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Licensed Timeshare Resale Broker Association

Friday’s Letter from America

It’s Friday and time for another Letter from America with Irene Parker, this week is part 1 with part 2 due shortly. Now, in Europe it has been a little quiet on the courts front this week, although there have been many cases before the courts, no sentences have been announced, so nothing there to report.

Inside Timeshare has been receiving many more enquiries regarding RSB Legal and Taylor Marshall Associates, these have all been very similar. They have all paid substantial amounts of money to have their timeshare contracts cancelled, none of this has been done. They are all receiving demands for unpaid maintenance and many are now in around two years of arrears.

It is obvious that these contracts have not been cancelled, despite what RSB Legal and Taylor Marshall are saying. All those who have contacted us have told us the same thing, their resorts have insisted that they do not deal with third parties to cancel contracts, only direct with the member.

Club la Costa has also been explaining this to members, they even informed RSB Legal and Taylor Marshall that they would not deal with them. But obviously they just carried on regardless and taking huge amounts from members knowing full well they would not get the contracts cancelled.

Another company which Inside Timeshare reported on in May, has come up yet again, Donaldson Bruce Associates, as we stated in the original article there is no record of them at Company House in the UK or in Spain. The website is registered under a privacy company and there is no address given just a contact page and a Sheffield telephone number 0114 303 0678.

This time the caller who stated to our reader that Diamond Resorts is closing its European Portfolio and will only be operating in America, well that is news to us and all the Diamond members who own in Europe! Having spoken with Diamond Resorts today about this company, they are now looking into the matter, they also confirmed that they will only deal with members direct regarding surrender of membership and not with any of these types of companies.

This is obviously a scare tactic on the part of Donaldson Bruce agents, to get people to sign up for a claim. Diamond Europe I believe, would inform their members if anything like this were to happen, after all it is in their interest to do so.

We do know that Diamond did close their sales offices and many staff had to be laid off, obviously many of these have set up these “claims” companies and may be using the data “stolen” from Diamond to contact their old clients. On the point of the sales office closures, this was done for economic reasons, Diamond have franchised out the sales side so they are no longer responsible for the marketing costs or wages of the sales staff.

http://insidetimeshare.com/thursday-news-slot-a-new-cold-calling-claims-company/

So now on with our Letter from America.

Part I – Did You Get the Letter?

Part II – I got some letters

By Irene Parker

Most members begin their report: They said I should have gotten a letter…

June 22, 2018

There is no question there are millions of timeshare members happy with their timeshare. However, many existing members may be unaware their timeshare has little to no secondary market until a life event makes the timeshare unaffordable, or useless, because of the inability to travel. Deeding it back to the timeshare company without receiving any monetary value back may be acceptable when you have used the timeshare for many years, but what about the buyer who purchases a timeshare and then learns, sometimes just weeks after purchase, they were a victim of fraud? Most of the 466 families reaching out to Inside Timeshare allege they were baited and switched. Many with 800 credit scores now brace for foreclosure.

We need to equip the existing timeshare member, as well as the first time buyer, with the tools needed to make an informed decision. We feel the timeshare consumer should be made aware that there may be little to no secondary market for the timeshare they purchased. It would be helpful to know that the points you paid $60,000 for should only be listed for $4,500, in the case of one timeshare company that has even this much of a secondary market. A member of the Licensed Timeshare Resale Broker Association can estimate what your timeshare may be worth. LTRBA members will not even accept a listing for the points I purchased feeling my timeshare points have no secondary market. http://www.licensedtimeshareresalebrokers.org/

Do not pay anyone upfront money to get you out of your timeshare without checking with us or one of the self-help groups listed below. There are many scams created by this flawed points based product.    

Existing timeshare members almost always begin their complaint like this:

Sales agent: “Did you get the letter?”

Timeshare owner: “What letter?”

Sales agent: “You should have  gotten a letter.”

Timeshare owner: “I didn’t get a letter.”

There was no letter and the reason the sales agents said this was to disturb the existing member. This is a common sales technic. As a financial planner, I disturbed my prospects with, “Do you know if you have saved enough to generate 70% of your current income in retirement?” The difference was my prospects needed to fear this, but in complaint after complaint, the fear factor was used to coerce a timeshare member to give up their deeded timeshare and convert to points, or lose everything. Another fear factor is, “If you don’t buy points (if they are not holding a deed), you won’t be at the level needed to pay maintenance fees with points (or sell points if that is the member’s concern). No timeshare member is required to give up their deed, unless all owners are required to do so because the timeshare is being terminated.

 Many members are astonished at the level of deceit they say they experienced. One former timeshare sales agent told me her manager told her to order the CIA Manual on Human Manipulation. When I looked up human manipulation I found several of the  20 most common manipulation techniques used, have been used on timeshare buyers. The actions of these bad apples makes it hard on sales agents that do sell the product honestly. For some companies, I’m not sure if the honest or dishonest agent is considered the rogue.

  20 of the most common manipulation techniques (my comments to the techniques I picked out as applicable to timeshare are italicized)

The Patriotic Vanguard http://www.thepatrioticvanguard.com/20-most-common-manipulation-techniques-used-by-human-predators

  1. Lying

Predators are constantly lying about practically everything in their life. They do this to wrong-foot their victim and confuse them. Lying is one of the manipulation techniques psychopaths typically use because they have no qualms about it.

Complaints always begin, “The sales agent said” and the member’s complaint is almost always dismissed with, “We are not responsible for what our sales agent says” or “You signed a contract” unless the member is holding a smoking gun (like the recording of a fraudulent sales presentation or a sophisticated spreadsheet they managed to get a picture of or smuggle out). One complainant even said her sales agent told her when she contacted him, “It doesn’t matter what I said. The only thing that matters is what you signed.” This dismissal is backed up by some Attorney General Timeshare Division reviewers, responding, “You have no proof” or, “You should not have relied on verbal representation.”

