A Better Business Bureau investigative report was published this year critical of the timeshare industry. The report’s author, BBB international investigator, Brian Edwards, listed several proposed changes, but industry lobbyists would never allow the following changes to happen. The industry would disappear. Of the nine suggestions listed in the report linked below, two stand out:
- Eliminate multi-hour pitch meetings
- Stop pressuring consumers to sign contracts immediately. Instead, give them a chance to take the contract and think it over.
In 2019, in Arizona, a bill was introduced that would have allowed timeshare buyers 24 hours to consider their decision before signing a perpetual timeshare contract, often financed between 12% to 19%, with little to no resale value. The bill passed in the House by 100%. ARDA killed the bill in the Senate. ARDA lobbyist Don Isaacson’s opening statement, “But the bottom line is that the state should not step in to protect people who didn’t bother to understand the nature of the deal.“ Is this the consumer’s voice?
Additional reforms we would propose:
- Disclose the oral representation clause PRIOR to the sales meeting,
- Disclose to existing members that “updates” include a sales presentation, as they are routinely told they are not,
- If the recorded closing (introduced in 2017 after an Arizona Attorney General investigation) is used against the buyer, allow the buyer to record the sales session.
There have been many reports from members who said they were coached on what to say or not say on the recording. If a question is raised, the recording device is turned off while the question is asked and answered. The question and answer should be on the recording. The buyer is not allowed to listen to the recording without a subpoena. A subpoena cannot be issued without filing an arbitration case.
In the BBB report, the American Resort Development Association (ARDA) defended the industry, claiming past problems have been resolved: ARDA President and CEO Jason Gamel said in an interview with BBB that the timeshare industry has worked over the past decade to shed many of the high-pressure practices traditionally associated with the industry.
ARDA-ROC raises $5 million a year from consumers in mostly opt-out donations. As one person commented on a Timeshare User’s Group post: Some developer-controlled resorts put a membership in ARDA as part of members’ m/f’s which is a huge conflict of interest. I have never heard of a member-controlled HOA doing that. Individual timeshare owners should not have to fund what amounts to their opposition.
In 2010 ARDA was fined by the Federal Election Commission for not calling the donation voluntary. I’ve yet to meet the timeshare member who could tell me what ARDA is. The $7 I was billed this year was not visible on my invoice, only in my Account History.
Investigator Edwards suggested that there be increased transparency about businesses that violate ARDA’s Code of Ethics, and that Developer members who violate the code be expelled. The problem is, that complaints are made about Developers to Developers. They would be expelling each other. The Boards of ARDA and ARDA-ROC consist of multi-millionaires and a few billionaire developers.
Bob Kobek, President of Mobius Vendor Partners, suggested in his July 7 response to the BBB report, that a survey given to consumers, post-presentation, as survey responses could provide valuable feedback. Mr. Kobek serves on the BBB’s Board of Directors for Central Indiana.
Past problems have not been resolved. In 2020, the Federal Trade Commission listed Timeshare Sales at #9 on their Top Ten Scams List followed by Timeshare Resales (fake buyers) at #10. Timeshare Sales complaints totaled $18.7 million and Timeshare Resales $13 million. Six reports included in our report today were submitted by people who bought from the same sales agent over a period of five years.
We have followed volumes of complaints, lawsuits, attorneys general investigations and resulting settlements. The BBB report lists complaints by state. Florida had the most timeshare complaints from 2020 through 2022 with 16,067 complaints, followed by California with 1,670 complaints. Florida was not one of the states that participated in the study.
One of 12 lawsuits filed against Wyndham that we have been following, reported multiple complaints against the same agents:
These reports show individuals with 30, 40, and even as high as 57 cited violations, including pitching rent violations. Wyndham did not terminate these sales representatives despite these high numbers of violations. Case 6:19-cv-00649-PGB-DCI.
The following organizations, jury awards and settlements dispute the claim that past problems have been eliminated.
The National Association of Attorneys General (March 2020)
Unfortunately, the current landscape of the timeshare industry has exposed significant inadequacies in protection for those seeking to purchase, lease, or exit their timeshare contracts.
Consumer Advocate Christopher Elliott, Are timeshare contracts fair? May 26, 2023,
Short of federal legislation to correct the problem — and override the state timeshare laws, which were heavily influenced by timeshare lobbyists — there’s no way to fix this problem. A federal law would also need to address the contracts retroactively, allowing owners a fair and reasonable way to exit. That’s highly unlikely.
