Why timeshare presentations should be off-limits for the military
The Marne Minute- Armed Forces Disciplinary Control Board:
John in Illinois is the most recent active duty service member to have reached out because of security clearance concerns. He has served 19 years with the Army National Guard. John is to be deployed to Kuwait for a year.
Members of our National Guards carry an additional burden. When deployed, they may have to leave a high-income job, replaced by lower pay received during deployment. In John’s case, this leaves him with no choice but to default on his Hilton Grand Vacation timeshare loan. The person who sold John’s family a Hilton timeshare didn’t deceive them, but the very nature of the timeshare product can ruin his military career.
Defaulting on a timeshare loan isn’t pleasant for anyone, but for a member of the military, a loan default can result in the loss of a security clearance. This can lead to involuntary separation from service. There are also many veterans working in military-related professions that also require a security clearance. Even one active duty service member or veteran losing their security clearance because of buying a timeshare is one too many.
An Armed Forces Disciplinary Control Review Board publication lists 12 reasons that justify why an entity should be deemed off-limits. Provision 11 is unfair commercial or business practices (2-4).
Army Regulation 190–24, OPNAVINST 1620.2A, AFI 31-213, MCO 1620.2D, COMDTINST 1620.1E
Military Police, Chapter 2, 2–1: The AFDCBs may be established by installation, base, or station commanders to advise and make recommendations to commanders on matters concerning eliminating conditions which adversely affect the health, safety, welfare, morale, and discipline of the Armed Forces.
Reasons why timeshare marketing, sales and lending are unfair to our military:
- The timeshare product is sold as being just like real estate or a second home. The contract is perpetual, but there is no resale value if encumbered with a loan. With few exceptions, there is little to no resale, even if fully paid for. Resorts have charged amounts ranging from $1,000 to $8,165 to take back a timeshare.
- The product is financed at 12% to 19%,
- Banks will not finance or refinance timeshares, and not everyone is eligible or has access to a home equity loan,
- It is demanded that the timeshare be purchased on the day of the presentation,
- Existing members are routinely told what they will be attending is NOT a sales presentation when it is,
- A recorded closing is used to dismiss complaints, but the buyer is not allowed to record the sales session,
- The oral representation clause, warning that the buyer should not rely on claims made by sales agents, is buried in electronic fine print rather than disclosed prior to the presentation,
- Documents are provided on tablets that often do not work, or on a flash drive that does not contain the contract documents,
- Predator exit companies, seeking out timeshare members desperate for release, prey on the vulnerable,
- The FTC listed Timeshare Sales at #9 on the Top Ten Scam list in 2020, and Timeshare Resales at #0
John’s wife is a veteran who will be caring for their two small children when John is deployed. Hilton had her fill out a form for release consideration, but the only option was to adjust payments. There was no place on the form to show that their income would decrease by about $40,000 for the year John is being deployed.
According to John,
The Hilton representative we spoke with said there was nothing they could do for us if we have not paid off at least half our loan amount. My income is high now only because I have been working a lot of overtime for a contractor. With our credit cards, home loans, and personal loans, we just cannot make ends meet. We were fine before Covid, but the increase in the cost of living and our debt means we cannot possibly pay for the Hilton timeshare and still meet our other financial obligations.
We bought a one-week studio unit at Las Palmeras in Orlando with 3,000 points at a Hilton hotel in May of 2018. We paid around $20,000 and financed $17,552. Our loan payments were $200 per month. My wife was approved for $5,000 for an AMEX card. I believe we paid $1,000 for the down payment.
We received a call in April of 2021 from someone at Hilton who told us we could upgrade our studio unit to a two-bedroom unit with 8,000 points. They said this was a special offer. They asked us if we had children. Most importantly, they said the increase in our loan payment would only be an extra $100 per month. The purchase price for the upgrade was $23,992. I don’t think the upgrade required a down payment. Our loan balance is $21,045, financed at 15.60%. The representative said that when we cancel the auto-payment, our interest rate will increase to 17.59%.
