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Federal Trade Commission

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: Timeshare Foreclosure

Welcome to this week’s edition of Letter from America, this week Irene Parker answers a question asked by many consumers when it comes down to loans/mortgages for the purchase of timeshare. This is very much a problem for our US readers as in Europe and especially in the UK all loan agreements are considered personal loans to purchase a product, any default on the loan agreement is a civil matter and is dealt with by the County Courts. The courts can order the repayment or send in the bailiffs to seize personal property to the value of the loan. The timeshare will not be seized as the loan is not collateralised by the timeshare, after all, it is worthless.

There are not many figures available on County Court Judgements made for defaults on these loans, mainly because they are listed as personal debts not attached to anything but a debt to the lender. For instance, you may have taken out a loan for home improvements, this is treated exactly the same as a loan for timeshare. It should also be pointed out that a County Court Judgement commonly known as a CCJ destroys any credit rating and will prevent you from getting any further finance. Now, considering the average age of timeshare purchasers, they are of a generation that will pay off these defaults as a debt is a debt and to receive a CCJ is out of the question. It should also be pointed out that even if consumers receive a CCJ, they are unlikely to advertise the fact on these timeshare forums, after all, it could be very embarrassing.

Is a Timeshare Foreclosure an Installment Loan Foreclosure or a Mortgage Foreclosure? 

See the source image

Is a Timeshare Foreclosure Considered Mortgage Foreclosure? 

https://gustancho.com/timeshare-foreclosure-considered-mortgage-foreclosure

On the credit report yes, but not with mortgage lenders:  Per HUD mortgage lending guidelines, a timeshare is not treated as a regular foreclosure and is treated as consumer debt. 

The U.S. Department of Housing and Urban Development (HUD), the parent of FHA) classifies timeshare mortgages as installment loans and not real estate loans.

By Irene Parker

July 23, 2021

Over the past year, there have been six disturbing reports that indicate timeshare developers are becoming more aggressive in pursuing members who default on loans. If the reports listed below obtained from credible sources are accurate, timeshare buyers should NEVER finance a timeshare, and timeshare attorneys will be provided substantial job security. If you get sued, you need an attorney. There is nothing to prevent a timeshare company from suing a member, but it is more difficult to collect on a timeshare judgment as the loan is not collateralized with anything but the timeshare.

Last week on TIMESHARE TALKS Jessica Burke of Virginia Beach Timeshare Rentals discussed the benefits of renting timeshares. Renting avoids the initial outlay, and more importantly, gives the consumer time to evaluate different timeshares so as to make an informed decision as to which timeshare might be right for their family. Host John Raymond is a licensed timeshare broker and founder of Resort Reseller. Timeshares can be purchased on the secondary market for a fraction of the cost.  

https://tarda.org/f/should-i-buy-a-timeshare-or-rent-one

The lead spokesperson for ARDA-ROC, the timeshare industry lobby’s consumer advocacy arm, encouraged judicial foreclosure in about-face quotes:

“The best thing we can do with exit (is) judicial foreclosure, ruin the credit and enforce the contract,” said Ken McKelvey, chair of the American Resort Development Association-Resort Owners Coalition, according to letterhead minutes of the April 10, 2019 ARDA-ROC meeting.  (Contacted about the meeting notes, ARDA did not dispute their authenticity but said that in the minutes, McKelvey’s quotes were taken out of context.)

At a 2019 Florida legislative workshop I attended, Mr. McKelvey testified:  

“Most of the developers I know and certainly most of the timeshare managers I know, and I managed timeshare properties for thirty years… every single resort had a dissolution policy, every single one (one). There was a way to get out. You had to come to your management company, and based on what the board of directors instructed us to do in the terms if they had to pay a fee or if they had to be current, whatever those situations were, we did not have a one that did not have a dissolution policy and a hardship policy….” 

Timeshare members donate $5 to $10 per contract to ARDA-ROC in mostly “opt-out” donations. These donations are not as voluntary as they sound. When I asked that the $7 not be charged to my credit card along with my maintenance fees, it was charged anyway. When I called to ask that the $7 be removed, I was told they had to fill out an internal form to do so. That was back in January. Another member recently reported they had to call three times to have the $7 removed. Collectively, ARDA-ROC raises approximately $5 million a year from members.  