Okay fine. Our mission is to alert the public not to believe a word a timeshare sales agent says.

  1. Not telling the whole story

This is different to lying as a predator will often keep a key part of the story to themselves in order to put their victim at a disadvantage.

Oh Boy! We could write a novel about this tactic. “You can pay all your maintenance fees by charging to a credit card.” This may work for a timeshare sales agent earning $600,000 a year charging $270,000 to a credit card to pay a $2,700 maintenance fee, but for the average timeshare buyer, a 1% credit is a far cry from paying all the maintenance fees. “And you can use your points for airfares!” When I attempted this it would have cost $2,300 in maintenance fee dollars to book one domestic round-trip ticket. One former timeshare sales agent told me he was forced out for explaining the actual value. He had 30 years in the business before joining this particular timeshare company.

  1. Love-bombing and devaluation

Narcissists typically use love bombing as a manipulation tactic, they will go on a charm offensive and get you hooked into thinking this is the best relationship ever, then they’ll drop you like a ton of bricks without explanation.

This from Phyllis, being encouraged to give up her timeshare deed:

I am a senior citizen 5 feet tall women and he is a 6 feet tall man standing over me stating he was a child of GOD and he can help me then said to me “I am a friend I can tell you the best thing to do only if I signed”. He added the BANK CREDIT CARD. I was misled to only use the card for shopping that my points would go up and maintenance fees would go down. I never received the card. I never used the card. Now I have a trial date May 8, 2018 to pay their lawyers in the amount of $3446.04. They sent a letter stating the timeshare went into foreclosure and I am out of the contract. Since the timeshare and the bank are together I should be out of paying the bank as well? I need help. Could someone give me advice? Can I get someone to go with me and represent me? I am afraid and stressed. Please – email me on what I can so as soon as possible. Thank You.

The credit card company kindly granted Phyllis a 60 day extension to July. She is representing herself.

  1. Denial

Often the simplest way a predator will manipulate a person is by denying the thing they are accused of ever happening.

The timeshare company party line response has been, “After a thorough investigation, the sales agent said he didn’t say that. Here are your initials on the fine print. You signed a contract. Kind regards.”

  1. Spinning the truth

How many times have politicians twisted the facts to suit themselves? This spinning of the truth is often used to disguise bad behaviour by predators such as sociopaths.

This is one of our most recent complaints:

After we said no to L, Mr. Richard C told us we should buy points to save money on airfare since we have to fly so often to India to care for my mother undergoing chemotherapy. Richard said we could use our points to pay for plane tickets to India to help reduce expenses. L gave a long lecture on how immigrants (referring to me) should behave in the United States and should invest in programs like this to save money on travel.  They said I could fly four times to India instead of two. We have learned this was all a lie.

  1. Minimising

Where a predator will try and play down their actions as not important or damaging and shift the blame onto the victim for overreacting.

“You were confused” is a frequent response.

  1. Targets the victim

When a manipulator accuses the victim of wrongdoing, they are making the victim defend themselves whilst the predator is able to mask their own manipulation techniques. The focus is on the victim, not the accuser.

See #4

  1. Positive reinforcement

This includes buying expensive presents, praising them, giving money, constantly apologizing for their behaviour, excessive charm and paying lots of attention.

In timeshare these are all the free tickets, restaurant coupons and giveaways.

  1. Moves the goal posts

You might think you know where you stand with a person, but if they are constantly moving the goal posts in order to confuse you, then it’s likely you’re dealing with a predator.

These seniors lost their entire savings, $13,000, and were foreclosed. They were sold a minimal number of points that they could have vacationed with, but then up-sold into foreclosure, told they would lose everything if they did not buy more points. The husband diagnosed with Alzheimer’s and the wife hard of hearing. The company used the recording of the QA against them telling the grown son, and “We recorded the QA. They were very engaged.” In a PR Release the company had stated the recording of the QA was an enhanced Quality Assurance. Members are not allowed to record the sales session.

http://insidetimeshare.com/the-tuesday-slot-with-irene-8/

  1. Diversion

Diverting the conversation away from the perpetrator’s act and moving the conversation onto a different topic is a typical way predators manipulate their victims.

When I told a scam my timeshare company does not allow renting points and I can send them the rule, they smoothly asked, “So how much are you paying in maintenance fees?” as they moved on to a travel reimbursement pitch.  

  1. Guilt tripping

Someone who manipulates can guilt trip their victim by saying that they don’t care about them or that they are selfish or their life is easy. It all helps to keep that person confused and anxious.

Guilt tripping in timeshare often lays a guilt trip on the parents that they are not providing adequate vacation time for the kids.

  1. Playing the innocent card

A true manipulator will feign utmost shock and confusion at being accused of any wrongdoing. Their surprise is so convincing that the victim may question their own judgement.

One member reported they were told, “Those sales agents at that sales center are good guys.”  This was a sales center we received over 50 complaints against, eleven against one particular agent.

  1. Over-the-top aggression

Manipulators often use rage and aggression to shock their victim into submission. The anger is also a tool to shut down any further conversation on the topic as the victim is scared but focused now on controlling the anger, not the original topic.

See what happened to Phyllis in Point 4. We are flooded with complaints about timeshare sales presentations that last for hours with members being browbeat by rotating aggressors until they were diminished down to mush. I’m not making this up. If I had not heard 466 stories, I would not be this confident.

  1. Isolation

It is far easier to keep a person under control if they are isolated from family members and friends who could shed some light and truth on the situation.

This is accomplished by NDAs and arbitration.  I refused to sign one after I was offered our money back, which is why I am still standing. The developer describes arbitration something like, “litigating from the comfort of your own home.” The timeshare company hires the litigator for $400 to $500 an hour.  

  1. Feigns love and empathy

Predators such as psychopaths and sociopaths do not know how to love someone other than themselves, and cannot feel empathy, but they can pretend to in order to inveigle others into their lives.

