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MGM Muthu

Friday’s Letter From America

Welcome to this Friday’s Letter from America, first a recap on the past week.

On Monday we wished the National Timeshare Owners Association a happy anniversary. For 20 years this organisation has been the voice of US timeshare owners, it is a totally independent body, not governed by the industry. Greg Crist the CEO works very hard to create a dialogue with the industry, he believes as we do that without dialogue there can be no changing of attitudes.

We also warned about another new addition to the Litigious Abogados family, Abogados Amable & Garcia.

Their website http://www.abogadosamablegarcia.com/ is the same as all the others, except for new photographs of the so called “lawyers”, (probably just downloaded from the images on the web), even the names are variations of the others used. We have yet to see what the paperwork is like and what names appear on those and the emails, somehow we think the “Departmento Legal” will have the same ladies names as all the others.

Yesterday we publish the story about the legal action by the London law firm Edwin Coe, who are representing around 106 clients against Barclays Partner Finance. This case is being held at the High Court in London, it revolves around the issuing of loans for the sale of timeshare as an “investment” by Resort Properties / Silverpoint, with a claim of over £1.5 million.

This article has already prompted a huge response on both sides of the great lake.

On another matter, it would look like that MGM Muthu (formerly Petchy) are being very aggressive in chasing “arrears” in maintenance. Many of these that we are hearing about are those who believed they no longer owned as they “sold” years ago.

These demands are coming from “Customer Services” and signed by Luliia Sulovei. They threaten court action if they are not paid and also demand around £3000 plus the “arrears” to be paid for them to grant a surrender. Most of those contacting Inside Timeshare are elderly and some are widows. This is not a nice situation and in our view amounts to bullying and extortion!

extortion

We will be publishing a full article on this in the next week or so.

Now, on with this weeks Letter from America.

Don and Irene are making their way back home today from Arizona. Irene met many new and old Diamond Advocacy Group friends during her stay and two baby rattlesnakes. (These may have been trainee sales agents). Irene has a degree in biology and said she used to teach a class on reptiles. Irene says she likes snakes and alligators (you would need to to survive a timeshare presentation). Yes, they were rattling.

Irene would like to thank Diamond CEO Michael Flaskey, intervening on behalf of the ailing pool table at Spoke and Wheel restaurant at Los Abrigados in Sedona. Kyli, the restaurant manager, contacted Irene informing her that the antique Brunswick pool table (and I thought Brunswick only made pin spotters) is to be restored to its original glory and another manager, that same day, went out and purchased additional pool sticks (we call them cues). Don and Irene ate at the restaurant. The food was superb. While dining, the Diamond Advocacy Group gained a new member. Many of the guests staying at Los Abrigados are original ILX owners. Now they are Diamond members.

Eron Grant is not a pool table, but she hopes Mr. Flaskey will show her family the same compassion.

Diamond Resorts was a Huge Mistake!

Good choice

By Eron Grant

May 12, 2017

I have asked Inside Timeshare to publish an account of our experience with Diamond Resorts. We hope to warn others to not fall victim to high pressure same day sales and encourage readers to become involved with our Diamond Advocacy Group before buying something they will live to regret later.

We seek to provide Diamond Resort members a way to proactively address membership concerns; to advocate for timeshare reform; to obtain greater disclosure from the company; to advocate for a viable secondary market; and to educate prospective buyers.

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

Many Diamond members are happy with their Diamond membership. I believe if sold properly, Diamond’s vacation program could be of benefit to some families. In our case the program was grossly oversold in terms of availability. The Diamond program will not work for us as we have all the basic timeshare benefits we need as Marriott timeshare owners.

Here’s what happened

We stayed at Diamond’s resort, The Ridge in Sedona Arizona, over Thanksgiving 2016. We booked our stay through Interval International. At the time, I had not heard of Diamond Resorts.

I called the concierge at The Ridge to ask for restaurant recommendations. She said she would get back to me. I thought it odd that a concierge needed to get back to a guest about restaurant reservations.

Later that day the concierge called back asking if anyone had scheduled us for a presentation with a DRI team member. She told me about a few restaurants she thought we would enjoy, adding that Diamond would give us a $150 gift card if we agreed to attend a 90 minute sales presentation. We agreed.

