Continuing with our US timeshare theme, Irene Parker today highlights some of the problems that beset consumers in the USA, she asks the question who do consumers go to when they have a problem or complaint?
In this article she tells the story of an elderly couple Kathie and Wes Olds, who are Diamond Platinum members, 50,000 points, the concerns they raise about the constant upgrades and how they were encouraged to open a Diamond Resorts “Barclaycard”. By using this card for purchases they could earn around 1.5% in the “Cashback scheme” which could be used towards maintenance fees, as they found it was not going to be that easy.
Irene also explains how the Olds, were told they could use their points towards the $8,200 a year maintenance fees at $0.50 a point, only problem is to be eligible they would need to purchase more points. As Irene put it previously the Olds were now part of the “Continuous Money Making Machine”.
Enjoy the article, it is certainly an eye opener.
FTC = Federal Trade Commission
FBI = Federal Bureau of Investigation
Is the FTC or FBI an avenue for Change for Diamond and other Timeshare Owners Devastated by Little or no Secondary Market?
By Irene Parker
Inside Timeshare
December 5, 2016
Timeshare today has been reduced to high pressure, often hours long sales presentations demanding prospects sign a perpetual contract today or lose incentives and perks that will be gone forever. The contract language often includes, “Heirs, successor trustees and personal representatives bound by the contract obligations.” Throw in the limited or nonexistent secondary market and you have a recipe for disaster.
Inside Timeshare previously told the story of the Saldana family. The family has since surrendered their Diamond contracts due to rising maintenance fees. Remaining is a $33,000 home equity loan. With legal help, they quite possibly could have been released from a timeshare loan. Timeshare buyers are often encouraged to obtain a home equity loan due to timeshare’s 14% to 18% loan interest rate. This conveniently lets the timeshare developer off the hook when the owner can no longer afford the rising fees.
http://insidetimeshare.com/irene-parker-write-barclay-card-usa/
The Saldana family was encouraged to open a Diamond Resorts “Barclaycard” to become a Diamond platinum member so that they could charge their maintenance fees. A Diamond “point” historically costs $2 to $4 a point, but if used for maintenance fees, is worth only a few pennies on the dollar. They declined.
The Olds Family did open a Barclaycard.
Kathie and Wes Olds, ages 68 and 69, acquired enough Diamond points to become Platinum members. Like the Saldana family, the maintenance fees have become cost prohibitive. The Olds family own 50,000 Diamond points.
At their last Diamond “Owner’s Update” at Mystic Dunes in Orlando, Wes and Kathie expressed their concern over rising maintenance fees. The sales agent said they were in luck. Apollo Global Management, the private equity firm that purchased Diamond in a $2.2 billion buyout this past September, said effective February 2017 owners could “cash in” their points for $.50 a point and use them to pay maintenance fees, but they would need to buy another 10,000 points for $37,000. The sales agent suggested a home equity loan. Remember, we said points historically have sold for $2 to $4 a point.
The sales agent said Apollo will be reducing the requirement from 75,000 to 60,000 points to be eligible for this “cash in” program. The family has invested approximately $100,000 in their Diamond resort vacation plan and the maintenance fees have grown to $8,200 a year. Wisely, the family decided this was not a good solution.
The family has other concerns over the use of the Barclaycard. They were told their credit card purchases would earn them 1.5% cash back which could be applied to their maintenance fees. They learned later this was easier said than done because they would have to petition Barclays bank in order to make this happen.
The Consumer Financial Protection Bureau is currently investigating Westgate timeshare. The CFPB has denied Westgate’s petition that the CFPB was overreaching their jurisdiction. Westgate claimed the CFPB should only investigate lending. Clearly, sales and marketing are part of the lending process. Sadly, it is expected the CFPB will be weakened or dismantled post US presidential election.
Ironically, the Florida Attorney General reviewer reviewing my complaint suggested I contact the FBI since their office pursues so few complaints. I had asked how to change bad business practices since change won’t happen lawsuit by lawsuit. Furthermore, few Attorney Generals in the US will pursue timeshare complaints. Exceptions have been New York AG Eric Schneiderman who halted sales at The Manhattan Club and the Tennessee AG lawsuit against Festiva.
Should we ask the FBI at IC3.gov to look into our complaints?
https://www.ic3.gov/default.aspx
I asked Mike Finn of the Finn Law Group what he thought. “I think between the FBI and the FTC you’d have better luck with the latter. The FBI essentially investigates criminal activity and I don’t think anyone is going to categorize timeshare fraud as criminal activity, at least not yet. The federal trade commission has a terrific statute on deceptive trade practices and advertising on its books. Most states have used a portion of the federal language in their own statutes so it does make deceptive practices a national issue. Unfortunately there is no private cause of action and although you can file an FTC complaint they do not have the resources to investigate them individually.”
Translation: From Wikipedia
Implied cause of action Circumstances when a court will determine that a law that creates rights also allows private parties to bring a lawsuit, even though no such remedy is explicitly provided for in the law.
“That is unfortunate because the feds would do a lot better job than the states that could be influenced by campaign contributions. The issue should be looked at nationally since so many of the developers operate in so many states and their practices are all the same,” Mr. Finn added. Mr. Finn does recommend people file complaints with the AG offices, CFPB, IC3 and the FTC because it takes volumes of complaints to change anything.
Well, we’re back to public outcry and public awareness.
Why Did Mylan Hike EpiPen Prices 400%? Because They Could
Mylan hiked prices because they could. A generic EpiPen appeared practically overnight when public outcry demanded action.
The same holds true for predatory timeshare lending. Predatory timeshare lending will continue unchecked until more voices demand regulatory change. Right now public awareness seems to be it. Retirement advocates like AARP American Association of Retired Persons have been strangely silent despite the fact that the industry targets the elderly.
On November 17, a jury awarded a Wyndham former sales agent $20 million for exposing this. More former timeshare agents are coming forward to share their experiences from Inside Timeshare and Inside Timeshare is here to help them.
Lawmakers passed laws in Florida that went into effect July 2015 making it more difficult for timeshare owners to be released from contracts.
http://insidetimeshare.com/news-across-pond/
Regulators and lawmakers have been no help.
What’s an owner to do? We ask other owners to comment if they are in a similar situation.
Links: Television interview with Ralph Marble
http://insidetimeshare.com/illness-not-reason-surrender-timeshare/
Wyndham Whistleblower $20 jury award
http://insidetimeshare.com/whistleblowers-expose-timeshare-sales-tactics/
Roddy Boyd of Southern Investigative Reporting Foundation includes the history of Diamond’s price per point in his article “Diamond Resorts and Its Perpetual Mortgage Machine.”
http://sirf-online.org/2016/03/07/27464/
Inside Timeshare would like to thank Irene for all her hard work and research into the complicated world of US timeshare, also many thanks to Mike Finn, of Finn Law Group for his views on the subject of who to direct any complaints you as consumers may have. This article also highlights the need for tighter control of the industry and how as consumers we need to come together to address this ongoing problem. It also shows that until the resorts / developers actually take notice of those who keep them in business, the problem is not going to go away.
If you have any comments or questions on this subject or any other article published on Inside Timeshare, use the comments section to contact us. If you have a story and would like to share this with others contact us and we can work together to publish it and let other owners know what is going on.
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