See what happened to Phyllis in Point 4.

If you watch out for the above manipulation techniques, you can keep yourself out of a predator’s clutches.

… For reading, responding and for helping others.

Contact Inside Timeshare or these self-help groups if you need help or have a question you need answered.

We seek to provide timeshare 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/timeshareadvocategroup/

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

https://tug2.com/Home.aspx

https://www.facebook.com/groups/180578055325962/

https://www.facebook.com/groups/465692163568779/

https://www.facebook.com/groups/1639958046252175/

FTC Report on Fraud

https://www.ftc.gov/news-events/press-releases/2018/03/ftc-releases-annual-summary-complaints-reported-consumers

Thank you Irene, we look forward to the second installment, join us again next week for more “Nightmares on Timeshare Street” and remember to do your homework, check, check and check again, there are many out there who just want to take your hard earned cash.

If you need any help in identifying any company that has contacted you or you have found on the internet and want to check if they are genuine, then use our contact page and get in touch.

Have a good weekend.

The Tuesday Slot with Irene

Welcome to the Tuesday Slot, this week Irene Parker looks at “Special Assessments”, in this case the Americano Beach Resort, this extra charge is something that we are familiar with on Inside Timeshare.

Over the years many owners / members have been handed these “extra bills” for various reasons, we even saw this with Diversified Resorts a couple of years back. That was because they had a huge tax bill owing, even those members that did not own with them at the time the tax should have been paid were given a bill. If they did not pay it within 30 days their membership would be suspended, blackmail or what!

Now for today’s article.

Americano Beach Resort

A Timeshare Resort in Dispute Hoping for a Dialog

By Irene Parker

June 19, 2018

Americano owners have been the recipient of a ‘special assessments’ to repair the Americano, which according to ABR/ARC is to the tune of around $15 MILLION!  

Hurricane season just launched, so as we brace for what is predicted to be a robust hurricane season, we look back to damage from which some resorts have still not recovered. When disaster strikes, dialog is important to restore not just the building, but the relationship between members and the developer. At the end of the article, I’ve included Tom Tubbs’ article about special assessments. Tom is with Island Consulting Realty and has 33 years industry experience. Tom is a member of the Licensed Timeshare Resale Broker Association.  

Americano Beach Resort, a/k/a The Suites at Americano Beach, now managed by ARC Resorts, LLC, has been shut down since a few days before Hurricane Irma hit Florida in September 2017. The reconstruction of the Americano Beach Resort is a complicated timeshare issue, and one that will take a series of articles to understand, given the complexity of the problems and the concerns of those who have owned at this timeshare for a couple of decades. Six Americano timeshare members have reached out to Inside Timeshare, expressing their frustration.  

As reported in Perspective Magazine, the plan before hurricane Matthew hit:    

In February (2016), ARC Resorts (ARC) acquired the rights to The Americano Beach Lodge Resort Condominium Association Inc. to uniformly redevelop and manage the 198 timeshare units located in Daytona Beach, Florida. Their objective is to redevelop and revitalize the property without burdening the timeshare unit owners with special assessments.

At The Suites at Americano Beach, the (hurricane Matthew) storm surge overwhelmed the Beachside Tiki Bar and the surrounding maintenance area beneath the pool deck. A large portion of the Sea Wall was washed away. The CAT 3 Wind forced significant water intrusion in the units, and compromised the window systems. The wind also compromised all the roofing systems. The resort ran on partial power for several days, which affected several major systems, such as the elevators and the cooling tower.

http://perspectivemagazine.com/081220165656/arc-resorts-daytona-property-rebounds-after-hurricane-matthew

Prior to the natural disaster however, ARC assessed the newly attained property in a thorough Insurance Review. They were able to upgrade the insurance coverage while lowering annual premiums. One feature in the upgrade was Business Interruption as a line item of additional hazard insurance coverage. This due diligence established security for ARC as an investor and shielded timeshare owners from excessive assessments.

https://www.insidethegate.com/2016/12/arc-resorts-daytona-property-rebounds-after-hurricane-matthew/

I reached out to R. Scott MacGregor, ARC President, and a 30-year resort industry veteran with executive experience in project planning, development, marketing, management, and finance. Scott understands the frustration long time owners feel.  

Like many resorts in the US, the Association had chronically underfunded reserves to keep assessments down, and had allowed a majority of the intervals to fall into default. Most boards of volunteer owners just aren’t prepared to deal with those issues, especially when a 60-year-old building requires the level of re-investment that the Americano does.

Americano members are asking for answers they feel have not been forthcoming in informational updates and meetings. Below are the questions Americano members would like answered. Scott MacGregor’s comments and answers to questions are in italics.

ARC had already agreed to post answers to many of the same questions that were presented at the May board meeting on the website, and we will do that and include some of the other questions provided below. Official information will be posted on the Association website only.  

Questions owners posed. Scott MacGregor’s answers are in italics.   

How much damage was claimed from Matthew?

How much has the insurance paid on these claims?

How was the money spent?

Owners state that there are lawsuits against insurers of the Americano.  What is the basis of these suits? I can’t comment publicly on the ongoing insurance litigation, only to say the basis for the lawsuits, for which the Association is the plaintiff, are over differences on the amounts claimed and the amounts paid by the insurers. Inaccurate comments about the litigation or the resort will be detrimental to the Association.

What work has been done on the Americano to date?

Why has it taken so long to get the Americano back open for business?

How much damage has been claimed from Irma?

How many special assessments are Owners expected to receive and what amounts?

The remodeling plan exceeds costs of $15 million.  It was stated that ARC anticipates gathering $10 million from investors.  What is the time frame for that?

Is it reasonable to expect owners to supplement $5 million, especially since it was stated 60% of owners are no longer paying annual maintenance fees?

If 60% of owners are no longer paying regular maintenance fees, how can the remaining 40% supplement the 60% who are not paying? If the 60% is accurate, it will be too costly for anyone to continue as an owner.