When we arrived we told the sales representative, Karen Calvano, we had a tee time scheduled in a few hours. She seemed irritated and said we would not be finished in that amount of time. Puzzled, we told her the concierge told us the meeting would only take 90 minutes. She wanted to know who told us that. She complained about the tee time when we followed her to the presentation area. She kept saying that she felt rushed going through the presentation. The presentation lasted six hours.

Ms. Calvano told us that Diamond owns numerous properties and that finding something in our local Texas area would not be a problem. We specifically asked about Texas and Louisiana because we are both working and with the kids, we can’t easily fly to take vacations due to the expense and trouble flying entails. We did say we could drive to New Mexico to ski with our kids, and added that we wanted to stay at Great Wolf Lodge.

We agreed to purchase 3500 Diamond points. When I tried to book Great Wolf Lodge, I learned it would take approximately $11,000 in equivalent DRI maintenance fee dollars to stay one week at Great Wolf Lodge when it could be booked online for $3,300. The same holds true for New York City and other big cities because Diamond does not own these properties. They are “affiliated” properties so never discounted.

I recently got in contact with another Diamond member on our DRI Advocacy Facebook group who reported an almost identical complaint. According to a DRI customer service representative, the only property available near Boston was Great Wolf Lodge Fitchburg.

The Fitchburg property was available August 14 – Aug 18 for 16,000 points.

Diamond only had availability for a Deluxe Queen.

Searching the Great Wolf Lodge Fitchburg site directly, Great Wolf had availability for a Wolf Pup Den for four nights for $1429.96 plus 270.31 tax totaling $1700.27.  At $.23 per point DRI maintenance fees, this equals $3,680 in equivalent maintenance fee dollars so $3,680 for the same property, the same week, could be booked directly with Great Wolf for $1700.

Back to our Diamond experience

Ms. Calvano told us we would be assigned the Platinum loyalty level due to being Marriott members. We own a three bedroom Marriott timeshare in Fort Lauderdale, Florida. Therefore, Ms. Calvano said we could book a studio room and upgrade three times at no additional fee. Later we were told this was not true.

As we were leaving, Ms. Calavano said to contact her at any time if we had questions or needed anything at all. I emailed her on December 1, 2016 with a question but never heard back.  

In December 2016 Linda Barton, Member Marketing Agent called us and asked to attend an “orientation for new members”. She said we would learn all about our new membership, and told us to be sure to bring our tablet given to us by DRI. The orientation took place January 13-15, 2017. It was called a Diamond “Once in a Lifetime Event” in Orlando, FL. My husband had asked what this event of a lifetime entailed. He was told we would learn all about our new membership and possible upgrades. “But we just purchased our membership! We are not going to spend any more money,” my husband informed Ms. Barton.

Looking back, we should have suspected the orientation would end up a sales presentation. At the orientation the sales representative, Chris, told us we would only be allowed to upgrade one time at no extra fee. This contradicted what Karen Calvano had initially told us.

Chris said at the orientation we could sell our points back for 30 cents per point if we were platinum, but the brochure we had been provided said it was 10 cents per point. When my husband asked Chris to show us on paper where it said $.30 cents per point, Chris pointed to his handwritten notes to show us where he had written that number down. My husband demanded he show us somewhere in the DRI paraphernalia where it said points could be sold back for $.30 per point, but Chris said, “Never mind if you’re not interested. I don’t want you to have hard feelings.”

Next, we were handed over to another DRI employee who repeatedly said, “I am not sales.” He then proceeded to encourage us to purchase more points, because we could get them at a low cost of $4 something per point which, according to him, was unheard of. The fee to purchase the additional points was over $3,000 with another $4,000 something due in a year or so after that. We turned it down. This ordeal took over 3 hours.

We contacted the Diamond Resorts Advocacy Group at Diamond that promises “to assist Diamond member from Day One should a member have questions or concerns about their purchase!”

Diamond refused to cancel our contract. We filed a complaint with the Arizona Attorney General after learning Diamond had been issued an “Assurance of Discontinuance” as a result of over 400 complaints filed against the company just in Arizona. Diamond automatically denied our claim, but after filing a rebuttal the Arizona AG said we are eligible for consideration.

In response to the Arizona AG action, Diamond has introduced a new program called Clarity that is about Accountability, Transparency and RESPECT for the customer. As far as we are concerned, nothing could be farther from the truth.

