribe us to make a purchase. Many of us have experienced deceptive practices. We are not gullible. It is the product that is flawed and the way it is packaged is unnecessarily confusing and prone to deceptive sales tactics.
I stayed often at Hilton hotels as a Hilton Honors member. I was asked to attend a marketing presentation. I had no idea it was Hilton Grand Vacations, a completely separate entity. This in itself was deceptive.
For me, there is no “use value” or “fond memory value” for a product that I bought for 15,999USD that has an immediate resale value of at most 2,000USD. This initial purchase, bought from a business that misled me to buy at eight times the resale value, is not of VALUE to me. It is an immediate LOSS that comes attached with a LIABILITY as agents insist that I must buy more POINTS to achieve value.
As far as the vacation memory value, I have to pay AFTERWARDS through maintenance fees. I could go to many of the same locations without paying my initial 15,999USDs. To make an analogy, how many consumers would pay 15,000USD upfront to Bookings.com just to have the right to use their site? This is at best what the timeshare industry is doing. There is simply no cost to use a website to make vacation destinations. Therefore, associating tens of thousands of dollars with this “service” is questionable.
I think the Timeshare Industry relies on the following essential facts that fundamentally shape the interaction between the customer and the timeshare industry in a deceptive and unfair way:
1. The direct purchase from the Timeshare Provider has no relationship to market value as the purchase price is 8 to 10 times more than the resale value.
2. The Timeshare Provider offers a loan at 12% to 19% that allows the customer to acquire the timeshare immediately. There is a transfer of responsibility and purpose from the timeshare client to a debtor-creditor relationship.
By combining 1 and 2, the customer is chained to a debtor-creditor lien into a contract that, unlike a car or a house, he or she cannot easily sell.
3. I did not have access to the service until after the contract cancellation period. This made our timeshare contract not a contract – but a deceptive bondage.”
4. Every “point” purchased will be supported through maintenance fees. Therefore, the first transaction, called “Timeshare Ownership,” is in reality just a “WEAPONIZED CONTRACT TO SELL POINTS AT THE SELLERS PRICE IN PERPETUITY WITHOUT A RESALE MARKET.”
Timeshare Sellers say, “There is vacation value in points and you are mistaken if you say otherwise!” Yes, there is a vacation memory value, but ourpoint is that the CONTRACT MANDATES we buy points at your set price without a viable secondary market making the purchase a LIABILITY. Complaints about limited availability are always answered with, “Buy more points!”
My position is supported by David Palmer, the former CEO of Diamond Resorts when he described maintenance fees to investors in 2014, per the Times article:
“Anything that is put in the budget that gets expended on an annual basis, we get our 15 percent fee,” Mr. Palmer explained to investors at a September 2014 conference, according to a transcript. “That is basically a 100 percent profit business.”
This raises the valid point: What do they really sell? The developer controls both the points and the maintenance fees. The pretense of “respectability” by timeshare developers and their representatives to keep their customers in a bondage relationship I respond to with vehemence and sarcasm.
I proposed that “owners” picket various sales centers on a regular basis with fliers stating the facts. Unfortunately, most timeshare buyers don’t live near sales centers so such a strategy is difficult to coordinate. What one can do, however, is hand out a flyer to those awaiting presentations if you are at a sales center. We have such a flyer in our Facebook Files. Inform and educate the timeshare consumer.
Timeshare Developers should welcome our efforts. If they really want buyers to know about the oral representation clause, then help us educate the public.
Related article recommending timeshare stocks:
In this article we are going to look at another set of evil companies that use high pressure sales tactics to trick consumers into signing complex long-term contracts that they don’t understand: timeshare marketing companies.
Welcome to this week’s Letter from America. Over the years Inside Timeshare has been running this series of articles. We have heard from so many elderly people, veterans, and serving military personnel, all have told similar stories. These revolve around the lies and untruths members allege are told by sales agents employed by Diamond and other developers to sell their product. The initial response to complaints has always been the same, “We are not responsible for what the sales agents say” and “you signed the contract”.
Today’s article was not going to be published, but due to comments made on various social media platforms which Inside Timeshare posts, it was decided that this Open Letter was the only reply. It was one comment made by the Timeshare Crusader which really did spark this change, in the comment Lisa, who we do have a great deal of respect for, calling consumers “gullible”. Considering the horror stories we have published we felt this had to be addressed. Over-reliance on the oral representation sentence, buried in a lengthy contract, implies the consumer is at fault. Only a biased observer will hold deceptive agents blameless.
ARDA has never appeared to address this issue, and as a reminder about oral representations, we do believe that it is too little too late, a case of “closing the stable door after the horse has bolted”. They also do not go far enough to protect consumers from their ARDA members or sanction them when they allow sales agents to say what they like.
