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Westgate Resorts

Friday’s Letter from America: Exit Industry on Trial.

Welcome to this week’s edition of Letter from America, today our regular contributor Irene Parker and the story on the legal battle between Westgate Resorts and Timeshare Exit Team. The number of “exit” companies coming into existence has rattled the industry, not just in the US but also in Europe, all as a result of the industry making it very hard or almost impossible to terminate a contract and membership. So is the industry to blame for creating a problem in the first place?

Westgate Resorts v Timeshare Exit Team – Settled

Case 6:18-cv-01088-GAP-DCI

http://flowjournal.org/wp-content/uploads/2013/10/Image-1-The-Queen-of-Versailles.png

The Queen of Versailles Mansion built by Westgate’s Founder

By Irene Parker

July 16, 2021

The jury trial of Westgate Resorts v Timeshare Exit Team (TET), filed July 9, 2018, was scheduled to begin Tuesday, July 13, 2021. I had intended to attend the trial, but the parties settled. Settlement terms are confidential and neither side will comment on the outcome. 

The crux of the argument was whether TET and their agents instructed or influenced owners to stop making payments. Also at issue was whether TET violated the Florida Deceptive and Unfair Trade Practices Act. Westgate sought to recover the balances on the unpaid mortgage and maintenance and tax fees caused by TET’s alleged interference. 

TET contended that as agents of their customers, they were privileged to interfere with Westgate contracts. According to the standard federal jury instructions, if a jury finds that a third party gave honest advice and that it was in a timeshare owner’s best interest to breach a timeshare contract, then the third party cannot be held liable for tortiously interfering with the timeshare contract.

Timeshare Wars

Given the volume of lawsuits that have been filed against exit providers, including attorneys and law firms, what seems to really be on trial is the legitimacy of the exit industry. Should disgruntled or desperate members be allowed to have professionals help them try to extract them from a timeshare? 

Making the wrong decision to buy a timeshare can be devastating. Westgate’s corporate representative in court documents stated that Westgate’s current default rate is approximately 30%. A timeshare contract typically exists in perpetuity, with little to no secondary market. Unaffordability is exacerbated by an interest rate typically financed at the highest rate allowed, 17.99%. 

The resale market for timeshare properties is almost nonexistent. An example provided in court documents showed the median purchase price of a timeshare in Osceola County in 2016 was $22,990. The average resale price, two years later, was approximately $10. 

What Happens When a Westgate Owner Defaults?

According to Joint Pre-Trial Statements – not much happens. 

Out of 621 original owners, Westgate only brought foreclosure proceedings against 244 accounts. Of the 86 remaining owners, only four testified they were foreclosed. With respect to the 86 owners Westgate decided to foreclose upon, none testified that their credit was damaged as a result of nonjudicial foreclosure, or were aware of any such impact. Westgate had not sought deficiency judgments as a matter of policy and is not entitled to under Florida law and the law of almost every state. 

Westgate could change its policy to pursue judicial foreclosure and seek deficiency judgments. This would allow them to place liens on real property or garnish wages, etc. 

Nonjudicial foreclosure is quicker and costs less than judicial foreclosure. Non-deeded points, rapidly replacing deeded timeshares, are not eligible for judicial foreclosure. The buyer is a “member” with no beneficial interest in real property. However, that member could be sued for the balance due on a promissory note.  

ARDA-ROC encourages judicial foreclosure according to letterhead minutes of the April 10, 2019 ARDA-ROC meeting at ARDA’s World annual conference. ROC stands for Resort Owners Coalition, the Owners’ advocacy arm of the timeshare industry lobby. Kenneth McKelvey is Chairman of ARDA-ROC.

“The best thing we can do with exit (is) judicial foreclosure, ruin the credit and enforce the contract,” McKelvey said. 

This is in contrast to how Mr. McKelvey testified at a Florida legislative workshop March 12, 2019: 

“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….” 

Reports from Westgate owners 

Out of 18 Westgate owners who contacted me or another volunteer as this lawsuit worked its way to trial, only five were able to exit their timeshare. Several had no outstanding loan. I advised one couple, both diagnosed with cancer, to contact Westgate’s Legacy Department via ARDA’s Responsible Exit website. They reported back that the Legacy representative transferred them to a supervisor who informed them, “We don’t take timeshares back and that’s not our website.” I told them about this lawsuit. They reached out to one of the attorneys involved after we discovered a Resort Trades article that listed Westgate as a founder of ARDA’s Responsible Exit program. This couple was ultimately able to relinquish their timeshare. 

