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Westgate

Friday’s Letter from America

This Letter from America was originally scheduled for publication in August, it follows the revelations published here about a crucial decision from Scotland’s Court of Sessions, by Lord Sanderson. It is a US perspective of Mr Trump and his relationship with certain timeshare moguls, just like the story of his involvement in Scotland, it does not paint a very good picture. This article also briefly shows the efforts and role of the “Regulators” in the U.S. So it ties in with another article published this week. For those of you who are not familiar with the “Timeshare Mogul” named, click on the YouTube link and watch the Queen of Versailles, you will then ask yourself the question, “Is this where my money has gone?”

Trump and Timeshare

By Irene Parker

U.S. names like Trump and Biden are not mentioned in polite company without jeopardizing relationships with friends and family. There are many reasons to like or dislike both named politicians, but those on the side of consumer timeshare protection have reason to question former President Trump’s biased stance on timeshare sales and marketing practices.

Charles reported earlier this week on questionable lending as pertaining to the Trump Organization’s acquisition of the Turnberry Resort and golf course in Scotland. A look back to what happened in 2016 provides some political timeshare history.


Pictured left front Westgate owner David Siegel

Pictured above is candidate Trump in 2016 on the stump. Westgate owner David Siegel of Queen of Versailles fame is seated to Mr Trump‘s right. The Queen of Versailles documentary describes the couple’s 90,000 square foot Orlando home that includes Mrs Siegle’s 5,500 square foot clothes closet. The documentary took Best Director at Sundance some years back.

I have no objection to great wealth, but a number of Westgate owners have reached out to me or our volunteers, unable to exit their timeshare. Some have debilitating and chronic health conditions. One couple, the husband, age 90, was forced to default on their timeshare week because Westgate objected to their paying their broker his $800 commission after the broker had found a buyer offering $500. I know of no honest timeshare resale broker (those who charge no upfront money to list a timeshare for sale) that will accept a listing for Westgate units because it is written into the contract that Westgate is entitled to 50% of the commission.

The  Consumer Financial Protection Bureau is the federal agency in the U.S. that seeks to protect consumers, along with the Federal Trade Commission. The CFPB in 2016 fined Wells Fargo $100 million when agents opened unauthorized accounts to reach performance goals and compensation incentives.

Westgate underwent a two-year investigation concerning sales and marketing practices. According to Buzzfeed News, Diamond Resorts was the next likely candidate to come under CFPB scrutiny. Not only was the Westgate investigation dropped almost immediately after the 2016 presidential election, the CFPB was all but dismantled.

REGULATORS ARE LOOKING INTO AMERICA’S LARGEST TIMESHARE SELLER March 18, 2016

https://www.buzzfeednews.com/article/matthewzeitlin/financial-regulators-are-looking-into-americas-largest-times

According to the CFPB’s civil investigative demand (CID), the Westgate investigation looked into possible violations by salespeople involved in “the sale and financing of timeshares engaged in, or are engaging in, acts or practices in violation of the Consumer Financial Protection Act, the Fair Debt Collection Act, the Electronic Funds Transfer Act and the Fair Credit Billing Act.

Where is the CFPB today?

WASHINGTON, D.C.The Consumer Financial Protection Bureau (CFPB) today issued a report highlighting legal violations identified by the Bureau’s examinations in 2020. The report also highlights prior CFPB supervisory findings that led to public enforcement actions in 2020 resulting in more than $124 million in consumer remediation and civil money penalties. June 29, 2021

https://www.consumerfinance.gov/about-us/newsroom/cfpb-report-highlights-supervisory-findings-of-wide-ranging-violations-of-law-in-2020

Anyone who is unable to resolve their dispute, after reaching out to their timeshare company, and feels they experienced unfair and deceptive practices, should file a complaint with the Federal Trade Commission, the Consumer Financial Protection Bureau, the state Attorney General where the contract was signed, and the Better Business Bureau. It is only because of a volume of complaints that Timeshare Sales appeared at #7 on the FTC’s list of Top Ten Scams at $17.4 million and Timeshare Resales (We have a buyer for your timeshare scams) #10 at $12.5 million.

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

Inside Timeshare will say this again, there is nothing wrong with the concept of timeshare, for some, it is a good option and suits their vacation needs, but as always it is the way it is sold and managed. The consumer is just the proverbial “Cash Cow” to be milked of their cash by the greed of the industry.

Inside Timeshare welcomes your views on this subject, Inside Timeshare can see many similarities in what is happening in the timeshare world, not just in Europe but in the US, Canada, Australia and elsewhere. Eventually what happens in one place will happen elsewhere, it is an international problem, so we invite you to use our contact page or just leave a comment. Have a great weekend.

Friday’s Letter from America: Timeshare Foreclosure

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

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

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

See the source image

Is a Timeshare Foreclosure Considered Mortgage Foreclosure? 

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

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

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

By Irene Parker

July 23, 2021

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

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

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

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

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

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

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

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

Following are five additional disturbing reports:

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

What does this mean to timeshare members and owners?