An Open Letter to ARDA and Timeshare Crusader Explaining Why the Victim should not be Blamed
Beth in Arkansas, on behalf of younger people buying timeshares,
Tiffany, on behalf of her elderly parents,
Adam, on behalf of veterans and active-duty military,
Bernadette, on behalf of those experiencing serious medical conditions,
A timeshare member from 2017 who holds a security clearance
May 7, 2021
If you are considering buying a timeshare for the first time or you are an owner thinking about adding to your vacation ownership portfolio, ARDA-ROC and the Timeshare Crusader recommend that you consider, at a minimum, the following:
If ARDA and Timeshare Crusader would take the time to read our articles, they would learn why the victim should not be blamed. We are disappointed, but not surprised, that neither organization holds deceptive timeshare sales agents and managers accountable. On a short vacation, if promised the ability to sell points, rent points, access “equity” or refinance, no one is going to attempt to do that while on vacation. The rescission period is easily dodged. It is easy for those who have not experienced a predatory timeshare experience to judge.
AARP staff writer Doug Shadel explains in his book“Outsmarting the Scam Artists” why the victim should not be blamed. An excerpt from the chapter entitled Ether:
This inability to fully grasp how emotion or “affect” influences our decision-making is crucial to understanding why fraud occurs… Even victims who are interviewed after the fact, criticize themselves….This is because they are no longer inside the situation – no longer having their emotions manipulated and vulnerabilities exposed. The ether has worn off.
ARDA and Timeshare Crusader talk about how financing a timeshare is like financing a house. No, it’s not. Home mortgage rates in the U.S. are at 2.882%. Timeshares are financed at 12% to 19%. If a Barclay credit card is used, the interest rate after the grace period is over 20%. If you buy a house but then decide you don’t like the house, you can sell it. Timeshares are virtually worthless.
Tiffany: My elderly parents were deceived in 2019. The security clearance holder who shares her similar experience below is not a senior, yet she fell for the same pitch that my parents fell for – you have to give up your deed and buy points. My parent’s “QA” agent kept them for 11 hours. My mother called me during the ordeal. I told her to leave. She said she couldn’t because they had their credit card and driver’s license. They attended because they were told if they didn’t attend, they would be charged for their stay. They were browbeaten into giving up the Gold Key deeds they had owned for years. There was nothing in the contract that would have addressed this falsehood, and after 11 hours without food, water, or necessary medication, they were defeated. Diamond’s response was they sounded just fine on the recorded “QA” closing. They lost the two Gold Key deeds that they had for years, and over $30,000 after being told they had to give up their deed and buy points. The full story:
I worked as a Covid nurse during the height of the pandemic. My parents gave me 10,000 Liki Tiki points. At a presentation I attended in Tennessee, I was told I had to give the points up because they were so limited. The agent said I could get 5,000 additional points for $4,500. It wasn’t until later I learned I had a $45,000 loan. That’s more than my student loans. I would have never bought the points. Diamond Resorts blamed me. They said on the recorded closing I was informed of the total purchase price. I certainly did not hear that because I would have never signed. I wanted to listen to the recording but they said I could only do so by subpoena. They only provided a transcript in which the QA agent stated the purchase price. I have to trust that the transcript is accurate. I learned that to listen to the recorded closing, I had to get an attorney to send a subpoena, but to send a subpoena, you have to file an arbitration case. I’m 24 years old. It’s too much. I have no choice but to default. My mother is horrified. She thought giving me her Diamond points was a good thing.
A November 30, 2018 article by a Diamond member with a security clearance:
Timeshare sales can pose a national security risk. For those of us with security clearances, our careers could be in jeopardy if we believe a timeshare sales agent and find ourselves forced to default on a timeshare loan. Since the timeshare sales agent knows they will suffer no negative consequences, if deceptive tactics are employed, they are given the green light to sell by any means, knowing the consumer will be blamed.
Diamond should want the public to know this.
At a December 17, 2017 meeting, we asked Davia H about selling our deeded Sunterra timeshare. We had no loan and had tried unsuccessfully to sell it. Davia said there was no way to sell our Sunterra timeshare because we did not have “Full Club Member” benefits. She encouraged us to become “Full Club Members” so we could easier sell the timeshare. Davia said our Sunterra timeshare was worthless. We needed to upgrade to “Full Club Member” benefits to receive “benefits that would increase the value of the timeshare to make it worth buying.” We feel not informing us that timeshare points are worthless was a material omission.
She used asymmetric information. This is where one party has more or better information than the other.
Davia advised us to wait six months before trying to sell (to avoid the rescission period) because the value of the timeshare would increase. She said she knew someone who helps people sell their timeshares and could give us her contact’s information. Repeated calls and texts to Davia went unanswered.
Diamond used the recording of the Quality Assurance signing session against us. Why would we ask the question of the ability to make money or sell points if we didn’t know Diamond points were worthless? The recording of the QA was reported in a Diamond CLARITY press release to be for the purpose of enhanced training. In my opinion, the recorded closing is used as an entrapment.
I signed Bernadette’s petition. We are proof that if you do call Diamond, you will be told, “Sorry, you didn’t bring it up on the recorded closing.” I sent our complaint to this list of contacts found on our advocacy Facebook page. They didn’t care.