Another owner, aged 90, and his wife, are currently in default because Westgate contested their paying the broker who found a buyer his $800 commission.  

The Queen of Versailles and Property Man     

My intended retirement to move to Florida and return to my first occupational love, teaching piano lessons, was disrupted in July of 2015 when I turned on the television at a resort in Orlando and saw the Queen of Versailles mansion pictured above. The show was Property Man on FOX, hosted by the late Las Vegas attorney Bob Massi, who sadly died of cancer in 2019.  The Queen of Versailles is a documentary about Westgate owners, David and Jackie Siegel’s palatial 90,000 square foot home. The documentary took Best Director at Sundance one year

I had just endured a pathetic sales presentation experience. I wrote to Mr. Massi about my experience. Remarkably, a FOX producer responded asking if I would be willing to be interviewed. The producer said the show had not intended to be about timeshare, but they were flooded with timeshare complaints. Not wanting to appear on national television unprepared, I began what has turned into a seven year effort to alert potential timeshare buyers as to the pitfalls that can occur when not enough due diligence goes into the decision to buy a timeshare. 

Timeshare resale brokers I’ve spoken with, who charge no money upfront to list a timeshare, refuse Westgate listings due to obstacles they say are placed in their way. Resorts that do not allow a secondary market breed generations who want nothing to do with timeshare after hearing parents and grandparents bemoan their difficulty relinquishing a burdensome timeshare.  

TIMESHARE TALKS is an interactive YouTube forum launched to promote a secondary market and educate the consumer as to the need to comparison shop by calling a legitimate timeshare resale broker before buying a timeshare. John Kushman is a broker with Timeshare Specialists.  John was also interviewed by Bob Massi in a segment that aired prior to mine. John’s website lists nearly 150 timeshare resale scams, with an impressive amount of timeshare crime intelligence gathering. Organized crime rings instruct unsuspecting timeshare owners to wire money to Mexico, the Dominican Republic or Hong Kong. 

https://tarda.org/f/timeshare-specialists%E2%80%99-timeshare-exit-scam-hotline

The exit industry for primary residences is called realtors, and in cars, used car dealers. Stifling the secondary market and silencing the known exit-providing players via thousands of billable hours gives rise to boiler rooms with common-sounding names. TET produced 1,071,751 customer documents concerning an initial 2,069 Westgate accounts. 

Should anyone buy a timeshare if it can lead to financial ruin?

If developers begin to attach personal assets and garnish wages, how can it be prudent to ever buy a timeshare? If an adverse life event happens over the life of a 17.99% loan, or maybe the owner just doesn’t want it anymore, lives could be financially ruined. Clearly, the goal needs to be consumer awareness if the industry moves in this direction.      

Bankruptcy may be of no salvation. According to one attorney, since timeshares have virtually no resale value, it could be deemed an “abandoned asset” so not liquidated. After seven years of bankruptcy protection, the unfortunate timeshare owner learns that they have NOT been foreclosed and receives a bill for seven years of maintenance fees and the loan balance, with late fees. This actually happened to one timeshare owner in California.      

If a timeshare default is the only credit report black mark, and the lender is informed as to why the member defaulted, especially if experiencing unfair and deceptive practices, the lender may be sympathetic. This too has happened. 

The bottom line – If aggressive collection tactics ensue, don’t buy a timeshare unless you pay cash, but know that if a cash buyer later learns they were duped, a refund is more difficult to negotiate than a loan cancellation. Instead of media spin about there being no problems in this industry, issues should be addressed and a secondary market is necessary for the health of the industry and the consumer. 

Related articles:      

The Dashiell’s article

http://insidetimeshare.com/the-tuesday-slot-7/

Thank you Irene for this week’s article, as usual, you have covered and explained the main points for our many readers, one thing is very clear from this article, it is the timeshare owner who once again is stuck in the middle!

That is all for this week, have a great weekend and join us again next week. 