According to HomeGuidesSF:

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

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

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

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

Best Stocks to Buy According to Hedge Funds

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

In this article we are going to look at another set of evil companies that use high pressure sales tactics to trick consumers into signing complex long-term contracts that they don’t understand: timeshare marketing companies. Check out this Reddit post where the user is asking several questions about Wyndham timeshare cancellation. This person was able to cancel and receive a full refund, but many consumers don’t cancel within the 7-day or 10-day window specified in their contracts.

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

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

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

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

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

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

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

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

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

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

Top Ten Scams

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

Senior Defaults

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

HOAs Benefit from Onsite and Offsite Timeshare Resale Programs

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

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

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

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

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

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

Fridays Letter from America: Developers, Sales Agents & Exit Companies

Welcome to the end of another week with Inside Timeshare and another Letter from America. We once again visit a subject that has been followed many times on our pages the culpability of the developers in the ongoing scamming of timeshare owners by the many fraudulent exit companies that have sprung up. All because of the lies by the sales agents and the difficulty in terminating any timeshare membership.

Why are Timeshare Developers not Concerned about those Harmed by Timeshare Sales Agents?

Organizational Chart of Exit Companies

April 30, 2021

Inside Timeshare routinely hears from those harmed by timeshare exit companies. The conglomerate chart above contains familiar names. Michelle in California reached out to her timeshare company to report allegations that she and her husband were sold points deceptively. The resort dismissed Michelle’s complaint, basically saying they were not responsible for the actions of their sales agents. Michelle retained Resort Release for $25,000. Not long after, Resort Release sought bankruptcy protection after Michelle’s timeshare company and others filed lawsuits against Resort Release and American Resource Management Group (ARMG). ARMG is at the center of the chart. Resort Release appears on the right. 

American Resource Management Group  

“A top priority for ROC is to ….help protect them from dishonest individuals or companies trying to take advantage of them,” said ARDA‐ROC Chairman Ken McKelvey. American Resource Management Group, LLC doing business as Resort Release, filed for bankruptcy in the U.S. Bankruptcy Court for the Southern District of Florida under Case NO.: 19-14605-JKO. 

https://www.prnewswire.com/news-releases/timeshare-owners-coalition-issues-warning-about-third-party-exit-companies-300837548.html

Timeshare developers need to understand that a solution to the problem requires an acknowledgement that the developers and their sales agents are part of the problem. The Federal Trade Commission this year listed Timeshare Sales at #7 on their Top Ten Scams list. Timeshare Resales are #10 on the list. Timeshare resale scams are companies that contact you to say they have a buyer.   

Timeshare Freedom Group (to the left on the chart) has been running frequent advertisements on national television in the U.S. Measured in terms of dollars spent per second of advertisement, the average going rate for an ad on national TV is approximately $342,000 per 30 seconds of air time, according to WebFX.

Diamond Resorts filed a lawsuit against Timeshare Freedom Group 

https://www.prnewswire.com/news-releases/diamond-resorts-files-lawsuit-against-timeshare-freedom-group-molfetta-law–others-in-timeshare-cancellation-ring-for-allegedly-scamming-consumers-301136988.html

Help4TSO is at the top of the chart. A VA Chaplain and his wife attended an Allied Solutions Group presentation at a Joe’s Crab Shack in Las Vegas. Allied Solutions Group is not on the chart, but they refer to Help4TSO.  

“We paid Midwest Transfer $27,895 on May 17, 2017 for a Travel Club promised a release from our Bluegreen and Silverleaf timeshares, but now have a travel club we don’t need and the two timeshares. Allied Solution Group/Mid-West Transfer described their services as a Mortgage Relief Advocacy Process. They said an advocacy firm would be retained by Help4TSO.”https://www.opednews.com/articles/A-VA-Army-Chaplain-Loses–by-Irene-Parker-Fraud-181009-152.html

The other side of the coin

Michelle is not alone. Air Force veteran Adam Siler is reaching out to veterans and active duty service members, Tiffany Renee, the elderly, and Bernadette, those battling chronic health conditions. With so little done to help the consumer, in a largely self-regulated industry, an informed consumer is the best defense. Adam, Tiffany and Bernadette explain in this April 16 article why timeshare buyers need to record the sales session.

https://insidetimeshare.com/fridays-letter-from-america-should-sales-presentations-be-recorded/

Bernadette’s Petition has 421 Supporters as of April 25

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

See the source image

Michelle’s report, followed by three other reports against her sales agent 

By Michelle in California

I signed Bernadette’s petition to protest the double standard. In January of 2018 we met with Diamond Resorts sales agent Adam D and his manager Billie B in Las Vegas. We already had 70,000 Diamond points. As Platinum members, this was more points than we needed. Anyone who has achieved Platinum loyalty level has likely spent over $200,000 on vacation points.

Adam informed us that our maintenance fees would go up every year unless we wrapped our prior loan into a new loan. He said that by refinancing, our maintenance fees would not increase for ten years because they would be included in the ten year refinance. Adam said he would GIVE us 15,000 bonus points if we refinanced. We received bonus points at prior purchases, so this seemed normal. 

