The four-day bench trial of Wyndham Vacation Ownership v Carlsbad Law Group and Timeshare Compliance took place the week of October 24. Wyndham accused defendants of leading 230,000 Wyndham members to retain Timeshare Compliance and Carlsbad Law by means of false and misleading advertising, as well as misleading statements made by members of Timeshare Compliance’s sales staff.
Timeshare Compliance was not represented at trial because presiding Judge Wendy Berger had already issued the firm a default judgment. According to Cornell Law, a default judgment is a ruling granted by a judge or court in favour of a plaintiff, in the event that the defendant in a legal case fails to respond to a court summons or does not appear in court. Timeshare Compliance was asked to submit recordings of all sales calls during the covered period. Approximately 400,000 recordings of calls made by salespeople/analysts were produced. Marketing calls were not produced because the marketing representative only qualifies the caller, and then sets an appointment with a member of the sales staff. According to Timeshare Compliance representatives, the default judgment was issued because marketing calls had not been produced.
Statements made by Timeshare Compliance sales agents (analysts)
Recordings played at trial contained statements made by two sales analysts, Courtland Llauger, and Taylor Otto, that were untruthful and damaging. Sales analysts told prospective clients:
- If I decide to take your case, you will be legally and permanently out of your timeshare forever.
- We never lost a single case.
- Once the attorney contacts Wyndham, you’re out.
- If you don’t make payments, you will get out faster. (This was true only because Wyndham typically forecloses in 152 to 180 days.)
- Your credit will be preserved.
Timeshare Compliance records sales calls, but Wyndham sales calls are not recorded. Our nonprofit volunteers feel both sides are at fault. Obstacles to exit, and the lack of a secondary market, created the exit industry. If a purchaser is deceived or misunderstood the product, the buyer is basically stuck if they financed the timeshare (at 12% to 19%). You can sell a house with an outstanding loan, but it’s nearly impossible to sell or give away a timeshare encumbered with a loan.
The Better Business Bureau has a Consumer Alert posted on Wyndham’s profile, warning consumers about reports of deceptive tactics employed by Wyndham sales agents. As of December 4th, 1,204 BBB complaints had been filed within the last three years.
Pattern of Complaints:
BBB files indicate that this business (Wyndham) has a pattern of complaints concerning misrepresentation in selling practices. Consumer complaints report that the verbal representations are inconsistent with the written agreement. According to complaints, claims include representations that the purchase is an “investment” and the same as “real estate” in that it will increase in value. Owners report mandatory meetings that they are led to believe are to introduce new features and benefits but result in a sales presentation to purchase or upgrade their points. In some instances, owners are encouraged to complete a survey or questionnaire which results in another sales presentation to purchase additional points.
Wyndham complained about damage to their goodwill. Our volunteers have interacted with thousands of timeshare members. People who feel they were deceived, as most report, have no goodwill towards their resort. Wyndham described allegations as “nonsensical and baseless” which is likely due to the “oral representation” or “non-reliance“ clause, buried in the fine print of a voluminous contract. This short paragraph basically says that the purchaser agrees that they did not rely on anything their sales agent says to make their purchase. As I was preparing this report, on November 22nd, we received this message from a Wyndham member, whose complaint will likely be dismissed as baseless and nonsensical (we are waiting to see how Wyndham responds to his Florida Attorney General complaint). According to the member:
We have a Wyndham Vacation & Resorts timeshare. Oddly, someone else seems to have our same member ID. This has caused complications. We were told to go to their office the next day for an hour to get this resolved. Not only was it not resolved, they basically tricked us into an “upsell” situation, to buy a new mortgage with more points. The gimmick they used was to say that the monthly maintenance fees with our existing plan would go up significantly in 10 years, so we should go with a different plan now. The new mortgage was for $60,000. Now, however, not only do I have a much higher mortgage bill, my maintenance which was supposed to be cheaper is actually higher! This should have never happened. We were seriously misled and taken advantage of.
Wyndham’s written closing arguments, filed on November 18, seek injunctive relief, “prohibiting Lawyer Defendants from further contributing to the Telemarketers false advertising through acceptance of referrals from the Telemarketers” and “disgorgement of profits” of $156,750.
According to Cornell Law: Due to its coercive force, a grant of injunctive relief is subject to immediate review by an appellate court.
Injunctive relief is generally only granted in extreme circumstances. The party seeking preliminary injunctive relief must demonstrate (1) irreparable injury in the absence of such an order; (2) that the threatened injury to the moving party outweighs the harm to the opposing party resulting from the order; (3) that the injunction is not adverse to the public interest; and (4) that the moving party has a substantial likelihood of success on the merits. https://www.law.cornell.edu/wex/injunctive_relief
Carlsbad attorney Sean Slattery received approximately $150,000 in revenue during the period of time the lawsuit covered. Mr Slattery was paid $750 to send a “cease and desist” and a demand letter, yet Wyndham sought to recover $30 million. Mr Slattery stated at trial that Wyndham dropped the demand for $30 million two weeks before trial.