What do you estimate the building will be worth after all the renovations are complete?  Property records show the building valued at approximately $14.5 million now. The building was appraised and insured for $22 million, with additional coverage for contents, etc. (One of the members thought Volusia County had the building valued at or near $15 million.)

What kind of ‘exit’ plan do you have for owners who can no longer afford or wish to be part of the timeshare program, particularly long-time owners who are now senior citizens on fixed incomes?

Who owns ARC?

If the damage is more than 60%, should the building be declared totaled?

What compensation has been offered to owners who have not only been unable to use their weeks, or bank the weeks for exchange, but have paid maintenance and/or assessment fees for several years with nothing to show for it?  

Irene’s answer: Whether it is a timeshare condo or your personal residence, if a hurricane destroys property to the extent you can’t inhabit the property, it’s never easy. Property taxes and other expenses continue and alternative living arrangements need to be made. The real question the owners are asking – Is the reason the resort is still not open valid? It may be. The developer has every reason to see a closed resort open. If your home is 60% destroyed, it would be hard to find a buyer and more difficult to walk away from.     

Unrelated to the hurricane damage, owners claim that ARC has made significant changes to the way owners have always been able to book/use their timeshare weeks. Some say they have had their weeks changed from prime to non-prime; some have lost the weeks they had always booked for races and Bike Week; some were told they had to buy into a more expensive points system; some were told they had to change from Interval to RCI for exchanges, etc. We will reach out to these owners in a future article.

As was discussed at the May board meeting we can amend the Declaration to change the definition of a week from beginning on a Saturday only to being what suits the owner better. Race Week owners could stay Monday to Monday, for example, so they could enjoy the pre-race activities and stay over the night after the race without having to rent additional time. Bike week owners might prefer to come Sunday to Sunday, and be assured they could come for that event regardless of when the City scheduled it.

Owners reaching out to Inside Timeshare feel they may have been scammed, particularly as some owners paid thousands (as recently as 2017) to buy into a points system as they were told they had to in order to be able to continue to use their timeshare. No owner should have to give up a deed. Before doing so, the deed holder needs to make sure if the reasons a sales agent gives for giving up a deed (at any timeshare) is warranted.

At an Americano Board meeting May 21, 2018 a member reported:

Owners say they received a survey PRIOR to an owners’ meeting in March 2018, giving owners a chance to vote for:

(a) Continuing the timeshare program as is,

(b) Reducing the timeshare program to a few floors while redesigning and selling the rest as private condos, or

(c) Terminating the timeshare program altogether.  

From what owners say they were told at the meeting, over 60% voted to terminate the timeshare program.

Chris Crawford is an Americano owner and admin of a member sponsored Facebook page consisting of 200 owners. Chris did not attend the meeting, but feels the vote was hearsay. He said members who did attend reported no actual numbers were presented. Owners say they are frantic as they believe that they will lose their timeshare that they have put thousands into, many well over 20 years, and get nothing back.

Many want to deed their timeshare back to Americano. According to members, resellers will not even talk to owners about trying to sell as they are saying there is a lawsuit pending, but owners say they are receiving no information about a lawsuit (unrelated to the insurance litigation).  

Chris says complaints have been filed with various State of Florida agencies, certified letters sent to Americano Board of Directors and ARC requesting specific documents as proof of damages claimed, but owners say they have received no responses from Americano or the state agencies.

Scott MacGregor said there have been updates and information posted to members reporting the status.   

I hope the members of the member sponsored Americano Facebook group will heed the advice given to them by the State regulators and timeshare attorney Finn of Finn Law Group:  present evidence of malfeasance to the State Regulators or to a court of competent jurisdiction to be adjudicated, and/or present a plan for consideration by the Association which is better than the one ARC has presented.  

Our plan is pretty simple: we have been consistent from our engagement with the Americano that it will take about $15mm of capital to restore the facility to a current and compliant property after suffering years of under-investment in the reserves required to update all of the common elements when they reached the end of their useful lives. Initially, we intended to do that by generating $40 – 50 million in sales over 5 to 7 years and attributing about 25% of the sales volume (which is standard “product cost” in many US timeshare developments) toward that reconstruction.  Unfortunately, August of 2017 was the first month we attained break-even sales volume at the resort, only to have it shut down by Irma in early September. So, now our plan is to raise through ARC debt or equity $10 – 12mm as rapidly as possible to renovate the entire facility; to reduce the timeshare program to the number of units needed to support the remaining timeshare owners, and modify the use plan to make it more flexible for those owners.

Financially, the costs of ownership should decrease as the significant bad debt burden the owners have increasingly borne over the past 10 – 15 years would be eliminated, and the facility would be significantly upgraded, thereby eliminating the historic underfunded reserve problem the resort has had for the same time.  A facility of that size should have roughly $6 – 8 million in reserves. In the years prior to our involvement, its reserve balance as reported in its audits was closer to $500 – 600 k, less than a tenth of what was required. This is a common problem with too many timeshare resorts, done to keep the maintenance fees artificially low.  2016 was the first year in many that the Association had more than a million dollars in its reserve at year-end. I’ll also point out that 2017 will have been the first year the Association ever (as far as I can tell from past tax returns) the Association received net rental proceeds from the Developer, netting more than $120,000 through the first 8 months of the year.  The remaining units will be restructured as whole-ownership vacation rental units or held for rental, hopefully generating a return of and on the capital ARC is seeking to raise for its reconstruction.

It is the intent to raise capital externally, and not to require any additional assessments of the owners.  Were the remaining owners (including ARC which owns and pays assessments on approximately 1,450 intervals) to be assessed the amount necessary to complete the renovations, because more than 60% of them have stopped paying assessments over the years, the additional bill to each owner would have easily exceeded $5,000 per interval, which is not tenable.  The capital needed to be raises for a project like this isn’t easy; the units are small and don’t have external balconies, so the margins on redevelopment are slim. The funding will come from private investors; most likely those with a present stake in the Daytona market, from some of the specialized US timeshare lenders, or perhaps from a smaller Private Equity firm.  It’s what I spend most of my time working on.