Start the Week: Military Veterans Article Comments Begin & Latest Anfi Appeals Dismissed

Welcome to the start of another week with Inside Timeshare, on Friday we published the article A New Friday Letter From America: Veteran & Active Duty Service Member Outreach the replies and comments have already started. Today we publish a small example of the comments so far received. We also look at the latest from the High Court of Las Palmas, Gran Canaria, once again this court is dismissing appeals lodged by Anfi after losing in the Court of First Instance. This does make you wonder what Anfi are playing at.

Although the article has been live for only 2 days, we are already receiving comments from veterans who have very similar stories, we have also received emails from members of Hilton Grand Vacations, (HGV) and Westgate who have had similar experiences as Diamond members.

The article is about Adam’s experience with Diamond, but we welcome and ask all Veterans to submit their stories regardless of which timeshare developer they have dealt with. This is not just a problem about Diamond, but one that needs to be addressed by the timeshare industry as a whole.

Below are just a few of the emails received so far, we have only published the content and not identified them by name:

HGV Veteran

I came across your article in a Diamond Resorts FB group.  My husband served twenty-eight years in the Army and retired in 2011.  Never in all our years would we think we would fall victim to the scam of a Hilton Timeshare salesperson. 

Diamond Veteran

I am three-quarters of the way out the door from just walking away from Diamond Resorts. I am extremely upset that they made no adjustment/refund of maintenance fees since Diamond vacations have been unavailable due to covid for a year now.

Since airlines shut down, the government ordered, and still has ordered us to stay home and stay healthy,  airlines shut down, Diamond shut down resorts, and travel was and is unsafe, I have asked Diamond to refund maintenance fees as the right thing to do.   It is “unjust enrichment” under consumer protection laws (UCC) to price gouge owners for full maintenance fees when Diamond could not provide the contracted vacations.  Other unscrupulous businesses have been fined and forced to repay overpricing during the covid pandemic.

I am a veteran and last year there was the latest bunch of lies from Diamond. I was promised that Diamond would announce during 2020 that they were going to buy back my points. But I had to buy 20,000 more points for $55,000 to provide Diamond money to be able to buy my points!  I guess they think I am stupid. I asked them to put it in writing, but they could not do that and I was also not to say anything about the buyback program in the QC or follow-ups as it “was a secret”.   More lies.

HGV Veteran

This issue isn’t simply with Diamond! HGV sales reps were incredibly aggressive and lied every step of the way to get us to sign. They were incredibly aggressive and deceptive.  Hilton encourages and rewards sales agents who lie, is alarming. It is my understanding that this isn’t exclusive to HGV. I am learning that the entire industry is tarnished and deceptive.

Westgate

This is absolutely appalling and I do not understand how this continues.  Why aren’t the sales reps held accountable for what they are telling people?  It is out of control and Westgate Resorts likes to stand behind “unfortunately it is not possible to validate verbal communications she may have had with the sales agent”.  Almost as if the sales team is not part of the company and they have no power over what sales are telling people. 

If the Timeshare Companies truly cared about their owners and were honest from the beginning the exit companies would not be feeding on countless unhappy owners. Yet the Timeshare companies are trying to look like heroes by taking those exit companies to court.  They are not fooling me, they need to spend that money on keeping the owners happy and informed of the truth.

It also appears that it is not just veterans that have serious issues with their timeshare sales, this next comment is from a Front-line Covid Nurse.

I am not a veteran. I am a front-line Covid nurse, but I think nurses need to do the same as Adam. I have contracted Covid and recovered. I was sick for almost two months. I recently got my taste and smell back. I am fully vaccinated but still have to maintain full protection because there is no guarantee that I cannot still contract Covid and give it to someone else. I still care for Covid patients.   

My mother gave me 10,000 Diamond points in 2019. I have never used the points. I attended an orientation at Hyatt Place Hendersonville near Nashville to learn how to use the points. As a result of attending the orientation, I am financially ruined. I was told that I could get 5000 more points for $4,500. I was shown on a tablet where I signed $4,500. The only paperwork I was given stated $4,500 which was the amount charged to a Barclaycard. I was 24 when I purchased the points. After I finish my graduate nursing program I will have about $75,000 or more in student loans. I asked about a hard copy of the contract. They said the contract was on the tablet but I never received the tablet that was used to sign the contract. The contract came about two weeks later, with no postmark date. Imagine my shock when I saw there was a $40,000 loan. NO WAY would I have bought $40,000 in vacation points. My credit has gone down 200 points. I cannot buy a house or car.