Here’s a bit of information about one of our local Texas businesses owned by Jim McIngvale. Mr. McIngvale has owned Mattress Mack since 1981. It is a hugely successful business in Houston.  

Gallery Furniture believes in being on the right side, in other words, to be on the Gallery Furniture customers’ side instead of defending the industry. Advocate for the customers! Gallery Furniture makes it very clear, that we’re here for the Gallery Furniture customers, to better their lives with high quality furniture sold at the best price possible, not to pad the pockets of our manufacturers. Come out to Gallery Furniture TODAY for the best customer service in the business… (August, 2015):

http://www.mattressmack.com/macks_weblog/satisfied-customers/

Mr. McIngvale can be booked for speaking engagements.

Customer care

Perhaps Diamond would like to book him soon?

Thank you Eron for your contribution and another thank you to Irene Parker for coordinating it from the States.

Inside Timeshare welcomes contributions outlining your experiences, it helps other to know that they are not alone. Together you can influence the industry, changing the way they view the owners / members, along with the NTOA, the advocacy facebook pages and this publication you do have a voice. The industry is taking note, we know that for a fact, it is just a matter of time before they actually implement real changes.

All it leaves us to say is we hope that Irene and Don have a safe journey home from vacation, that all of you have a great weekend.

weekend cat

 

The 3 R’s of Timeshare: Part 1

Today we start with the first of a three part article on what Irene calls the 3 R’s of Timeshare, although this first part begins with “F”.

In the US this is Foreclosure, which to those of us in Europe would just be Relinquishment or Surrender. What we have to remember in Europe is that for our American cousins, timeshare tends to be governed by Real Estate Law and financial agreements are usually associated with a mortgage rather than a personal loan or finance agreement. So foreclosure will be similar to repossession of your house for not keeping up with mortgage payments. Failure to keep up payment on a loan does not result in the timeshare being “repossessed”, as the finance is separate from the timeshare.

As for relinquishing or surrendering your timeshare in Europe, this very much depends on who you purchased with, some companies are better than others.

As a very good example of the bad, we only have to look at MacDonald Resorts, this particular company has been the subject of many press articles, including some published here on Inside Timeshare. This company is renowned for not allowing people out of their contracts even after death, so this means the children inherit the timeshare and the subsequent maintenance bills.

A very good case which Inside Timeshare has been working on is that of Mrs B, an 87 year old lady in ill health, who used a company to relinquish her contract. This was done by selling to a third party, MacDonalds refuse to accept this, stating they do not recognise the transfer, even though we have notary documents proving the transfer. Consequently they are pursuing Mrs B for arrears in maintenance, passing the debt onto a debt collecting agency who are threatening court action if it is not paid. Inside Timeshare is now lodging a formal complaint to the Financial Conduct Authority as the debt is “under dispute” and should not be chased by the agency.

This company also “offers” a limited number of members to hand in their timeshares every couple of years, but only on the payment of 4 years maintenance fees.

Another company that is renowned for being very difficult to get out of is Petchey Leisure, now owned by MGM Muthu. As far as they are concerned your contract is in perpetuity and that means never ending, so even your grandchildren will end up with the maintenance bills.

Diamond Resorts in Europe on the other hand seem to be getting their act together, for several years now they have allowed any member over 75 to hand back their membership. They also allow others to hand back in what they term as “exceptional circumstances”. These are the death of a partner, illness and financial difficulties. For those who do not fall into these categories they will allow surrender on payment of upto 3 years maintenance fees.

So now on with Irene’s Article.

The 3 Rs or F of Timeshare:

Part I Resolution, Relinquishment, Refund or Foreclosure

What will happen when you decide your timeshare decision was a mistake?

Part II: The 3Rs of Timeshare

Part III: 2 More Rs  – Timeshare Rentals and Resales

By Irene Parker March 28 

Contract picture

Except for failure to pay child support, there is no debtor’s prison. Anyone feeling desperate, angry, worried, ashamed or scared about their timeshare situation can rest assured they can put their timeshare troubles behind them through the 3 Rs or F of Timeshare.

The words I used above are how I describe timeshare members who have reached out to Inside Timeshare or to me through our Advocacy Facebook Page, burdened by high interest loan payments and rising maintenance fees. Our goal is to convert this owner into an informed and empowered owner.

