Class Actions: Are they Viable or Just a Con?

We start off this week with a look at “Class Action” lawsuits, are they what they are cracked up to be?

Over the years there have been many attempts at these types of legal actions, some have been successful others not, it certainly looks like a game of legal roulette. The reason for this article is a rather disturbing piece of information posted on one of the closed groups catering for Diamond and Hilton members.

The post was asking if any other member of the group had received an unsolicited telephone call, “cold call”, inviting them to attend a meeting on 18th or 19th March, this suggests a two-day event and they expect to be full.

The “purpose” of the meeting is to “inform” members of a “Class Action” lawsuit against Hilton Grand Vacations, they claim the reason is “breach of contract”, as Hilton offers weeks to non-members for “rent” when members cannot find any availability.

Want to know more, then reserve your place with a $30 “refundable deposit”.

Yes, you did read that correctly, you pay to “reserve” your place, but in the good old world of timeshare, there is always a but, is this deposit only refundable if you sign on to the lawsuit?

We have seen this tactic used countless times not just for “class actions” but also to attend “sales presentations” and the excuse for the “deposit” is likely to be along the lines: 

“We expect to be busy, so this is the only way we can reserve a place for those genuinely interested”.

Plausible, but nonetheless, it is a sales presentation, they are going to want to make money out of you.

So what of the lawsuit and their claim?

The subject of availability is one we have heard so many times, we know that quite often we find resorts with no availability advertised on booking websites, infuriating members. This is an ongoing problem and it is one that has grown as the membership base for points and club based “timeshare” has also grown. Dwarfing in some cases the available number of timeshare weeks against the ever-increasing membership.

This apparently is their basis for the “breach of contract”, so does their claim hold any water?

It may be the case if the “resort” was total timeshare owned by the timeshare company, but we are talking about Hilton, the club HGV is but a small part of the whole operation, so the inventory purposed for “timeshare is limited”, the rest of the hotels or resorts inventory is standard public offerings, nothing to do with the club.

A European example is The Radisson Blu Resort & Spa at Golden Bay Malta is a normal hotel resort, but part of the resort is “leased to a timeshare” club (not owned by Radisson). Members there know that they will see the hotel listed elsewhere. So would they have a claim for no availability, somehow I think not.

This is probably the case for many resorts, the timeshare companies will lease out either whole resorts or just part of the resorts, they do not actually own the inventory and it is limited. It is a problem many owners in Europe have faced for years with many of the major companies.

A case that has similarities to this “claim” was the RCI Action which began in the US and was then attempted across the “Great Lake” in the High Court of London.

In the US the case never actually made it to court as a settlement was agreed, although RCI maintained it had done nothing wrong. In London, the court did find for the plaintiffs but it was very limited.

Both cases centred on the point of RCI using inventory “banked” as exchange weeks for “their own purposes and profits”. A point RCI contested vigorously.

They agreed they had used banked weeks, but it appears they had a valid reason, they were unused or about to expire inventory. We have all seen the emails from RCI and II offering “Bonus Weeks”, that is exactly what those weeks are, unused inventory.

In London, the court seems to have accepted this argument although ruling that RCI were at some fault. At the same time, the court rejected the claim of financial loss, in other words, the plaintiffs had not lost out financially. It looks like the court believes that RCI may not have been clear to members on what they do with unused weeks, without reading the T & C’s in detail we don’t know if it is mentioned.

The last we heard about the case was RCI had filed a claim for their legal costs to be paid by the plaintiffs, so far we have found nothing public on the closure of this case. (Nothing unusual for the High Court).

The one thing which the original call for members to join the class action did have was a very negative effect, it created a host of “dubious” companies vying for clients, many being scammed in the process.

One action which we suppose could be classified as a class action and is being very successful is the BPF, FCA and Azure case. The one thing, in this case, is that all plaintiffs have exactly the same issue, regardless of the timeshare they purchased through Azure. It is all centred around the brokering of the loan agreements by an unauthorised broker. A very clear breach of financial regulations, yet the FCA failed to acknowledge this point and validated those loan agreements.

This is what you would classify as a genuine “Class Action”.

So do HGV members have a hope in hell’s chance of winning this case or is it just another way of fleecing already desperate members of more cash?

AIT thinks you really all do know the answer, with the amount of money available to Hilton, we are sure the army of top lawyers will make this case a walkover. To us, it looks like a very dubious case indeed.

We hope to bring more on this story in the future, we are sure someone will attend just out of curiosity and let us know direct from the inside. (Secret Shoppers where are you?)

Have you had issues with availability, were you shocked to see your resort advertised, did you know how the inventory system works, was it explained when you first purchased or upgraded?

We welcome your comments on this and other subjects published, you can either leave a comment on the relevant post or use our contact page to email us.

We hope you had a good weekend, Baby Dog certainly did, after his morning walk he just crashed out by my desk.

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