Military Consumer Month – Unfair Forced Arbitration – Report 3 of 6

Report 3: Active Duty Navy, 12 years served  

July is Military Consumer Month. We are hoping a lawmaker or a regulatory agency, like the Federal Trade Commission, or the Consumer Financial Protection Bureau, will realize the risk that unfair arbitration rulings and predatory timeshare lending have had on those who serve to protect us. No service member should find their military career in jeopardy only because of a timeshare loan. Due to the lack of a viable secondary market, a default is often unavoidable. Timeshares are financed at 12% to 19%.

Report 3 concerns a Navy service member, a father of four, who received an adverse arbitration ruling – a $66,000 judgment despite buying only a minimum number of timeshare points. Included in the $66,000 is over $50,000 of the resort’s attorneys fees. A default places his security clearance in jeopardy and he could be involuntarily separated from service.

Report 1 of 6: Navy, Chief Petty Officer, 14 years served

Report 2 of 6: Marine Veteran, 26 years served, security clearance

Report 3: Unfair Mandatory Arbitration

Private and binding arbitration agreements, and non-disclosure agreements (NDA), secure silence. A timeshare company may require a NDA even when a non-dispute voluntary surrender is granted, or if upgrading by switching from one program to another within the same company.

Most timeshare contracts include an arbitration agreement buried in the fine print. There is an opt-out provision, but only a handful of timeshare buyers opt out. There is a FAIR act before Congress seeking to eliminate pre-dispute forced arbitration:

This bill prohibits a pre-dispute arbitration agreement from being valid or enforceable if it requires arbitration of an employment, consumer, antitrust, or civil rights dispute.

Arbitration is not allowed under the Military Lending Act (MLA). Being debated in the courts is whether a timeshare mortgage is the same as a residential mortgage because a residential mortgage is exempted under the MLA.  Most timeshare programs have converted to right-to-use, non-deeded points that allow a member the right to book a vacation in the future, depending on availability. This, and given there is virtually no secondary market for a timeshare with an outstanding loan, it is incomprehensible how a timeshare mortgage could be compared to a residential mortgage. Timeshare developers are vigorously taking action to compel arbitration for both customers and employees. The following actions were taken by Westgate Resorts, Diamond Resorts and Bluegreen:

  1. As of February 1, 2022, Westgate owners cannot access loyalty benefits without agreeing to arbitration. It seems a catch-all as older contracts only waived the right to a jury trial. This was likely in reaction to a lawsuit that had been filed against Westgate alleging Westgate violated the MLA. The lawsuit was filed on February 2, 2022.
  2. A former Diamond Resorts sales manager filed a lawsuit against the company describing in her complaint how arbitration agreements were handed out to the sales force shortly before tours/sales presentations were to begin. Case 1:22-cv-00340-MSN-IDD She stated that sales agents were not allowed to begin selling that day until the agreement was signed and, to her knowledge, a copy of the agreement was not provided. We will be examining this lawsuit in greater detail in a future article.
  3. The courts denied Wyndham’s request to compel arbitration, ruling that a publicly filed lawsuit could proceed because of what the courts consider to be an intent to stall. Case 2:20-cv-11480-KM-JBC They (plaintiffs) brought a claim in arbitration before the AAA (American Arbitration Association), as required by their agreement with Wyndham. The AAA declined to hear the claim, because Wyndham did not cooperate with their procedures, and advised the Plaintiffs that they could sue in court. Plaintiffs then filed this action in state court, asserting contract and consumer-protection claims. Wyndham removed the action to this court, and— chutzpah alert—now moves to compel arbitration. (DE 3.)1 For the following reasons, the motion to compel arbitration is DENIED…. 

The ongoing nightmare for today’s Navy military family began on Halloween, 2017. Due to security clearance concerns, we will not name the service members or their location.

On October 31, 2017, in Orlando, sales agents wanted us to buy lifetime timeshare points after we had purchased a trial program. At a mandatory orientation, we said no because we were planning to buy a house and were afraid buying a timeshare would go against our credit. A sales manager came out and assured us that buying a timeshare was like buying a home. He said it was an investment so that when we went to buy a home, the mortgage company would see that we already had a payment history.

The presentation lasted seven hours with six different sales agents. Our children were restless. All the agents let us know several times that this was a “TODAY ONLY” deal. They said we were getting a great deal because my husband is military.

We agreed to purchase the minimum number of points, but were sceptical and voiced our concerns. We felt rushed. Our sales agent, Adriana, said they would summarize the important pages of the contract and I could read through the whole thing in my spare time. They charged a down payment to two credit cards that they opened for us. One card was charged $500 and another $1,500. The sales reps had the credit card mailed to them at the resort, ran the transaction, and then mailed the cards to my home a week later. We financed $10,000.

My husband could not read through the contract because he had to leave with the kids. Our baby needed to be fed and changed. By the time we finished, the office was closed, lights had been turned off, and everyone was ready to go home. Only Adriana, the person we signed documents with and I were left. I was not given a copy of the contract. They said they would mail it. I was given a tablet as a free gift when we were leaving. If the contract was on the tablet, they did not tell me. The tablet only worked for six months and I did not know how to use it.

Since my husband had left, Adriana and her fiance gave me a ride back to my room. I started to have second thoughts. I asked, “If I change my mind tomorrow, what happens?” Adriana’s fiance (and sales manager) laughed and said that since I’d signed on the dotted line, it was too late. He assured me that their resort was the best company on the planet. He specifically said there was no window of opportunity to get out. I later learned that in Nevada there is a five-day period in which a contract can be cancelled.