Scott answer my questions highlighted in red: Since Inside Timeshare is published in Spain, we are interested in a statement made that ARC has ties to the EU. What are those connections?

When we started putting ARC together in 2015, one of the aspects we sought was ties to European (and South American) companies that we could leverage to send owners on trips abroad, especially to countries of their heritage.  Silverpoint and RCI Europe both expressed an interest in helping to do that, though we have no formal or financial ties to either. We do have a contact with the Holiday Plus discounted European hotel program, to which our ARC Freedom 365 members have access through the “Heritage” program on our website.  We will do an occasional “inventory swap” with Silverpoint, as we do with dozens of other companies. This helps us to place owners in locations they may not be able to get through direct exchange programs like RCI or II. Also, much of the programing staff for our technology partner TimeshareSoft International is based in Bulgaria.  We may also try to market some of the Americano condominiums in the EU and Asian markets through established broker networks in those regions, though we have not yet entered into any agreements to do so. There are no contractual or financial ties between ARC and Silverpoint. If there were, we’d leverage their destinations for marketing purposes on our websites.

Are hedge funds involved in the raising of funds?  

Hedge funds tend to make large, long-term investments in companies and real estate projects, but something as small (from their perspective) as ARC and the Americano redevelopment are not in their wheelhouse. We will raise the development capital from individual investors as noted above, and or from US specialty lenders in the timeshare space, and possibly from smaller Private Equity or VC firms. Due to the risk profile and complexity of the Americano, it will most likely be individual investors with interests in Daytona or other Florida beach markets and/or the US timeshare lenders.

My view is the solution is not to try to take the whole industry down, but to work on making parts of it better with community-based approaches to supporting the stronger, more sustainable resorts and helping those that are failing to do so in a controlled manner preserving as much value as possible and avoiding complete collapse of the Associations. I gave a similar presentation to the Timeshare Board Members Association in Orlando in May.

I don’t think anyone wants to take the whole industry down, but given several lawsuits and Attorneys General settlements, we believe timeshare could improve, especially in the sales and marketing department. Inside Timeshare has heard from 473 angry timeshare members and owners to date. We hope constructive dialog can improve customer relationships. If President Trump and Kim Jong-un can sit down and have a friendly chat, we should too.

Chris said the Canadian Teacher Association originally owned the Americano, developed as a place for teachers to vacation. According to Chris, the single largest shareholder (the old owner) sold it to ARC.  

Proprietors behind Americano are ARC American Resort Collection

http://www.arcresorts.com/about-arc/

Special Assessment: What Is It? Why Is It?

Tom Tubbs

Island Consulting Realty

It can happen. You open the mail from your timeshare resort and here’s a letter of explanation of why they are asking you to send them more money. First you have to understand what it is and is not. A special assessment is just that, special. Normally your maintenance fee is covering everything; upkeep of the unit and common area, housekeeping, taxes, utilities, insurance and also reserves. Let’s look at reserves. That’s the part that they collect and set aside for when the big things happen that we all know about; repave the roads and parking lot, new roofs, etc. It’s also called a sinking fund. But sometimes things occur that no one could have planned on and there’s no money in the budget to handle it.

Think of it this way. Every few years you paint your home (reserves). You know it’s coming. You clean the house regularly (housekeeping). You pay your taxes and insurance. But one day you’re outside and notice a crack in your foundation. You didn’t plan on it and didn’t budget for it but guess what, it’s there! You have to pay to get it fixed. That’s the same sort of thing that can happen with any homeowner’s association whether it’s your own neighborhood or vacation condo you own. Same with a timeshare. If it’s something that could not have been predicted, it simply has to be taken care of. The alternative is not making the repair and having the quality of the resort go downhill. That’s worse.

But here’s what you do have to watch out for. If it should ever happen to you, you need to know the real reason for the assessment. Was it something like described above and simply could not have been predicted? If so that’s understandable. BUT, what if they tell you it’s for “refurbishment” or something similar. That’s a red flag and it needs to be looked at. Since any competent management company or homeowner’s association knows that refurbishment is an ongoing expense, it’s normally a part of the reserves. Most resorts refurbish their units about every 5 years or so. It’s planned for.

   So if your letter states the special assessment is for refurbishing, you have to ask yourself, “What happened to the money I’ve been paying them all these years in maintenance fees?” Where is it? Is the Board of the homeowner’s association incompetent or maybe something worse? This is YOUR money they’re working with and they’re supposed to be able to handle it and account for it. If they’re not competent, it’s time to replace the Board of Directors of the homeowner’s association. And if there’s suspicion of theft, it’s time for a lawyer to get involved with a forensic accountant to go over the books.

So if it does happen, how much money should you be paying out? Well obviously that depends on what the problem is. But, again, this is where the beauty of timeshares come into play where you have a lot of people chipping in so no one in particular is going to get really hurt. Look at it this way. Let’s say you have a resort with 200 units. 200 units times 52 weeks per unit is 10,400 owners for the entire resort. If everyone were hit with a $200 special assessment, that’s over $2,000,000 coming in. It would have to be one unreal problem to cost that much money. So if you ever do get hit with an assessment, do a little quick math and make sure it looks like it adds up.

Thank you Irene, it really makes you wonder what the annual maintenance charges are actually used for?

That’s it for today, the next article will not be published now until Thursday, Inside Timeshare is travelling.

Friday’s Letter from America

Welcome to this weeks Letter from America, in this article which replaces the one scheduled, which we pulled once again at the last minute due to a very good response from the timeshare company, Irene Parker explains how US timeshare owners can file a complaint.