I reached out to Diamond as Flaskey suggests Diamond members do. Diamond records the closing/signing session. I asked if the contract was just for $4,500. They said yes. They said the actual contract would be mailed. Diamond denied my request to cancel the loan. I received a call from a Diamond representative. She suggested I talk to customer service or a Hospitality team. I did and I emailed the complaint below. In September of 2020, I spoke to Kathy in customer service. She suggested I request a mutual release by emailing Financial Services. I did that too. No one has responded.

I am writing to warn others about how something like buying timeshare points for a vacation can be the worst financial mistake of your life.

Just on these few comments alone, we can see there is a very serious problem with how timeshare developers allow their “sales agents” to behave. We all know the Diamond response, “We are not responsible for what sales agents say at presentations”. A very lame excuse if ever I heard one, it is just an excuse to deny any responsibility on behalf of Diamond.

If you have been victims of these practices no matter which timeshare developer, please contact us and Adam Siler at the following email:

[email protected]

We now move to the latest from the High Court of Las Palmas, Gran Canaria.

The High Court of Las Palmas Gran Canaria

News reached us last week of several appeals made by Anfi against rulings from the Court of First Instance, as we know Anfi appeals to the High Court on every ruling made by the lower courts. We also know that in each and every case the High Court dismisses the appeal and confirms the original sentence. The case is then returned to the Court of First Instance for execution of the sentence.

The full stories of these cases will be published in another article, but we do have to ask the question, why does Anfi persist in lodging these frivolous appeals?

As we have seen, on every occasion the High Court dismisses and rejects their appeal, we suspect that Anfi is just attempting to delay the inevitable and to cause as much stress to the clients as possible. 

We also know and it is no secret that the Anfi Group, under the control of the Cazorla Group is in serious financial difficulties, but they cannot avoid paying what the courts have demanded. Delaying these payments just costs them more, not just in paying the legal fees for the appeal and their own lawyers, but also in the increased amounts which the courts are subsequently imposing. This also includes the legal interest which is paid on the amount awarded by the court from the moment the case is accepted. So the longer they delay. The more they have to pay.

This tactic by Anfi is not just depleting their already serious financial difficulties, but it doesn’t do their already damaged reputation any good whatsoever.

When will Anfi see sense and just pay when the courts demand it, taking a leaf out of the book of Palm Oasis and Marriott.

Just from what we have published today, it is very clear the timeshare industry is one of the very worst for the way it is sold and also the way it treats its members. These members have paid huge amounts on the basis of lies made by sales agents, yet the companies involved do everything they can to ensure they do not pay or be held accountable.

In the case of Anfi that is being remedied by the authorities, The Provincial Prosecutors Office of Gran Canaria are currently involved with an investigation into Anfi, it involves the attempts to deny payments by the courts, the movement of funds from accounts to avoid embargoes among other things.

As for our friends in the US, they have a long way to go before they see anything like the protections consumers have in Spain.

If you have any comments on this or any other article or would like to know your own legal position with your timeshare, please use our contact page and Inside Timeshare will get back to you

For our US friends, if you are a Veteran or Serving Military and have had similar experience, please use [email protected].

Legal News From the US: Castle Law Group PC v Timeshare Developers

Today Irene Parker gives us an insight into one lawsuit that has made the headlines in the US, it would seem that across the great lake it is the timeshare companies that are on the legal offensive. In Europe the timeshare companies are very much on the defensive as we have seen in some of our previous articles.

Yesterday we published an article about the legal battle being waged against Silverpoint, they have stated that they will be filing a case with the High Court of Justice of the European Union, arguing that Spain has got the EU Timeshare Directives wrong.

eu court justice

Just to clarify one point on the EU Timeshare Directives, that is what they are “directives”, they are not law. A directive issued by the EU is a guide to all EU States to enact into their own domestic laws certain aspects which affect citizens. It is up to each individual state to interpret those directives as they see fit. The whole point is that each State may strengthen the directives, which is what Spain has done with their own timeshare laws, firstly with Ley 42/98 and more recently with Ley 4/12.