The California Attorney General ordered Welk Resorts to pay up to $5.5 million (2020)
After receiving hundreds of complaints about consumers feeling duped when purchasing timeshares at Welk Resorts, investigators found the California-based company was violating numerous legal requirements set in place to protect consumers from receiving less than they bargained for.
In 2017 The Manhattan Club admitted wrongdoing (few do), ordered to pay out $6.5 million, which was a minuscule amount compared to over $100 million in maintenance fees taken in, paid to a shell company with no employees.
A 2017 $20 million jury award to former Wyndham sales agent Patricia Williams
In 2023, Flagship Resorts DBA FantaSea was ordered to pay $1,688,423. On June 30, FantaSea filed a motion attempting to weasel out of the award by blaming their bank’s financial woes.
The Arizona Attorney General ordered Diamond Resorts in 2017 to pay $800,000 after receiving over 900 complaints. Settlement terms included allowing Arizona members in good-standing, or AZ residents who bought anywhere, to be charged $250 per contract to exit, compared to $1,000 per contract for all others seeking release.
Festiva Travel Club was order to pay restitution of $3 million in Tennesse (2016)
North Carolina Festiva Settlement: $286,000
This $90 million lost to exit scams is tip money compared to the universe of money lost.
Developers created the exit industry by suppressing a viable secondary market. There is no exit industry for our primary residences. The exit industry for our homes are real estate agents. The US Treasury Department even sanctioned a Jalisco Mexican cartel for distributing fentanyl and timeshare exit scams throughout the US.
Six complaints against the same sales agent
R C Complaint #1 of 6: Beverly in New York
November 1, 2019
We are seniors and have been Platinum timeshare members since around 1988. We had 54,000 points before encountering R C who we met with in 2018 in Orlando. R asked if we would be interested in hearing of a way to have our fees taken care of through a “Currency System” that we later learned did not exist. Our maintenance fees were over $8,000 a year.
We were aware of a travel discount “30/30 program” that R had noted in a handwritten illustration. We were not interested in the goods and services the program offered, but the new Currency System would generate $13,100 towards our maintenance fees at $.30 per point.
R explained that if we charged say, $50,000 in a year on our Barclay credit cards, Currency System members could turn in a corresponding 50,000 timeshare points at $.30 per point totaling $15,000 plus $500 for the standard 1% credit for charging $50,000. He said I would need to link our existing Barclay credit cards to our new Barclay cards to receive “fulfillment dollars” applicable toward the Currency System. We purchased an additional 25,000 points for $108,430. Our new annual maintenance fee was estimated to be around $13,500 for a total of 79,000 points. My husband is a former banker. He felt it was logical that since Platinum members spend over $200,000 to reach the highest loyalty level, there would be generous perks. We believed R C having built trust over the years.
How the program didn’t work
I applied for a new card and transferred our existing balances to the new card. Bear in mind that the member has to wait until the end of the year before learning the new program doesn’t exist, effectively dodging the contract rescission period.
Over the course of the year, we charged $59,000 to three new credit cards. According to the formula, 59,000 timeshare points would generate $17,000 @ $.30 per point, plus the $590 credit for the 1% rewards points. The $17,590 “fulfillment dollars” would be more than sufficient to cover our new maintenance fees.
After several calls to the resort, and to Barclays, it became apparent the program didn’t exist. Each vendor sent me to the other and was vague in the way they addressed the process. Barclays is a partner with several timeshare companies.
Before realizing we had been had, we met with Joaquin, a senior associate at another stay. He said he knew R C well. He left the room to speak with him. When he returned, he proposed another purchase to receive $1.00 per point exchange. We quashed this offer, after fighting off multiple salesmen.
A different sales agent at the same sale center also presented the bogus “Currency System” in 2017. A recent new hire resigned after being assigned to that sales agent’s “team” in 2023. The Currency System sales agent’s criminal history:
Arrested by Winter Park Police Department on 07/11/2003 – CR -Petit Theft – Second Degree. (pleaded Guilty) Fine $543.00.1day in jail, Placed on supervised Probation 179 days and removal if serves 20 hours of community service ordered to pay restitution of $150 to victim. Adjudication withheld.
Orange County Court Records Search (Public), She was arrested by the Orange County Sheriff Office, both dates: Charge #1 07/12/2005 – Theft Statue: Third Degree – Felony #2 07/15/2005 – Principal to Grand Theft Third Degree – Felony – Grand Theft Third Degree is property taken and is valued from $300 to $20,000. She pleaded not guilty, jury trial on 10/04/2006, verdict returned not guilty and she was acquitted. But so ordered on 07/21/2008, put on Administrative Probation, and ordered to have no contact with victim during Administrative probation. The Victim: Correspondence was filed by P.Divers with Allstate
10/29/2008 – Petit theft of $100 or more. Fine $180 adjudication withheld. She “pled NOLO” as charged, the same as pleading guilty.