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

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

Often, life without timeshare can be achieved without legal assistance, but we have a crew of able bodied lawyers there if you need them as a last resort. Advocacy works but has its limitations. All of our Advocates are unpaid, helping individual timeshare owners and members while working towards timeshare reform.

Last week we quoted Mr. Nusbaum’s feelings about the secondary market. Mr. Nusbaum is President and CEO of ARDA, the timeshare developer lobby.

“This is a legacy problem. People buying a timeshare today are buying it from multisite clubs that have management forever and sales teams forever, so the ability to recycle inventory will not be a problem in the future.”  June 2014 RedWeek

On the other hand, here is another Nusbaum quote from the same article sounding somewhat contradictory:

“The developer community is not without some dirt under their nails in this. We’ve created a business model that needs recycling. We want to help the secondary market. For self-perpetuity, it’s insane not to have a healthy secondary market.”

But most of all, according to Nusbaum, the long-term outlook is improving because the largest timeshare companies are developing programs that offer exit strategies for their owners. The complete RedWeek article:

https://www.redweek.com/resources/ask-redweek/timeshare-resales-arda-predictions

“Exit strategies” are voluntary surrender programs. Requests are evaluated case by case. It is difficult to determine how many requests are granted compared to the number of requests overall. Are these programs just media window dressing to make it look like the industry is responding?

Michael Kosor has worked with Nevada Senator Becky Harris in an effort to propose legislation that would allow better disclosure as to the limited, or sometimes non-existent, secondary market.  

“Actions by the timeshare industry, regulators, and legislators, are analogies to firefighters rescuing the elderly trapped in a burning building. Until the cause of the fire is identified, consumers will continue to be lured into these burning (defective) timeshare products that are not supported by a secondary market. While I applaud the rescue, we should not allow the industry and those responsible for consumer protection to hide behind said rescue efforts while they inexplicably fan the flames. Ambulance chasing fraudulent transfer agents is a back-ended solution – a Band-Aid reaction.”

Treating symptoms without studying the cause can be problematic for medicine or timeshare. The cause in the case of timeshare is the active destruction of the resale market for the benefit of immediate developer profits.

“Where are the association Boards we elected to represent our timeshare interests”?

“Owners clearly would like to see more done to advance and advocate for an improved resale market,” continues Michael. “Why is it our advocacy group is the only voice in this discussion? With the exception of a few legacy associations, virtually none of the industry affiliated associations have an active resale program available to owners to assist in exit and preclude foreclosure, if a voluntary surrender is denied”.

I approached my association a few years ago, the Wyndham Grand Desert, and was told “this was not their responsibility.” Instead, my (and most all) associations’ leaders throw owners wishing to exit (which we all do eventually) to the wolves of the current resale environment or transfer agents. They then enter into very lucrative repurchase contracts with and for the developers. These repurchase contracts provide the association pennies on the dollar of outstanding assessments, then give the developer very low cost inventory to sell as new to the next owner.

The real issue is not merely failing to fix the resale market. Worse, the industry is actively working to build the recycle model which requires the intentional undermining of the resale market. Advocate owners and members understand the cause and the fact the industry has no desire to fix the problem. It’s sad that we as advocates have to educate and walk the elderly, the ill and those burdened financially, through the foreclosure process when all else fails.

The developers consider themselves benevolent when they allow the surrender of a $25,000 to over $100,000 vacation plan in exchange for a surrender of zero value. As long as the vacation points or weeks stay in the hands of the developer, there is no free market system. Lenin would be proud.

Back to the 3Rs or F of Timeshare

We want to avoid the F for foreclosure, but for some owners there is no choice.

Let’s get this last and most unpleasant option out of the way so we can focus on more positive outcomes.

Where do we start? Pull out all those documents and start digging!

Magnify

I hear a lot of “I think” or “I’m not sure” when I ask the following questions:

  • When did you first buy your timeshare?
  • Where did you buy your timeshare?
  • How many points do you own?
  • What was the sales agent’s name?
  • What interest rate are you paying if you have a loan?
  • What do you want to happen?