Even if we had been given a copy of the contract, we would not have been able to determine that the few points we purchased were not enough for our family of six. Availability is not part of the contract.  Since we did not have access to the booking site, we could not have determined this during the rescission period. When I did gain access, I could not find availability with the number of points we had. With kids in school, we have to travel during peak seasons. We had been told we could take a week’s vacation every year.

I called the resort’s customer service department to have someone explain the contract, I found out that the interest rate is 19.99%. We were told that because we became members near the end of the year we would not be required to pay 2018 maintenance fees. This turned out to not be true. They told us that after our loan was paid off, we would have no maintenance fees. That wasn’t true. The agents said our prior points would roll over into the new contract. That didn’t happen.

There were other problems. I called Member Services three times to book a stay. They said I had to pay a nonrefundable $100. We had asked our sales agents if there were other fees. Also, Adriana and her fiance said that I would be able to travel with or without my husband. He deploys a lot. However, the three times I found availability, I was informed that I could not book unless my husband was with me.

Realizing that the timeshare was unusable, we retained an exit company because the resort would not help us. We paid them $6,000. They said it was a one-time fee. The representative said that they had a 99% success rate. I asked what would happen if we were in the 1%. We were told the worst thing would be that we would still own the timeshare and be responsible for the loan.

The exit company obtained a copy of the contract. The resort had only mailed a packet of information containing information about the points, like a Member Guide.

In October of 2019, the exit company referred us to a law firm. They told us we would be required to go to arbitration. We were given no warning that we could incur a devastating $66,000 judgment. My husband could lose his security clearance and be involuntarily separated from service. I would have never put our family in that situation.

We did not know until the arbitration hearing that the resort had sent a letter that said we had two options. Option A was to settle our debt. Option B was to not make further payments and they would consider the contract null and void.

I don’t know how the military can allow timeshare lending. We never used the points.

Our Military After Inside Timeshare Contributors 

After Inside Timeshare has received reports from 11 service members, just this year. Two have been able to resolve their dispute. Three of the service members lost money to exit companies.

Related Articles:

In 2020, Timeshare Sales were #9 on the FTC’s Top Ten Scam list and Timeshare Resales (fake buyers) #10, totalling $31 million:

BB&T denied arbitration: A Closer Look: Arbitration Clauses Added to Account Agreements Face Risks After Supreme Court Declines Review of Sixth Circuit’s BB&T Decision

Bluegreen and the MLA:

CFPB Director Rohit Chopra, Penn Lecture on regulation inadequacies

Thank you Irene for working with our contributors to get their stories across, whether consumers are military or civilian, these sales practices are abhorrent and there is no place for them in any society. Today’s story is one of the most blatant testimonies of a timeshare sales agent and their manager lying through their teeth. What does the developer say about all this, “We are not responsible for what our sales agent says”, it is nothing more than the authority and licence for sales agents and managers to lie and cheat their way to huge commissions, at the expense of the consumer.

The “Today and Today Only” offers just confirms the industries thinking, forget the future, and think about today first. The fact the sales practices and lying are destroying (if not already) the reputation of a product that could be so much more, European consumers have seen it for the sham it is, and more consumers around the world are doing the same. Instead of developing the industry, sales are destroying it.

I am reminded of  Gerald Ratner’s speech in 1991, he was the head of the large and well-known jewellery chain Ratners, although the products were for mass consumption, they were popular and reasonably priced. His speech, which was supposedly “tongue in cheek”, it did have profound consequences:

“We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, “How can you sell this for such a low price?”, I say, “because it’s total crap.” Gerald Ratner 1991.

It wiped £500 million off the value of the Ratner Group, and he eventually resigned, the company is now part of another group. This example may not be timeshare but it does show how even a remark intended as a joke can destroy a business.

That is all for this week, we hope you all have a great weekend, Baby Dog has already decided what he is doing.





  1. Benn Dover

    Developers are responsible for what their sales agents say, they just allow the misrepresentation because it’s profitable. I’ve asked for a copy of Westgate’s code of ethics but never received a response, which leads me to believe they do not have a code of ethics. If you don’t have a code of ethics you can break the code. If the Developer hired the agents they have the ability to discipline or fire.

    1. Irene Parker

      ARDA has a Code of Ethics and I believe Westgate is a member

  2. John

    So, the salesperson can say anything they want – and are protected by the contract. The salesperson can market a product so small that it is unusable. The salesperson can fail to disclose the interest rate, which would make most people puke. And the salesperson can omit any discussion of the rescission period.

    I’m thinking that this is not a presentation that most people should attend.

  3. John

    Predatory lending at its finest. Mislead and misdirect, utilizing the situation their advantage is the status quo for tactics. Always using a stall tactic to make you uncomfortable and to be pressured in signing just so you can leave, saying you can cancel the contract within 10 days. Ethics and morals seem to be in short supply.

  4. John J

    Predatory lending at its finest. Mislead and misdirect, utilizing the situation their advantage is the status quo for tactics. Always using a stall tactic to make you uncomfortable and to be pressured in signing just so you can leave, saying you can cancel the contract within 10 days. Ethics and morals seem to be in short supply.

  5. Samantha

    Extremely unfortunate circumstances. My fiancé and I are both veterans and had the unfortunate experience of briefly owning a timeshare. Like everyone else it was based on lies and half truths. We sought an out that was promised but it was a dead end. We found, in our case, defaulting on our loan and taking the credit hit and IRS income increase was the best thing for us. We have since mostly recovered thankfully. We are still asked on credit pulls and we provide the honest answer about the lies we were told and the inability to refinance to a lower interest amount resulting in default.

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