An Oct 21, 2017 VIP Dinner at the Hyatt Regency was our second presentation about the new 2018 “Currency” program designed for Platinum owners with 50,000 annual points or more. The agent explained misconceptions we had from our June update. She used a professional-looking Currency app designed to show how the program would use our 2018 points to pay for all our 2018 vacation expenses and still have points left over for travel. The demonstration clearly showed that points would be eligible for a two-times Platinum bonus, giving us 100,000 points that would pay for all of our expenses at $0.30 per point, up to $30,000. She reset the “Currency” app tool to show a different feature that would allow us to request a CASH payment for up to a total of $10,000 at 100%/$0.10 per point, no questions asked. It was a scam.
Complaint #2 A Facebook post describing the same Florida sales agents:
To fellow Platinum members: The latest “offer” involved not having to pay maintenance fees ever again in exchange for taking out a 10-year note on points purchased. They said that by taking out their Barclay card you can have your maintenance fees paid for – hard to believe, but I fell for it. Fortunately, in Florida I had 10 days to cancel, during which time the credit card arrived, so I was able to speak with a Barclay card representative.I sent a cancellation letter. If you are offered this, ask for everything in writing. You won’t get it & the quality control personnel, who are supposed to protect you, are even more ignorant of the facts. If anyone needs further info, please feel free to contact me. (We did and learned the names)
R C complaint #3 Jack, an Air Force Veteran, age 70, October 25, 2018
Jack recorded fraud made by sales agents in Nevada. One claimed a purchase would result in a million-dollar equity position.
According to Jack,
We met with R C in Florida after paying for a course on how to use points. It wasn’t a training course. It was a hard sell. R advised us that we needed to purchase 52,500 additional points to become Platinum to get to 60,000 points. He said that at 75,000 points, in 2019, a new Double Platinum program would be available that would allow us to reduce maintenance fees. No such program was announced.
We purchased points to stay at Great Wolf Lodge. I was not allowed onto the booking site until after the rescission period. I learned it requires 58,331 points ($11,000 in maintenance fee dollars) to book the same week that could be booked online for $1,972.
R C complaint #4, Roy, a retired letter carrier and Navy veteran, age 70
R C was one of several agents who switched Roy from program to program until he ended up with $2,700 a month in loan payments. He had to seek bankruptcy protection having charged loan payments to credit cards.
R C complaint #5, a family visiting from a foreign country here for cancer treatment, 63 years old
I told R C I was unemployed. He said to put down $40,000 income on a Barclay card application because that’s what I used to make. I wrote $38,000. I have the paper where R put a 1 before the $38,000 so that the total income was $173,000 plus $138,000 totalling $311,000. If I made that kind of money, we would have no hardship. I am still unemployed living on Social Security and my wife’s Social Security disability.
R said, “I’m not supposed to show you this letter, but next year your maintenance fee is going to go up to $7,000. If you sign to a trustee your maintenance fees will be taken care of.” He said we would have no maintenance fees on the old contracts if we bought additional points.
R said let me see if I can get you a credit card that will pay 100% back to you for maintenance fees. If I charged $2,000 in a month, sent in vouchers, I would get $2,000 back. He showed me a spreadsheet from a bank. Looking back, that must have been his expense account.
On September 20, 2017, we bought 22,500 points for $25,200 financing $20,766. R said our loan and maintenance fee would be in the same monthly payment. It wasn’t. We asked the closing agent about the maintenance fees offset. We said we were not signing. R talked to her. You could tell she was under pressure because of the change in her expression.
I sent documentation supporting our medical and financial hardship. My wife underwent chemotherapy at a Florida hospital. Cancer medicine isn’t cheap. We have a house that has a lien for past-due taxes. The monthly medicine for chemotherapy is over $2,000 a month. We can’t continue loan payments. When I call, they say they will call me back in 24 to 48 hours but they don’t.
R C Complaint #6, ages 70 and 68, a disabled veteran
November 4, 2019
The salesperson said they would stand by us, but put me off until after the cancellation deadline. A letter from a legal assistant said, “Mr. J makes general statements without providing conclusory details.” We sent a seven-page letter outlining dates, times and emails from a salesman who kept saying “wait until the paperwork catches up and I will look into it.” There is no program to use points to pay fees.