We begin at the end – Foreclosure

If a member has an otherwise unblemished credit score, he or she can work to have the reason for foreclosure added to a credit report.  I asked timeshare attorney Mike Finn of the Finn Law Group some questions about the foreclosure process.  We use one unnamed resort as an example, but the procedure is similar to all timeshare companies. A common question is:

Will the timeshare company try to ruin my credit for non- payment of maintenance fees loans or both?

Mike Finn: Generally no credit reporting on maintenance fees, yes they do on “mortgage” payments. Most timeshare property owner associations, which are separate non-profit entities, do not report non-payment of maintenance fees largely because they don’t maintain subscriber contracts with the credit reporting agencies. However, once referred to collection, those agencies do maintain subscriber relationships and that’s where the issue becomes relevant.

Can or will members be taken to court for non-payment of maintenance fees loans or both?

Mike: Can yes, will, maybe not so much

Do they place liens for non-payment of loans?

Mike: Yes in the sense that they do pursue foreclosures, yes for maintenance fees as well.

Do they place the lien just on the timeshare? In other words, does the lien apply just to the timeshare, or does the lien apply to a member’s primary residence as well?

Mike: The word ‘lien’ can be utilized in more than one way. In the timeshare world it typically means the security interest filed against the timeshare itself by virtue of nonpayment of maintenance fees. Only the timeshare interest itself is impacted by that kind of lien, not the owner’s property beyond the timeshare. A mortgage lien on the timeshare caused by non-payment of the initial purchase price can, under certain circumstances, become a judgment which could be satisfied by going after the defaulting party’s personal assets. This very rarely happens, but it has happened, so we can never, say never.

Is it advisable to just stop paying fees without the aid of an attorney?

Mike: It really does depend on your ability to endure collection calls, letters threats, and a foreclosure on your credit report is quite damning, it will make refinancing or new residential purchases an issue for about 5 years. Rarely will they sue for deficiency balance.

http://www.finnlawgroup.com/learning-center/can-a-timeshare-hurt-my-credit-score

http://www.finnlawgroup.com/english/learning-center/page-12

According to Charles Thomas, here is how it works in Europe

This resort employs a debt collection agency, one they use is called Daniels Silverman, the debt is passed on to them (usually sold), they now own the debt and will threaten court action – whether they will is another matter. If this does occur, then yes credit rating will be affected as it will then be a County Court Judgement and failure to pay will result with the court bailiffs being sent in to recover either cash or goods to the value. Only they have the right of entry into the home.

As for a loan, if it is with a third party i.e. Barclays Partner Finance, any failure to keep up payments will result in County Court action as above and credit blacklisting.

It is advisable to seek advice from an attorney before just stopping any payments, as by doing this the debt cannot be passed on to an agency as under the Financial Conduct Authority regulations. The debt can be classified as “under dispute”.

According to the Canarian Legal Alliance CLA, when the firm takes on a relinquishment with a loan attached, they also try to have the loan agreement cancelled.

It is advisable to completely check any company that offers relinquishment services, as this is an area which is fraught with con artists.

Below is our Inside Timeshare article on debt collection with links to various authorities, it also includes a list of those resorts who employ debt collectors and a list of those who have taken people to court.

As Charles Thomas reported, Europe maintains a thriving timeshare foreclosure and collection industry as well.

http://insidetimeshare.com/maintenance-arrears-debt-collectors/

Our Advocates, relying on their experience and expertise, are here to evaluate and work together, each bringing a piece of the puzzle to help you find your answer.

Conference table

Next week we continue with Part II – The 3Rs of Timeshare:

Resolution, Relinquishment, Refund

Part III – The 2Rs of Timeshare – Rentals and Resales

Contact us today if you would like to share your story or work with us by becoming a Timeshare Advocate.

http://insidetimeshare.com/friday-letter-america/

Thanks to Irene, Mike Finn and Michael Kosor for their contribution.

As you already know as owners of timeshare, whether in Europe or across the “Great Lake” in the US, once you purchase timeshare, getting out of it is fraught with obstacles. It does depend on who you own with, some are better than others. In Europe, Spain is leading the way with timeshare law, it is giving “consumers” more protection, making it easier to get out.

Inside Timeshare hopes these articles are of benefit to you the owners, that only through coming together and sharing information can we hope for any change in the industry.

If you have any questions or want to share your experience contact Inside Timeshare or join the Advocacy FB page.