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?”
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 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.
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
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
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.
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.
We regularly see advertisements for various products being endorsed by celebrities, it is a marketing tool that can pay great dividends for the product. In most cases, the product itself would sell on its own, but the celebrity endorsement just makes it look better. So are you influenced by these endorsements?
We are all very familiar with the Nespresso adverts featuring George Clooney, and who remembers the hilarious adverts featuring Joan Collins and Leonard Rossiter for Cinzano? (Revive your memory on the link below).
Those adverts were very popular, with Leonard constantly throwing his drink over Joan, but there is a very dark side to many of these endorsements. Not all products are what they seem, timeshare is one of those, along with endorsements for “exit companies”.
One timeshare resort, Club la Costa, based on the Costa del Sol is one of these. Their ambassador is none other than Jennie Bond, (is she paid for this?) the former BBC Royal Correspondent and also a regular presenter on the BBC program Rip Off Britain.
Jennie Bond has for some years promoted Club la Costa, visiting many of their resorts and these videos have been posted on YouTube. (See link below of one visit to Tenerife). In the videos, Ms. Bond shows the resorts, which we have to admit do look stunning, they also show all the amenities for adults and children and everything else on offer to their members.
The one thing they do not show is how the timeshare is initially sold, the long high-pressure sales presentation, the misleading “benefits” of membership, such as “it is property and an investment and will go up in value”. They also do not explain that CLC was selling their “product” breaching the strict Spanish Timeshare Laws.
It is also very interesting that back in 2014, the late Sandy Grey founder of the TCA was interviewed by Rip Off Britain on the very subject of the techniques and misrepresentations made during the sales presentations. This was also highlighted during an investigation by Andrew Penman of the Daily Mirror, who had received many complaints about CLC.
But for some reason, the BBC pulled the item from the schedule and it was never broadcast. We do have to ask the question, was this down to the fact that Jennie Bond being CLCs ambassador was also a main presenter on the program?
We leave you the reader to decide on that.
Then we have Anfi, a resort which these pages have published many articles, not just the court cases for the selling of illegal timeshares, but more importantly the Tauro Beach Project. This was for the development of a new man-made beach, shopping center, and hotels located near Anfi Tauro Golf and Resort. There was also a plan to build a marina.
The Anfi Ambassador is none other than the local Arguineguin lad and former Manchester City and world-renowned football player David Silva. He is a player who is very well respected the world over and is very much proud of his hometown of Arguineguin, having helped provide many facilities such as the local sports center and also financed the development of apartments, creating much-needed employment.
David Silva interview
But, unfortunately, it appears that he was used by Anfi to promote the now-discredited Tauro Beach development. This story has been published not only by Inside Timeshare but also by mainstream Spanish press and other outlets across Europe.
This whole project to create a manmade beach does appear to have been beset with what might be called irregular procedures, the granting of licenses and permissions months after the work had started, and falsifying documents after the fact. It was the Guardia Civil Nature Protection Unit (SEPRONA), who originally instigated the investigation and made this public. Along with this was the illegal importation of sand from the Western Sahara, which is banned by the U.N. and the E.U.
It is obvious that David Silva was totally unaware of what was going on, and promoted Anfi and this project for the good of his hometown as it would provide much-needed employment. We just wonder how he feels about this now that it has been made public?
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?
Is a 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 TALKSJessica 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.
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:
One developer’s contract used to specifically state that they do not pursue summary judgments. That language has been removed.
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
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%.
Hilton Grand Vacations and Orange Lake/Holiday Inn have sued members defaulting on loans, according to one exit provider.
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.
Yahoo Financereporter 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.
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:
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?
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.