By Charles Thomas and Irene Parker
In America, the 4th of July holiday weekend kicks off Military Consumer Month.
July is Military Consumer Month. Whether you’re a new recruit, a service member PCS’ing with your family, or a soon-to-be veteran, the FTC wants to share some ways to steer clear of rip-offs and scammers.
After Inside Timeshare has heard, just this year, from six U.S. active duty service members, two ICE (border control) agents, and a veteran employed at the Pentagon who all found their security clearances in jeopardy because of timeshare lending. We will be featuring their accounts during the month of July, hoping the Federal Trade Commission and the Consumer Financial Protection Bureau take note of the risk that timeshare lending poses for America’s national security.
Timeshare Sales appeared at #9 on the FTC’s Top Ten Scam list and Timeshare Resales (fake buyers) at #10.
Our US articles this month will feature reports from the nine service-related timeshare buyers negatively affected by timeshare lending.
Predatory lending in the EU, with regards to timeshare, and serving military personnel, is not an issue we have come across. As AIT is familiar with the UK Services, they will be used as our example.
At the start of the massive timeshare sales boom, it would have been very rare to find serving military attending a presentation. They would not have fit the criteria as a “full tour”, but they may, however, be accepted as a “courtesy tour”. The main reason was the home. All sales decks in Europe would only accept “homeowners”, so renters and council tenants did not fit.
Other rules on attending the presentation included being married or living together for at least 3 years. Now, considering that most serving members of the armed services are young and single, living in “barracks”, they definitely don’t fit the criteria. Those who are married also came under the same rule as council tenants, as the vast majority of married service personnel lived in “married quarters”. In other words, rented accommodation including when the whole family moved abroad. These military “postings” would be around 3 years at least, so holidays tended to be taken in the country of posting or travelling home to the UK to visit the family.
So, loans for timeshare purchases were not a problem. We also have to take into account the British Military Regulations. British servicemen were very much aware that getting into financial hot water was frowned upon, and as usual, there is always some rule that covers it. Lenders were also very wary of issuing loan agreements to serving personnel (could this be down to the dangerous job). How that has changed today is yet to be seen, but as there are no timeshare sales in Europe at present, it is not a problem like we have been seeing in the US.
It is incomprehensible that in America, an active duty service member can be tricked and trapped into a timeshare loan a military family cannot afford, financed at 12% to 18.99%. The loss of a security clearance can lead to the loss of a military career. For deployed service members, the lack of a viable secondary market clearly poses a risk. There is little hope of selling a timeshare with an outstanding loan, and it is not easy to sell a timeshare even if it is paid in full.
After Inside Timeshare has reported on lawsuits filed in America against Bluegreen Vacations Case No:21-cv-61938-RAR and Westgate Resorts Case 8:22-cv-00283-CEH-JSS, accusing both companies of violating the Military Lending Act (MLA). The US Congress enacted the Military Lending Act to protect service members from predatory lending practices that had a documented impact on members of the armed forces and our Nation’s military readiness.
Developers argue that they are exempt from the Military Lending Act (MLA) because a timeshare loan is the same as a residential mortgage. Nothing is further from the truth. Show us a home in America that can’t be sold because there is an outstanding mortgage.
Westgate Arbitration and the Military Lending Act Lawsuit June 17, 2021
PDF Link: Westgate Case No 8;22CV-0028-CEH-JSS
A lawsuit was filed alleging Bluegreen violated the MLA, on January 28, 2022
PDF Link: Bluegreen Case No 21-CV-61938-RAR
Thank you, Irene and all those who have contributed to this ongoing story, the practice of “predatory lending” to those who serve is one which we find abhorrent, but it is just another extension of the way the timeshare industry is hell-bent on making as much money as possible, regardless of the future consequences to their “clients”. As we mentioned, in Europe this does not appear to be a problem, the “predatory lending” was more targeted to those over 55, about to take early retirement possibly due to voluntary redundancies or having recently retired. The redundancy and retirement packages many received were something the timeshare sales departments couldn’t ignore. The plan was to invent “investment packages”, packs of weeks to rent and subsequently sell for a profit, all paid for with loan agreements brokered by the sales staff, we now know the consequences of that move. Both of these examples of “predatory lending” are ongoing campaigns by AIT to highlight a very concerning problem, one which we think the authorities should address with urgency, especially if the industry itself does not do anything.
If you have any comments or would like further information on any article published, please place your comment on the appropriate article or use our contact page and AIT will get back to you.
We hope you all had a great weekend and AIT would like to wish all our US friends a Happy 4th of July, Baby Dog can smell the party already.