To the Company CEO, (edited for brevity)
To begin, we want you to know that we loved being faithful members of this company. I am a pastor. We bought our first timeshare in 1998 and upgraded about three times. We knew we could never reach Gold membership. I am almost 70 and did not want to accrue more debt. On the afternoon of April 24, 2019, we had our required session with R C. It lasted eight hours over two days. He seemed to show concern. We told him about a half dozen times that we could not afford more payments.
R said that if we became Gold, we would only be paying out about $150 more per month because the new interest rate would reduce our payments. At every upgrade, our prior loan was wrapped into a new loan. We said no. Tim came to the rescue to put another proposal at our fingertips. We asked, “Is this all we will pay per month?” In unison, they said, “Yes, this is what you will pay on the new loan.” However, the purchase increased our monthly payments to over $1,000. We can’t afford this. Tim suggested we put the $10,000 down payment on our Barclay card. I called Barclays but after four tries it would not go through. Tim suggested we apply to get my wife a Barclay card.
They videotaped the closing session. I know we asked, “Is this all we pay?” We understood the new loan payment was to be $634. The closing agent said yes and, “Now make your May payment because your new loan will begin in June.”
We decided to cancel. We went back to the sales center the next day. They went into a sales frenzy bringing out more proposals. Now they said we could use Gold points to pay maintenance fees. It sounded better. Two hours went by, following the prior day’s seven hours. We were exhausted. R vowed he would show us the ropes as to how to pay fees with points, a big smile on his face. After about a week we saw that we owed over $60,000 and our new payment was $1,122 instead of $634! I sent an email. They said the paperwork had not caught up. I contacted the home office. It felt like a one-way street. The agent said she reviewed the deal and the recorded closing session and saw nothing suspicious.
My wife and I are praying that agents will be held accountable. Now, that may not happen in this life. I am sure God will hold me accountable for some things I have done. I am not praying that God brings down timeshare. My prayer is for justice. That is what a Heavenly Father does. Along with His discipline, He accompanies it with love.
Ecclesiastes 12:13-14 – Let us hear the conclusion of the whole matter: Fear God, and keep his commandments: for this is the whole duty of man. For God shall bring every work into judgment, with every secret thing, whether it be good, or whether it be evil.
I am working on a website, guided by counsel, to enlighten folks about high-pressure timeshare sales. Financial lives are at stake. I may be beating in the wind, but I must do something.
2023 pro-industry Florida legislation
Thank you, Irene, It is amazing how an industry can be so blind to not just consumers concerns but also organisations such as BBB, what other industry ignores and rejects proposals to make relations between consumer and supplier better?
Timeshare was once a “quality” product, let’s say the “Rolls Royce” of the vacation industry, with resorts that were far superior to most, It worked with very few breakdowns if any, and it was aimed at a “niche” market. But just like the motor industry, timeshare had its Henry Ford’s, “sell” to the masses, and make a fortune, and that was the downfall of timeshare. As with the Model T, timeshare was marketed aggressively, and the key phrase was “SALES SALES SALES”, but like the Model T, it broke down constantly, with problems with booking, no availability, their lies that you need to “upgrade” to a better model and total dissatisfaction from consumers.
The motor industry learned its lesson, it began to produce “quality” cars for the masses, and they have just kept on getting better, The wayside is littered with those who didn’t heed the warnings. In Europe that effect has already been felt, the timeshare industry is not the force it once was, it is a shadow of its former self. Resorts closing down to timeshare and reverting to “commercial” use, hotel & resort chains ending leasing agreements with timeshare developers, and not to forget the number of timeshare & sales companies that are in liquidation, and some are under investigation for international fraud.
The industry in Europe believed it was immune from prosecution, it believed the laws and consumer protections didn’t apply to them, and their own self-importance and greed kept them blind. It is now one of the most laughable industries in Europe, consumers don’t trust it, and the number of owners seeking out has steadily increased, this Unfortunately has increased their vulnerability to “exit & claim” scams, yet another incarnation caused by the industry not listening.
The US timeshare industry needs to seriously look at itself, start listening to the concerns of consumers and other organisations, such as the BBB, take note of what they are proposing, and engage directly with your members and not through your “self-centred” sales agents. Begin the process and start to “EARN” the trust of consumers, it is they after all who will decide if your business is worth it.
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That is all for this week, we hope you have a great weekend, Baby Dog came round for a visit, I think he needs a rest from his “hooman cousins”, he just flaked out on the tiles after a big cuddle.