Following are five additional disturbing reports:

  1. One developer’s contract used to specifically state that they do not pursue summary judgments. That language has been removed.
  2. Eric Olsen, an attorney of 42 years, was quoted in Kiplinger, to the ire of timeshare developers, when asked what happens when someone stops paying: “I ran this often-asked question by Salem, Ore.-based attorney Eric Olsen, founder of HELPS, a national nonprofit law firm that helps lower-income seniors with debt they can’t afford to pay. Olsen concluded our interview by urging readers to, “Consider walking away from the timeshare, as they generally have no value. Stop paying and ignore their communications.   It will eventually get foreclosed and owing any deficiency is highly unlikely.” Kiplinger, April 26, 2021  
  3. Westgate’s VP of Mortgage Services stated in recent court documents that Westgate “probably” has a 30% default rate. Westgate’s lenders can’t be happy with that high default rate. Other developers have default rates that exceed 20%.
  4. Hilton Grand Vacations and Orange Lake/Holiday Inn have sued members defaulting on loans, according to one exit provider.
  5. Another source reported an upsurge in attorney hiring.    

What does this mean to timeshare members and owners?

According to HomeGuidesSF:

The company may sue you in civil court to obtain a judgment. If the judge issues a judgment against you, the management company may garnish your wages or levy your bank account to get the money you owe.

Deeded timeshare owners face a different dilemma. If you stop paying on your timeshare loan, you face foreclosure. Foreclosure is the process whereby the lender files to take possession of the property and sell it at auction to recover the money you owe. There are two main types of foreclosure: judicial and non-judicial foreclosure. In a judicial foreclosure, the lender files a foreclosure lawsuit and takes you to court. The judge may issue a deficiency judgment for the remaining balance due after the auction. A non-judicial foreclosure is basically a paperwork shuffle. Your contract authorizes the trustee to sell the timeshare in the event you stop paying on it. You receive the official Notice of Default and the Notice of Sale. In California, the majority of foreclosures are non-judicial foreclosures where the lender cannot receive a deficiency judgment after the sale of the property.

https://homeguides.sfgate.com/can-sued-not-paying-timeshare-51679.html

Yahoo Finance reporter Abigail Fisher recommends timeshare stocks because consumers are tricked into signing contracts they can’t get out of: 

Best Stocks to Buy According to Hedge Funds

We find evil companies to be a very rewarding hunting ground to uncover long-term stock winners. In our opinion companies like Philip Morris (PM), Facebook (FB), Apple Inc. (AAPL), Alphabet (GOOGLE) are evil companies that delivered 1000% or more gains to their investors.

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. Check out this Reddit post where the user is asking several questions about Wyndham timeshare cancellation. This person was able to cancel and receive a full refund, but many consumers don’t cancel within the 7-day or 10-day window specified in their contracts.

https://finance.yahoo.com/news/best-timeshare-stock-buy-according-135051667.html

How would this reporter feel if the buyer tricked, was her grandmother? Tiffany’s parents were kept for 11 hours, their IDs withheld. They lost their two deeds they had since 1998, and $34,000. They were told that if they didn’t convert their deed to points, maintenance fees would increase from their current fees of $2,000 to $6,000. The transaction resulted in maintenance fees of $6,000 which they could not afford. Tiffany’s interview: 

https://tarda.org/f/how-giving-up-deeded-timeshares-turned-into-tragedy

Many timeshare members and owners, who report unfair or deceptive sales and marketing practices, are senior citizens in their 60s, 70s, some in their 80s and 90s. They have maintained lifelong high credit scores, but are faced with little choice but to default on a timeshare loan if the resort dismisses their complaint because they signed a contract. There is little to no secondary market. Coupled with interest rates ranging from 12% to 20% (higher if credit card financing), a timeshare can become a financial nightmare. About a third of those reaching out are younger. The youngest was 19 and pregnant when she signed a perpetual timeshare contract at midnight – after a six-hour presentation.

Timeshare members can negotiate directly with their resort to resolve a dispute, but expect to be challenged with: 

  • You signed a contract,
  • Your allegations are unsubstantiated, 
  • We are not responsible for what our sales agents say,
  • You didn’t question this on the recorded closing (because you believed the sales agent or were coached on what to say or not say). 

How can this posturing and ongoing war between developers and those providing exit services be healthy for the timeshare industry? 

People, members of the media, and even the Federal Trade Commission have started addressing why thousands of members reach seeking release from an unwanted timeshare. The FTC lists Timeshare Sales at #7 on their current Top Ten Scam list and Timeshare Resales (fake buyers) #10.

Related Articles: FTC:  Timeshares: Yes? No? Maybe?

https://salinapost.com/posts/5de93b95-4ba0-4acb-8527-80dd7effccaf

Top Ten Scams

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

Senior Defaults

https://www.linkedin.com/pulse/senior-timeshare-defaults-irene-parker/

HOAs Benefit from Onsite and Offsite Timeshare Resale Programs

https://tarda.org/f/hoas-benefit-from-onsiteoffsite-timeshare-resale-programs

Thank you Irene, a very interesting article and I hope it helps to answer some of the questions we receive.