I was invited to visit Timeshare Compliance in early 2019 to help them with a self-advocacy program under development. I remember Timeshare Compliance Plaintiff Rich Folk mentioning to me, before any lawsuits had been filed, that they had retained an expert at significant cost to make sure they were operating within the law. The recordings played at trial, which contained false statements made by sales analysts, had been corrected in part prior to lawsuits having been filed. I was told, in 2019, that a “money-back guarantee” had been removed. “Legally and permanently” was also removed. Some of the statements played at trial were no longer allowed after the legal expert reviewed operations and defects had been corrected.
At trial, attorneys for Wyndham Plaintiffs frequently stated that, despite Timeshare Compliance clients charged $6,000 to $39,000 or more, no work was performed after referring the timeshare member to Carlsbad Law, or another law firm, to write the two letters. Sean Slattery brought up during his testimony, that when Hilton Grand Vacations sued one of their clients, pursuing a judgment on a promissory note, Timeshare Compliance paid a New York law firm $30,000 to defend the client. In other words, if additional work is needed, the attorney is paid from money paid to Timeshare Compliance. Calls from clients after the attorney is retained are responded to, according to Timeshare Compliance representatives.
During the trial, recordings were played that provided evidence that credit was not protected in many cases, despite sales analysts stating credit would be preserved. Trade bloc was the firm used to provide credit protection. Credit protection is now provided by a separate, affiliate company, UD Prep, (United Documents). A credit monitoring service is available for $17.95 per month. When a negative report is noted, a letter of explanation is sent explaining why the report is disputed. From the UD Prep website: https://udprepme.com/
UDPrep offers credit dispute, credit counselling, and credit education services. Our specialized team is solidly trained and continues to stay current in the industry to be able to advise best and support our clients. We don’t use group training methods. We look into our clients’ profiles and take time to understand where they are and where they want to be; in order to be able to execute the best plan for them.
Courtroom Semantics – Harm v Damage
What remains the most bizarre ruling by Judge Berger, happened when Carlsbad Law’s attorney, W. Scott Gabrielson, objected to the claim that Wyndham was harmed by members who defaulted, because ultimately, Wyndham doubled their money. He stated that of the 934 loans covering the period of the lawsuit, 483 loans were taken back. The total amount of loans taken back was $18 million, but Wyndham received $35 million reselling the loan, doubling their money.
Judge Berger acknowledged that Wyndham may have ultimately benefited in the end, but that had no relevance in calculating the harm Wyndham suffered. She explained that juries calculate damages, so since there was no jury, the fact that Wyndham doubled their money is not relevant.
The deadline for final court filings is December 9. We continue to follow the outcome of this lawsuit. What is really on trial is the entire exit industry. Some law firms agree that the exit companies should not exist. But one fact remains, people need help. Developers have sued several law firms. Eliminating law firms dedicated to timeshare law is not the answer.
Will exit companies be a thing of the past? The jury is still out. There are more lawsuits pending.
Wyndham Canceled $700 Million in Mortgage Loans (lawsuit settled)
According to his lawsuit, it was around September that year (2019) when he discovered more than $700,000 in timeshare mortgage contracts had been cancelled by his company on the same day, all with the same code: “Per Mgmt Request due to project.” Chief Operating Officer Geoffrey Richards told Sapien in a conference call the company had reversed more than $300 million in contracts in order to “insulate” the stock price by making the company’s default rate look more in line with competitors. In 2019, Sapien was the senior vice president of sales and marketing for Club Wyndham Bonnet Creek.
Part I Wyndham v Carlsbad Law and Timeshare Compliance
Yahoo Finance author Abigail Fisher
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. Check out this Reddit post where the user is asking several questions about Wyndham timeshare cancellation. This person was able to cancel and receive a full refund, but many consumers don’t cancel within the 7-day or 10-day window specified in their contracts.
Timeshare Compliance has an A+ BBB rating with 28 complaints
Thank you, Irene, as with all lawsuits it is now down to waiting for a judgment, for the lawyers it is a time for their own reflection, did they present their case well enough, did they cover all the bases, and was their closing argument strong enough? All these questions will soon be answered and one side will not be happy. Their lawyer will have lost his argument, his interpretation of the law was not strong enough to sway the decision in their favour.
This is what all trials are about, it is not a case of right or wrong, it is how the law itself is interpreted, one lawyer will explain it in favour of his client, the other theirs. Who is correct? It is called “Semantics”, in the article “More on Semantics – Is it a Timeshare or a Vacation Club? – Wyndham’s Availability, Or Lack Of” it was explained in this sentence: “Semantics, the art of word manipulation, is used to very good effect by Civil Servants and Politicians, Marketing Companies and above all by the Legal Profession, we encounter it every day yet we don’t realise it.”
It is one judgement we “await with bated breath”, it may not seem to be, but this is actually a very important case, not just for the developer or the firms involved but also for the consumer. When it is finally announced Irene will be putting pen to paper and giving us the low down.
That is all for this week, we hope you all have a great weekend, all we have planned is to spend time fooling about with Baby Dog. He was not very happy in this picture because he couldn’t go out as it was raining with thunder and lightning.