We received the contract documents for the upgrade by email on April 14, 2021. I reviewed the documents and did see that the loan payments would be $200 a month more, not $100. At that time we thought we could still afford $400 a month, but now we can’t. Hilton sent someone to our home with a contract to sign and brought with him a witness for our signatures.
Hilton asked for John’s duty orders, but they will not be available until next year. There is no question of John being deployed. His training has been restructured in preparation for his deployment. Meanwhile, the family is weighed down by the looming deployment to Kuwait, family concerns, and a timeshare default that could ruin his military career. A regulator, lawmaker, the military, or someone should put a stop to it.
Amicus Briefs have been filed in Support of Military Timeshare Buyers by the following organizations:
The Consumer Financial Protection Bureau and the Federal Trade Commission
THE MILITARY OFFICERS ASSOCIATION OF AMERICA, (“MOAA”) is the nation’s largest and most influential association of military officers. It is an independent, nonprofit, politically nonpartisan organization.
THE JEWISH WAR VETERANS OF THE UNITED STATES OF AMERICA, is the oldest active national veterans’ service organization in America. Incorporated in 1924 and chartered by an act of Congress in 1983.
THE BLUE STAR FAMILIES, Inc. was founded in 2009 by military spouses to strengthen and empower military and Veteran families to thrive as they serve.
JACKSONVILLE AREA LEGAL AID, Inc. (“JALA”) serves an area with multiple military bases, and it frequently represents people in military lending cases that are referred to JALA by the U.S. Navy Judge Advocate General and others.
THE UNITED STATES ARMY WARRANT OFFICERS ASSOCIATION is a veterans service organization that was incorporated as a nonprofit organization in 1974 devoted to the welfare of army warrant officers—serving, former, and retired—and their families.
THE NATIONAL MILITARY FAMILY ASSOCIATION is a nonprofit organization founded in 1969. It is a voice for military families representing all ranks and services.
THE FIVE STAR VETERANS CENTER is a nonprofit that provides combat veterans the services and support they need to succeed in civilian life. The organization has a specific focus on veterans aged 22 through 55 suffering from post-traumatic stress disorder, traumatic brain injuries, depression, anxiety and other related mental health issues. Indebtedness can exacerbate many of the hardships veterans face, including mental health issues and housing insecurity.
THE CONSTITUTIONAL ACCOUNTABILITY CENTER AS AMICUS CURIAE IN SUPPORT OF PLAINTIFFS-APPELLEES AND AFFIRMANCE filed June 28, 2023
The Best Timeshare Stocks to Buy According to Hedge Funds, as reported by Abigail Fisher at Yahoo Finance
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.
Ten reports from military families with security clearance concerns
Westgate Resorts argued during oral arguments that a timeshare stay is the same as a residential stay and, thus exempt from the Military Lending Act. The MLA prohibits arbitration.
Nineteen pages of oral arguments – Wyndham appeals lower court’s decision, refusing to appoint a special arbitrator
Thanks to John for sharing his experience and to Irene for putting this article together, it is just another one to add to the growing list of Veterans and Serving Military who have been targeted by unscrupulous sales agents. They are not alone in taking the blame, their employers are ultimately responsible, sanctioning the sales agents’ underhand tactics and using the “Oral Representation Clause”, a very lame excuse.
What I find very confusing and I think our European readers will agree, considering the amount of “patriotic” fervour in the US, the very same citizens who are being protected by your military are the same people in the business of “ripping them off”. That seems to be a funny type of patriotism.
And what about the lawmakers whom you vote for?
They don’t seem to care one iota, yet they are the ones who will send your young men and women to war!
That is all for this week, we hope you all have a wonderful weekend, Baby Dog wouldn’t let me work the other day insisting I get on the floor and play. I didn’t realise he actually meant slobber all over my face.