It should also be pointed out that in the UK, one bank, Shawbrook Bank, did acknowledge a few years ago that they did not carry out their due diligence when authorising timeshare loans, meaning many agreements were signed without the affordability checks. The bank set aside around  £9 million to cover any defaults on these loans as they would have had great difficulty in enforcing these loan agreements in the County Courts. The CEO at the time was forced to resign as he was the one that arranged the agreements with the timeshare companies.

Another point is all timeshare sales companies must be authorised in order to broker these loans, before April 1st, 2014 these would have been authorised by The Office of Fair Trading and from that date by the Financial Conduct Authority. A case that Inside Timeshare has been following was the validation of these agreements by Barclays Partner Finance for loans brokered by Azure Service Ltd who were not authorised. This validation order would legalise the loan agreement and make it enforceable in law.

Inside Timeshare has already uncovered many timeshare companies who brokered loan agreements with various lenders and have found that the vast majority have never been authorised. This investigation is ongoing and is being used to end loan agreements.

That is all for this week, have a great weekend, and join us again next week for more news and information on the murky world of timeshare.

Friday’s Letter from America: Timeshare Tipping Point

Welcome to another article in our Letter from America series, once again Inside Timeshare would like to thank our stalwart contributor Irene Parker for organizing this week’s article and those who have helped. This week we look at Timeshare Talks, which can be found on YouTube, but we will let Irene explain.

Timeshare Talks Guests – Past, Present and Future

See the source image

Hosts John Raymond, Resort Reseller

Wayne Robinson, Everything About Timeshares 

Irene Parker, TIMESHARE TALKS Coordinator 

June 25, 2021

TIMESHARE TALKS Library and Schedule

Goals: #1: To Educate and promote a viable secondary market 

#2: To be a bridge between developers and timeshare members and owners

Please subscribe to our YouTube Channel as that helps our efforts and might help someone buy a timeshare that is just perfect for their family! 

Our most recent guest was Ron Roberts of Legacy Solutions International. Ron talked about the reluctance of some HOAs to allow a responsible timeshare exit and how onsite or offsite sales centers can reverse negative trends. 

https://tarda.org/f/what%E2%80%99s-a-legacy-resort-and-why-are-they-struggling

Next week Jake Bercu, a Tahoe Beach and Ski Club HOA Board Member, will talk about an HOA board that is doing things right. 

Our guest this week was Inside Timeshare Contributor Tiffany Renee who talked about proposed timeshare changes and how her family was affected by unfair and deceptive practices. The proposed changes are being presented to lawmakers, regulators and the Federal Trade Commission. Timeshare Sales are #7 on the FTC’s Top Ten Scams list this year and Timeshare Resales (Fake buyers) #10.

Tiffany’s parents were convinced to give up their two deeded timeshare weeks that they loved for years, and buy points believing they would transfer the timeshare liability to their children if they didn’t convert to points, and that maintenance fees could increase from $2,000 a year to over $6,000. They agreed after 11 hours. The result – fees increased to $6,000 and they were forced to default on their two deeded weeks and lost $34,000 buying points they didn’t need and could not afford.    

Proposed changes and in red how Tiffany’s parents experienced this: 

1.   Consumers are routinely told they will not be attending a sales session and/or that the meeting is mandatory when it is not. Tiffany’s parents were told they would be charged $400 if they did not attend. It was a timeshare exchange, so the meeting was not mandatory, 

2.    A disclosure warns the buyer that they are not allowed to show a proposal to anyone outside the company. This is unfair, especially for those who may be of diminished capacity. Tiffany’s parents do not read well. The contract was read to them. 

“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.” 

3.    A recorded closing (signing) session is used against the buyer. Tiffany’s parents were told they sounded fine on the recorded QA (after 11 hours). Tiffany researched her parents’ QA agent and learned that he had spent four years in jail after burglarizing seven homes, some while occupied. 

4.    If the recorded closing can be used against the buyer, the buyer should be allowed the opportunity to record the sales session. Tiffany’s parents would not have known how to do this. The buyer must check to make sure recording without the other party aware being is legal. It is not legal in Florida. https://www.justia.com/50-state-surveys/recording-phone-calls-and-conversations/

5.    If disputing a contract, the buyer should be allowed to listen to the entire recorded closing without obtaining a subpoena. Tiffany was offered the opportunity to listen to “snippets” of the recording, which is like listening to Dr. Fauci say on a snippet that it’s not necessary for people to wear masks.  

6.    It should be disclosed if the QA agent is incentivized. (Not applicable to Tiffany’s parents)

7.    An additional purchase should be identified on the contract as an “Incremental Purchase” instead of “Additional Equity” as use of the word equity is misleading. (Not applicable to Tiffany’s parents) 

It was explained that we could reduce our monthly payments by getting a HELOC through US Bank using our “additional point equity” of $240,040 which the agent 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.