Directives are there to try and unify each State’s laws, especially on the matter regarding consumers rights, which the timeshare directive was intended to do. Before the timeshare directives came out, timeshare in Europe was what can only be described as lawless, timeshare companies could walk all over the consumer, there was no protection, timeshare was a new concept which nobody actually understood.

It followed an old economic system known as Laissez-faire, which has its roots in the 17th and 18th centuries, it was to be free of any government intervention, such as regulation. More recently a new term was conceived by conservative politicians and economists ‘free-market capitalism’. Timeshare has always followed this model, profit, profit and more profit at the expense of the consumer. (Again it sounds like Star Treks Ferengi).

Until laws are strengthened to the benefit of the consumer, we are going to see many more of these legal battles, be it consumer against developer or developer against law firms, the stage is set, let battle commence!

Now on with today’s article by Irene

Castle Law and Judson Phillips is Sued in Federal Court for Fraud

Orange Lake v. Castle Law Group PC

Westgate v. Castle Law Group

Diamond Resorts v. Castle Law Group

Who Next v. Castle Law Group

Speak truth

By Irene Parker

August 22, 2017

Who is Judson Phillips?

Tea Party Nation is a conservative American group considered part of the Tea Party movement.   The group was created by former Shelby County, Tennessee assistant district attorney Judson Phillips in 2009

https://en.wikipedia.org/wiki/Tea_Party_Nation

Judson Phillips Ridiculed for Wanting to Deny Others the Right to Vote

Judson Phillips, the lawyer behind Castle Law Group (Nashville), latest idea has created a hurricane size backlash against Mr. Phillips. The Castle Law Group owner believes that only property owners should have the right to vote.  Phillips seems to believe those who aren’t the elite feudal lords of property can’t be trusted to vote. Instead, they must be put back in their place as serfs, working for their lords for scraps off the feudalistic tables.

http://www.brighthub.com/money/home-buying/articles/123520.aspx

A Bright Hub reader’s response:

Yes, I am Republican but in no way would I ever want to be affiliated with any political group who deemed renters shouldn’t vote in public elections.

Who Castle Law Group is not:

http://www.castlelawgrouppa.com/

I contacted attorney Ben Hillard of the Castle Law Group P.A. in Largo, Florida a few months ago – by mistake. Mr. Hillard responded saying he thought I had his law firm confused with Castle Law Group PC of timeshare fame, law firms differentiated only by the initials P.A. and PC. Mr. Hillard would like to make it clear his firm is in no way associated with Mr. Judson Phillips or his law firm Castle Law Group PC. In a recent letter to Mr. Hillard, Mr. Phillips said his firm is considering rebranding for reasons not associated with Mr. Hillard’s concerns, the similarity in names.

Here is the Castle Law P.C. and Orange Lake Lawsuit as reported by Paul Brinkmann at the Orlando Sentinel

Orlando-based timeshare companies Westgate Resorts and Orange Lake Country Club filed nearly identical lawsuits in Orlando against Tennessee firms Castle Law and Castle Marketing. Westgate and Orange Lake accuse the Castle companies of charging some customers an upfront litigation fee of $7,500. Orange Lake said Castle filed no lawsuits for any of its owners who paid the fee; Westgate said Castle hasn’t filed lawsuits for some owners who paid the litigation fee.

A senior partner with Castle — attorney and Tea Party leader Judson Phillips — denies those allegations…. he said in an email he believes the suits are frivolous, and he and Castle have obtained good results for clients.

http://www.orlandosentinel.com/business/brinkmann-on-business/os-bz-timeshare-cancellation-fraud-20170618-story.html

According to a letter sent to Orange Lake attorney Brian Lower, from a Castle Law Group attorney, Castle accused Orange Lake of “gross misrepresentations regarding the terms and conditions of the Orange Lake timeshares in that they were fraudulently induced to enter into the timeshare contract and the debt instruments associated with such contracts in violation of federal and state laws.”