In Europe, Spain leads the way in protecting consumers of timeshare, we do understand that in the US, each state is responsible for their own laws, there seem to be no federal laws which govern the sale of timeshare. Europe has tried to unify how timeshare is sold, the unfortunate thing is that in many states the industry (with their large corporate law firms) have held sway.

Spain, which was one of the main areas where timeshare resorts were being developed, has suffered from the bad press associated with the industry. People being hijacked on the street while on holiday, bundled into taxis to endure hours of hard sell by unscrupulous sales agents. Although the blame must be on the sales and marketing companies,who paid only on results, commission only. Many start out okay, but the pressure to produce is enormous and an agent can be forced out by being given poor quality “ups” if they don’t produce.

The European Union developed a series of timeshare directives which each member state had to enact into domestic law, many have watered them down, Spain on the other hand decided that they needed to be strengthened and enacted Law 42/98.

This law came into force in January 1999, since then it has been strengthened by Law 4/12 along with the many Supreme Court rulings.

This now gives consumers more protection, no deposits within a 14 day cooling off period, no contract longer than 50 years, no points or floating weeks systems, with many other safeguards.

There are other laws which protect the consumer which are being used in the many cases coming before the courts, these include the civil consumer laws, mercantile law and by no means least, criminal law.

The way consumers are enticed to attend presentations has also been looked into, OPC’s are now regulated and licensed, unlike before. Infringements of the regulations can result in very severe penalties.

Timeshare in Europe has a very bad reputation because of the past, the original concept cannot be faulted, it is the greed around the sales that is to blame. We know this to be true due to the closing of many sales decks, with many of the sales agents now working for the “bogus” law firms and claims companies that are springing up on an almost daily basis.

Inside Timeshare is doing what it can to warn consumers of these companies, but as soon as we identify one there is another to replace it. Litigious Abogados is a great case in point, changing names every few months but the “scam” is the same.

It is only through the help of our readers that many of them are identified, as owners / members working together we will be able to protect the timeshare community.Now for this weeks Letter from America.

How to File a Timeshare Complaint (May 2018 revision)

Start with the Attorneys General Office

Timeshare Advocacy Group™

May 18, 2018

By Irene Parker

I have learned over the years that when one’s mind is made up, this diminishes fear; knowing what must be done does away with fear. Rosa Parks

Inside Timeshare received 425 US timeshare complaints as of May 16, 2018 (238 was the number of complaints reported as of our last revision 12/15/17). An escalation in the criminal nature of member allegations, especially those voiced by 45 active duty and retired military and law enforcement, led us to the FBI (9 members of the military/law enforcement reported allegations of timeshare fraud as of 12/15). Some fear they could lose their Security Clearances due to a foreclosure on their record. Active duty military feel this is a threat to our national security as just about anyone can get hired to sell timeshare points.

Members need to be especially vigilant about “Get you out of your timeshare” firms because many are scams. Timeshare Advocacy Group™ (TAG) has a scam research team formed by members who have themselves been scammed. Contact Inside Timeshare or one of the self-help groups listed below if you are contacted by someone you don’t know offering to help you get out of a timeshare.

This US Department of Justice timeshare scam report details the extent of the problem. Based on 425 complaints, our advocates feel the front of the timeshare sale contains a comparable level of criminal activity.  

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

Timeshare developers created the criminal cottage industry of transfer and exit scams by overreliance on the oral representation clause, iron clad developer based contracts, the lack of an adequate secondary market, and ingrained deception run amuck, according to reported complaints. The vast majority of our readers are highly professional, educated citizens with credit scores around 800 who have rarely been late paying a bill. Identical complaints, directed against the same sales agent, sometimes in cooperation with a manager or vice president, can establish a pattern of complaints.

It is one thing to say I am a sinner, but let someone else say that about me and then I feel it – I am up in arms. If I am falsely accused I may suffer, whereas if correction be found on even a small reality – something in me having deserved it – then often that hurts more. We must be happy that our faults are known as they are. Mother Teresa

With no way out if the timeshare company refuses to even acknowledge the deception, hiring a lawyer or foreclosure were the only options until real consumer advocates formed Timeshare Advocacy Group™ – bridging the gap between the developer and the member harmed. At times it felt like turning the Titanic, but closing gaps on social issues never comes easy and some causes take longer than a lifetime. Rosa Parks refused to sit at the back of the bus at great peril to her safety, but Rosa reached a decision that enough was enough and action was needed. It was a small action, but one that led to great changes. Educator and activist Parker Palmer explains: https://www.youtube.com/watch?v=fK0dXNK94BM

Almost all members have reported their timeshare company responded to their allegations of deceit with, “Sorry, you signed a contract” or “We are not responsible for what our sales agents say.” This knee jerk dismissal is backed up by some Attorneys General, via their timeshare divisions, responding the same. Unscrupulous timeshare sales agents realize this of course, so the hamster wheel of recycled inventory never ceases beginning with “It’s not a sales presentation.” If there is still truth in advertising, change needs to begin there.   

According to the FBI and to lawyers consulted, it is not legal to hide behind fine print, but it takes volumes of complaints to raise a regulator’s eyebrow. The Federal Trade Commission released its summary report of 2017 complaints listing travel, vacation, and timeshare as one of the most costly frauds at $1,710, although complaints we have received from members range from $25,000 to $400,000 or more. We wish members were only losing $1,710.   

Travel, vacation, and timeshare frauds were the most costly with people losing a median amount of $1,710. The FTC also broke out fraud losses for members of the military and found their median fraud loss to be 44 percent higher than the general population.

https://www.jacksonsun.com/story/opinion/columnists/2018/04/06/ftc-releases-2017-complaint-statistics/493425002/

According to the FBI,

White-collar 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).

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.