We noticed the Purchase and Sale Agreement showed 15,000 points. We asked Adam about it because we told him we didn’t want to buy additional points. Adam said not to worry as it would get fixed later. He added that if we ever wanted to sell points, “We can hook you up with another member. Diamond will charge $250.” We now know Diamond points have no resale value. You have to PAY Diamond $1,000 per contract to take points back. The meeting lasted over seven hours.  

It wasn’t until the next month we learned that we BOUGHT 15,000 points! Our loan amount increased to $183,582 and maintenance fees increased from $12,000 to $15,000. We called Diamond. A Quality Assurance representative named Dave said he would investigate. He never called back. Ultimately, Diamond’s attorney sent us a letter that basically said all that matters is we signed a contract.    

We retained Resort Release in June of 2018 because there was no way we could afford the additional purchase. After paying Resort Release $25,000, they filed for bankruptcy.  

Other Adam D Complaints

Complaint #2 Bonita in California

https://insidetimeshare.com/tuesday-review-clarity/

In May of 2017 we purchased 4,000 points from Adam and his manager Joey. Adam told us that since we had so few points, we were paying more for maintenance fees than we would if we purchased additional points. After the purchase, I received a bill for $661 for additional maintenance fees. Adam said that my fees would be $1,124 but after the purchase they were $1,541. When questioned, he responded that the $1,124 was the amount for the new maintenance fees as stated on the contract. That was not how he explained it. We were told the price of the points was going to go up, but learned points have no resale value. Adam also said he was going to add in a Westgate week so that we could be at Silver loyalty level at 15,000 points. We did not own a Westgate week.

Loan amount $22,829.44 financed @ 17.1558%

Diamond’s Response: 

“We must advise that it is specified clearly in the contract documentation that if you relied upon any verbal information given during the presentation you must ask for this to be put in writing. Likewise, if anything was said that was of particular importance to you, but which is not contained in the terms and conditions of the membership, this should have been requested to be implemented in the body of contract before documentation was signed.”

Adam D complaint #3  

Wanda and Douglas, ages 65 and 71 at time of purchase

Douglas is a Bronze Star Veteran 

We owned two deeded weeks. We purchased points from Adam D at Polo Towers. The purchase cost $2,400 per month in monthly loan payments and $13,000 in annual maintenance fees. We were told that we would be able to rent out the timeshare to make money to cover the monthly loan payments. That turned out to be impossible. We defaulted on the loans.    

When we called Diamond they said: We are not responsible for what a salesman tells you. I asked, “Doesn’t this salesman represent your company?” They just repeated, “We are not responsible for what a salesman tells you.”

Complaint #4 A former Criminal Investigator

We met with Adam and Rick at Polo Towers. They explained how Diamond Resorts had been taken over by Apollo Global Management and that Apollo, realizing that Diamond had failed to remedy failures, created a program that would provide financial relief – if we purchased additional points. It would be foolish not to join as it would “right all wrongs.” Rick produced a binder listing “The Club” benefits. Adam produced a card from his wallet. 

Benefits that failed to materialize:  

Benefit 1. When making reservations, 50% of the points used would be loaded onto a reloadable “Club Card” that could be used like cash, redeemable for $.10 to $.30 per point. The credit could be used for anything, INCLUDING PAYMENT OF MAINTENANCE FEES. Had this been true, it would have addressed our major concern – rising and exorbitant maintenance fees.      

Two weeks passed without receiving a “Club Card.” When I contacted Adam he said Diamond discontinued the card. When I asked what would replace it he said he was in a meeting and couldn’t talk. I never heard from him again. When we attempted to obtain the “50/50 split” we were told no such program existed.   

Benefit 2. Vice President of Sales Dan P would be our “Personal Travel Concierge.” Dan’s skills were described as being “like magic.” Dan gave us his business card and said he looked forward to working with us. Voicemail recordings were all that happened.  

I sent a letter to Diamond CEO Michael Flaskey. His agent recommended I use Diamond’s Barclay credit card explaining, “That is what ‘covered under financing’ means.” I have stopped payments. Nothing was ever mentioned about using Barclaycard to pay maintenance fees. Charging purchases to a Barclaycard offsets maintenance fees at only 1%, or 2% if used to charge Diamond-sponsored products. 

See the source image

More need to join our efforts to reach out to lawmakers, regulators and the media to raise awareness and provide consumer education. A simple disclosure provided before the sales session alerting the buyer that anything a sales agent promises will not be honored – due to one sentence in your volume of documents: 

“I did not rely on oral representations to make my purchase.”

A Diamond member-sponsored Facebook 

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

Thanks to Michelle and all our contributors from across the Great Lake, your problems are very similar to those experienced by timeshare consumers in Europe and most probably anywhere in the world that timeshare is sold. Hopefully, these articles will help to create a change in the industry that is well and truly needed.

That is all for this week, Inside Timeshare will not be publishing for a short while due to personal reasons, but we hope to be back with you within a couple of weeks.

Have a great weekend.