8.    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. Tiffany’s parents could not have comprehended a POS and didn’t know about contract rescission periods.   

9.      The buyer should be allowed 24 hours to consider their purchase. Tiffany’s parents were demanded to buy the same day after 11 hours.  

10.    The buyer should be provided access to the booking site prior to the end of the contract rescission period. Buyers don’t even know what they bought because availability is not part of the contract. (Not applicable to Tiffany’s parents)

Upcoming Scheduled TIMESHARE TALKS Guests 

(Subject to change)

July 1: John Kushman, with Timeshare Specialists, gathered the names of more than 117 Timeshare Exit Scams. Retired Canadian Police Officer and timeshare Volunteer Earl Sharpe, Faith and Raven join the talk. Scam Hotline: 

https://timesharespecialists.com/

https://timesharespecialists.com/timeshare-scam-database/

July 8: Jessica Burke Crosby, a Virginia timeshare broker associated with Timesharing 2000 talks about the benefits of renting timeshares

http://timeshares247.com/TheIndustry/AllIndustryCompanies/IndustryCompanyDetails/tabid/125/ItemId/1508/Timesharing-2000.aspx

July 15: Irene Robert, TARDA board member, talks about the Public Offering Statement and why buyers need to review this state-mandated document before they buy a timeshare    

https://tarda.org/f/what-is-a-public-offering-statement-is-it-important

July 22: Mike Kennedy and James Burbridge, KOALA, an alternative to II and RCI, talks about their rental platform. 

https://www.go-koala.com/

YouTube #12, July 29 Karen Levins, of Ontario, Canada talks about how their group of determined volunteers, raised funds to retain an attorney, to challenge  Wyndham’s Carriage Hill and Carriage Ridge Resort that did not allow a responsible exit under any circumstances. Less than 13% voting to keep the resorts a timeshare prompting the sale of both resorts.

https://tarda.org/f/survey-recommends-wyndham%E2%80%99s-carriage-resorts-be-sold

YouTube #13 August 5 Bernadette in Oklahoma her Change.org petition hoping developers will acknowledge deceptive timeshare sales are part of the problem so they must be part of the solution. 

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

Frank and Betty Lusk were sold $150,000 in timeshare points at ages 88 and 89 

August 12: Guy Hart Protecting our Elders

The Rachel Ramos YouTube illustrates how easy it is to be scammed. Guy will talk about fake arbitration and other arbitration pitfalls 

https://protectingourelders.com/

August 19: Beth Roller, who worked as a front-line Covid nurse at the height of the pandemic talks about how believing a timeshare sales agent negatively impacted her life. 

https://insidetimeshare.com/fridays-letter-from-america-covid-nursing-and-timeshare/

Archived Guests and Articles 

May 27, 2021 – John and Irene Introduces TIMESHARE TALKS 

Why is the resale value for timeshares so low? 

May 28, 2021: Wayne Robinson, author and former timeshare executive 

https://insidetimeshare.com/fridays-letter-from-america-77/

Everything About Timeshare, Before, During and After the Sale  

Listing companies often inflate the price of the listing. There are no “comps” which is the first thing a traditional real estate agent shows you when you list a house. Check out the secondary market before committing to a same-day sale.  

June 2, 2021 – Earl, Faith and Raven, CRIMESHARE – “Your New Tennessee” Resale Scam caused by a Mexico timeshare scam 

https://tarda.org/f/crimeshare-%E2%80%93-a-sophisticated-timeshare-resale-scam

https://tarda.org/f/memorial-day-honors-all-who-died-serving-our-country

June 9, 2021 – Air Force Veteran Adam Siler June 9, 2021

Why Veterans and Active Duty Service Members Support Resellers

Adam’s ID: [email protected]

https://tarda.org/f/a-veteran-and-active-duty-military-timeshare-outreach

Adam talked about veteran outreach & active duty service member concerns, #2 of 3 FTC factors defining a “deceptive practice” of the Act is that the actions “cannot be reasonably avoided by the consumer.” Given Adam was given a written illustration of 7% financing, and an assurance from the sales agent that he had the means to assist in refinancing, it would have been difficult for Adam to have avoided the deception. 

Who’s Next?

If you have something you would like to talk about, or share an experience, good or bad about timeshares, contact John at Resort Resellers. The best defense against an albatross timeshare is consumer education and an informed buyer. Developers and members alike should support raising awareness about the oral representations clause and expectations about what to expect if the need comes up to sell or dispose of a timeshare. 

That is all for this week, at present no date can be set for the full return of Inside Timeshare, it is hoped that a partial return will begin in the next week or so. In the meantime, have a great weekend.