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

The FBI has advised our members, if the allegation involves credit card fraud, the member should also file a complaint with the Secret Service.

https://ask.metafilter.com/81136/Should-I-call-the-Secret-Service-over-credit-card-fraud

The two most common complaints reported:

  • The agent said I could easily sell my points
  • They said I could pay maintenance fees by charging purchases to a credit card, neglecting to add only about 1% of each purchase is credited to maintenance fees. Some fell for bogus maintenance fee relief programs. Already struggling, they buy more points.

How Advocacy Works

Timeshare Advocacy Group™ is organized into seven teams:

  1. Team 1 is our Reporting Team. Once the timeshare member has related their concern or grievance, the member submits their written complaint to the timeshare company. If ignored or the member receives a negative response, the complaint is forward to one of six advocates assigned to a specific regulatory or law enforcement agency. For example, Sheilah Brust is our go to person for the FBI and the Secret Service. http://insidetimeshare.com/tuesday-slot-irene-4/
  2. Team 2 is our Legislative Team. Members on this team reach out to sympathetic lawmakers to advocate for better disclosure. It would be nice to know that the timeshare you just bought for $100,000 had little or no secondary market the moment you signed the contract. TAG has received an alarming number of complaints from seniors 75 to 85 who have signed timeshare contracts for $100,000 or more. Not one of the 425 members reaching out to Inside Timeshare realized their timeshare in all likelihood could not be sold, even when costing as much as a house.
  3. Team 3 is our Military Team. We encourage anyone who has resolved their timeshare complaint as a result of our efforts to make a donation to Whistleblowers of America. WOA is a non-profit that seeks justice for active duty and veteran members of the military and government workers. WOA has supported our efforts by helping to distribute our articles. Our timeshare fraud report was presented as part of a Joint Committee on Veterans Affairs March 14, 2018.  https://whistleblowersofamerica.org/
  4.  Team 4 is our foreclosure support group. Facing cruel and relentless debt collection calls can be an overwhelming experience for anyone who has rarely been late on a bill, but for those who have recently lost a spouse the experience is devastating. Some members of this team have been through this and are determined to stay involved to fight Elder Fraud especially.
  5. Team 5 is our Scam Research team. This team consists of members who themselves have been scammed. There is a very dark side to this illegal industry. We are careful in our approach.
  6. Team 6 is our Media Team. Given state regulators backing up the timeshare company by responding, “You should not have relied on verbal representation” or “You have no proof” the Court of Public Opinion and Outcry is the only court open in some states.
  7. Team 7 is our Technology team.  We have a support staff of volunteers to assist those without access to a computer due to age, illness or disability. This team also provides YouTube production support.

Contact Inside Timeshare or email Irene Parker at [email protected] or call 270-303-7572 EST if you are interested in becoming a volunteer. Feel free to call any day of the week from 1:00 to 5:00 PM EST. It’s best to schedule a call. All calls and emails are returned within 24/48 hours.

Now it’s time to begin filling out the form. Before you begin, raise your right hand.

Do you promise to tell the truth, the whole truth, and nothing but the truth, so help you God? It is important to present your information factually and without opinion or inflammatory language.

Our advocates are not attorneys and we do not provide legal advice. We have researched regulatory agencies and are here to direct consumers to the appropriate regulatory and law enforcement agencies listed below. We have also developed media relationships and will continue to work with broadcast and print media to alert the general public as to what questions to ask before buying a timeshare. Life events can change your life in an instant or a day. If your timeshare provides no secondary market, it can make a member feel a hostage to their vacation plan. It’s a good idea to contact a member of the Licensed Timeshare Resale Broker Association to find out whether your timeshare has a secondary market. http://www.licensedtimeshareresalebrokers.org/

How to File a Timeshare Complaint

Name (s) and age of member

Phone Number

State of Residence

Member Number

For each contract in dispute:

Where Purchased and Date of Purchase

Number of Points Purchased

Sales Agent and Sales Agent ID# (if available)

Purchase Price

Amount Financed and Interest Rate

Current Loan Balance

Loan Number

Current Maintenance Fees

Name of Credit Card if one was used

What do you want? Do you seek Refund or Relinquishment?

Why? Is it due to Deception, Health, Age or Financial Burden?

If your investment is $40,000 or less and you owned and used your timeshare for ten years or more consider relinquishment. There can be no loan outstanding and maintenance fees need to be current.

Complaints expressing dissatisfaction with general availability will go unheeded as will a request based on not being able to afford the timeshare. You can’t go to your home mortgage lender and say you can’t afford it. The difference is you can sell your home. Your complaint should be filed with the FBI only if there are credible and serious allegations of deceit and bait and switch. If you feel you were deceived, list the reasons why.   

MOST IMPORTANT – Purchase Timeline

It is better to state your narrative as a narrative referring back to the contracts and figures at the top of your complaint. Begin with when you first became involved with the company and proceed chronologically. Keep your history brief up to the point when things began to go wrong.

After you complete your complaint, email it to the appropriate resort department or to TAG if you need help with your complaint. Expect to be denied. Typically your resort reviewer will restate your concerns, produce your initials and signatures, point out the oral representation clause and inform you, “If something was important to you, you should have asked for it to be put in the contract.” File a rebuttal if you disagree with their response.

Depending on the seriousness of your complaint, your advocate may forward your complaint to the firm’s public relations office or firm and to ARDA, the timeshare industries PAC, for violating ARDA’s Code of Ethics. ARDA’s Code of Ethics can be found on ARDA’s website.

We do not recommend owners make the voluntary opt in or opt out ARDA ROC contribution on your maintenance fee invoice. It is the opinion of our advocates that although ARDA lobbies for the industry and for timeshare members, when the issue at stake is one that is at odds with members, members lose because they have no voice. We also forward your complaint to the Association of Vacation Owners. AVO has been tracking our complaints for research purposes. http://insidetimeshare.com/the-tuesday-slot-with-irene-3/

Mark your email to the resort urgent if you are in financial distress. It is best to file a complaint before the debt collectors are hounding. The member will report back to us if the issue is resolved. Due to the required non-disclosure or mutual release form, terms and conditions will not be discussed.