A letter from a lawyer like this triggers a “cease and desist” demand of all communication with the client, including collection attempts. This cease and desist letter has served as a bone of contention to timeshare developers in that a debt collector may not communicate with a consumer if the consumer is represented by an attorney or has an open Attorney General complaint, under the Fair Debt Collections Protections Act.

Among the twelve causes of action in Castle’s cease and desist letter against developers, are those our Inside Timeshare readers who have contacted us asking for help would not disagree with:

  • Improper and unethical high pressure sales tactics.
  • Gross and deliberate misrepresentations regarding benefits of ownership.
  • Gross misrepresentation regarding the ability to utilize timeshare points to cover fees associated with membership and exchanges.
  • False information regarding the ease and/or ability to resell for a profit.
  • False sense of urgency to purchase the same day.

Castle Law Group PC is not Better Business Bureau accredited, is nonrated, and a consumer complaint warning has been posted.

https://www.bbb.org/nashville/business-reviews/timeshare-cancellation-and-litigation-attorneys/castle-law-group-pc-in-nashville-tn-37113357

According to the Castle Law website they are timeshare lawyers trusted by thousands with a 4.7 out of 5 star ranking based on 12 reviews (powered by GetFiveStars). When I reached out to the firm for comment, I was put on hold for a very long time.

https://timesharecancellation.com/

you decide

Greg Crist, CEO of the National Timeshare Owners Association was recently quoted by the Orlando Sentinel that more lawsuits against cancellation companies were likely in the works.

“Some of those cancellation companies that have been targeted by developers were actually started by their own former timeshare employees. Those folks learned how to exploit the system by learning what is called the inside track. They know how the high-pressure sales tactics work,” Crist said. “They attract timeshare owners in the same way — post cards offering a free dinner, or an evening out. They show owners how maintenance fees escalate, and literally scare the hell out of these people using calculations that are wildly inaccurate and overstated. These are not law firms but represent to have an attorney on staff, giving the illusion that there are legal services involved in the transaction. Rarely does the company even communicate with the resort and the timeshare owner doesn’t even know what is happening until it is too late. Why is that?”

Crist explained this is often due to an unqualified money back guarantee the company provides that isn’t worth the paper it’s printed on. The owner is simply lulled into a false sense of security, until they are foreclosed on and that’s when all hell breaks loose. Crist has watched this happening for years, but says the industry is making a mistake by throwing legitimate attorneys in the same mix with resale, transfer and advocacy groups.

While the NTOA is involved with educating owners, advocating for their rights and helping them engage in the product they already own, they do not sell, transfer or offer services like TPE’s do. Any timeshare member or owner can join NTOA.

https://www.ntoassoc.com/

GBUgly

The present legal climate in the timeshare world is reminiscent of the old west with summons flying like bullets back and forth across the corral. Lost in the middle is the consumer, many complaining they purchased a timeshare based on false promises. The timeshare lobby ARDA and the major timeshare developers seem determined to ignore outcries of deceit on the front end of the timeshare sale.  

All attorneys are not created equal. It seems that timeshare developers don’t want a timeshare member to ever contact any lawyer and they lump all attorneys into a kettle of frivolous lawsuit filers. Two major developers attributed their rise in default rate due to “attorneys targeting members and cease and desist letters.” As in any profession, some attorneys do have questionable business practices, but any citizen should have a right to their day in court and the legal representation that accompanies that right if they feel they were deceived into purchasing a timeshare.

One former Hyatt and Diamond Resorts sales agent described “inventory recycling” as a hamster wheel that sometimes begins with deceit and bait and switch on the front end of the sale. To date (as of August 16, 2017) Inside Timeshare has received 124 inquiries of which 110 allege they were deceived on the front end of the timeshare sale. Most have outstanding loans.

“I am asking you to look at the moon and you are staring at the end of my finger,” deceased Jesuit Priest Anthony DeMello once wrote. That’s how I feel listening to case after case from family members, often financially devastated, alleging they were deceived, sometimes just days after a rescission period. Why won’t developers take a closer look at their own house?

ethics cartoon

Contact Inside Timeshare if you have a positive or negative timeshare experience to share, through your experiences others may have a better understanding of what they are going through and see that they are not alone.

If you need any further information regarding any article published, or wish to know where you stand legally with your timeshare, Inside Timeshare is here to help. Contact us and we will point you in the right direction.

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