The FBI complaint website is called IC3.gov which stands for Internet Crime. This is a bit confusing. IC is the name of the portal. That doesn’t mean it has to be an internet crime. We think they should have a white collar crime option to avoid this confusion. Click IC3 as your choice when filing. https://www.ic3.gov/default.aspx

Serious allegations of fraud should be reported orally by calling the FBI field office’s public access line available 24/7 (see Sheilah’s article). Sometimes your local field office will pay closer attention than say Las Vegas, where losing money is a tourist attraction. You can find your nearest field office from this website.

https://www.fbi.gov/contact-us/field-offices

The next step is to file a complaint first with the Attorneys General of the state where you signed your contract and where you live. It can take a month or more to hear back from an AG but once your complaint has been accepted, debt collectors are not allowed to call. You can find any Attorney General by searching the state name and Attorney General.

If there was an unauthorized credit card charge or account opened or you feel you were deceived into signing off on a loan, you should file with the Consumer Financial Protection Bureau under the mortgage option (even if no mortgage) and select the bank that financed your loan or issued a credit card. This is the organization that helped Wells Fargo victims. The CFPB lost power after the roll back of the Dodd Frank act March 2018. The Dodd Frank act was enacted after the abuses caused by subprime lending. The CFPB is still considered a regulator. https://www.consumerfinance.gov/

You should file a complaint with the state Real Estate Division in the state where the agent is licensed if your complaint is against a sales agent. Your advocate can help you find the agent’s ID number. Timeshare sales agents are real estate licensed in most states.

File a complaint with the Better Business Bureau. The company’s BBB rating can be misleading in that the BBB only rates how efficiently a company responds to complaints. Sometimes the BBB allows you to log in and file a rebuttal.  

Most important, consider reaching out to local or national media. Reporters look for content and are surprisingly easy to reach. Write an article about your experience. The more people who come forward, the more the public is made aware of timeshare black holes before engaging in a timeshare sales presentation.

Summary of Regulatory and Law Enforcement Agencies

  • The FBI at IC3.gov portal if you feel you were deceived by a bait and switch. For allegations of a serious nature also contact an FBI field office to file an oral tip. Have your facts and figures ready.
  • Attorneys General where you signed your contract. Most AG complaints can be filed online.
  • The Real Estate Division of the state where the agent is licensed if your complaint is against the agent.  
  • The media – the court of public opinion is often the only court available. Inside Timeshare, published in Spain, publishes timeshare articles online focusing primarily on the need for reform and oversight.
  • The Consumer Financial Protection Bureau under the mortgage option selecting the bank involved. Timeshare has dodged this regulatory bullet because most members don’t even know the identity of the lender as the timeshare company often services the loan. Timeshare companies are not an option from the CFPB’s drop-down menu.
  • The Federal Trade Commission
  • The Better Business Bureau
  • Lawmakers – The problem is the timeshare buyer typically does not buy in their state of residence which is why lawmakers don’t seem to take timeshare seriously. Still, any effort to contact lawmakers is encouraged.

If this sounds like work, it is, but you can file with some, all, or none of the agencies. We have a team of advocates who can answer questions and help guide you through the process. We feel “Action and Advocacy” is the way to change questionable timeshare business practices.  

If you are granted a positive outcome, you may not say or write anything disparaging about the resort, but there is no harm in staying involved by referring timeshare members who need help to Inside Timeshare or to one of the self-help groups listed below we know are not industry influenced.   

Who We Are and Why We Do This

Timeshare members contacting us are often struggling with maintenance fees and high interest rate loans. Venting on complaint sites has no effect whatsoever but an organized campaign to track complaints and report criminal activity has already born fruit in the form of Attorneys General settlements and a greater awareness.

If all else fails, we will refer to an attorney if the member can afford one. If you are forced into foreclosure, but have an otherwise unblemished credit report, you can write to the credit reporting agencies in an effort to explain why you were deceived and why you were not able to resolve your dispute.

I worked three years as a CASA supervisor, writing and editing court reports for Family Court on behalf of foster children. I find two commonalities between children of abuse, neglect or dependency and deceptive timeshare sales.

  1. The abnormal becomes the normal. After receiving 425 complaints, I fear deception is endorsed and encouraged by some timeshare companies. Of course not all sales agents are dishonest. Inside Timeshare endorses Disney Vacation Club because of their scarcity of complaints.
  2. Victims are silenced and isolated via non-disclosure agreements and arbitration. Buyers should opt out of arbitration immediately after signing a contract.   

There are many who use and enjoy their timeshare. My husband and I owned three timeshares for 25 years with no problems or complaints. After we attended a pathetically aggressive sales presentation in 2015, I began researching the industry, writing articles and assisting timeshare victims. My solo effort has grown to a network of 44 Advocates. We are not compensated. We are volunteers. We hope there will come a day our advocacy group is not needed.

Self-help groups seek to provide 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/timeshareadvocategroup/

http://tug2.net/

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

https://www.facebook.com/groups/180578055325962/

https://www.facebook.com/groups/465692163568779/

https://www.facebook.com/groups/1639958046252175/

May 18, 2018 Irene Parker Timeshare Advocacy GroupTM

 

That’s it for this week, the weekend once again beckons so join us again next week for more news and information on the world of timeshare.

Latest news just in from the Court of First Instance Number 3 Abona Tenerife.

The judge in a case against Diamond Resorts Tenerife Sales SL, has declared the clients contract null and void. The infringments are the points system which has been made illegal, the contract in perpetuity, when the law stipulates that it should be for a maximum of 50 years and the taking of deposits within the cooling of period, which is also illegal even by a third party.

The client will now receive a total of £44,790 which includes double the deposit illegally taken, the court also awarded legal interest.

The laws in Spain have been put into place and strengthened by the Supreme Court to protect consumers, they are having a profound affect on the industry, which for too long believed it was untouchable.