Information Provided by the Federal Trade Commission:
But we also know that — whether it’s the steady paycheck, frequent relocations, or other aspects of military life — scammers target servicemembers and their families. In 2022, military consumers reported over $414 million in losses to fraud.
Take a minute to consider the mottos of our military services: Always Faithful (Marine Corps), This We’ll Defend (Army), Aim High…Fly-Fight-Win (Air Force), Always Ready (Coast Guard), and Always Above (Space Force).
Honor and duty are drilled into servicemembers from the minute they start boot camp.
Timeshare sales agents also go through a kind of boot camp. We began hearing from former timeshare sales agents, managers, and even a few executives in 2016. When one former sales agent told me which sales center he worked at, I asked if he knew the names of two agents whose names we know well, for the wrong reasons. The former agent said he was told to shadow one of the agents I mentioned because of his experience. I will repeat the comment made verbatim, having watched John Oliver’s timeshare rant. Mr Oliver didn’t hold back. The trainer advised this person and all his trainees, “If you don’t fuck them, someone else will.”
An ARDA timeshare industry lobbyist was recently quoted as saying that the industry has worked hard over the past decade to improve the practices of the 80s and 90s. The comment above was made at a sales center within the last few years. Since 2016 several Developers have paid out collectively well over $33 million in settlements due to unfair and deceptive marketing, sales and lending practices, most without admitting wrongdoing. In Florida, one “QA” agent (aka the contract closer) spent four years in jail after having burglarized seven houses, some while occupied. I believe in second chances, but should this person be working in lending? He is one of several with impressive criminal backgrounds.
I have known many honest timeshare sales agents. I built my brokerage business in Hawaii partly by going from resort to resort signing up sales agents for stock trading or retirement accounts. Back then, many were independent contractors, which the IRS really didn’t allow. Many of the agents and former agents I know are as alarmed as we are about astonishing deceptive tactics that are reported to us daily.
Active duty servicemembers have lifestyles and circumstances that make buying a timeshare riskier than it is for the average buyer. They can be deployed on a moment’s notice and their lives are at greater risk due to the perils of serving our country. Anyone’s life circumstances can change for the worse, forcing a timeshare loan default, but if a servicemember defaults, they can find their security clearance in jeopardy. This can lead to involuntary separation from service.
Timeshares are financed between 12% to 19% and there is no resale market for a timeshare encumbered with an outstanding loan. Below are 12 military timeshare nightmares submitted by servicemembers who shared their experience hoping regulators take note. Ten are recent, one is from 2017, and the 12th is a veteran with a security clearance who served 24 years overseas. He was denied a hardship release despite being diagnosed with a fatal lung disease. He works at the Pentagon while awaiting a lung transplant.
Developers know it is in their favor that the servicemember’s military career can be ruined if they default. They will argue that resorts have hardship departments, but such resolutions are an uphill battle, a battle especially difficult to fight when serving our country or fought by spouses left behind.
The Military Lending Act
Congress passed the Military Lending Act (MLA) in 2006 to protect servicemembers from predatory lending. Developers have been arguing in the courts that timeshares should be exempt from the MLA because a timeshare stay is the same as a residential stay. The MLA prohibits arbitration that Developers vigorously demand, and go to great lengths to compel. Your grandma’s timeshare was real estate, as it was a specific week deeded to the buyer. Today’s non-deeded, right-to-use timeshare points bear no resemblance to actual real estate.
At oral arguments I attended in Orlando last year, listening to the debate over whether timeshare should be exempted from the MLA, a witness for the Developer defended their 1,500-weekend giveaways per year to servicemembers explaining that some of their executives are veterans. You can imagine my reaction when I had just talked to the veteran referenced above, who bought from that same company:
I am a 100% disabled combat Army veteran. I served 24 years overseas in Iraq, Bosnia, and Afghanistan. In 2021 we bought a timeshare for $20,000, financing $19,305. My combat-related medical condition worsened. I have idiopathic pulmonary fibrosis, a fatal lung disease. My only option is a lung transplant, but in order to be moved up on the transplant waitlist, I have to be on a ventilator. Our agents promised that if we did not want to continue with the property, we could request to get out of the loan with no penalty. Our agents also said we could offset the cost of the property by renting the timeshare out and they would assist us with the process. We had to stop making loan payments. I work at the Pentagon and my position requires a security clearance. We filed a complaint with the Florida Attorney General on April 1, 2022, through the Military and Veterans Assistance Program. The Attorney General on April 4 responded that there was no misrepresentation. Our promised 90-minute presentation turned into six hours. I suffer from PTSD and TBI. I did not live in the US for 24 years. Since my return, I have experienced more stress being in the US than being in war.
Our first servicemember report was in 2017. The most recent report was submitted on July 1, 2023.
Our 50-minute presentation in Virginia ended up being 5 hours. We were told by the SUPERVISOR, that we would have no problem getting a lower interest rate since my husband was in the service. All we would have to do is supply the lender with “duty orders” and it would go down to 1.5% as long as he was overseas. We later learned banks don’t finance timeshares.
In 2015 we purchased 15,000 points in Virginia for $63,232. Our loan balance (in 2017) stands at $42,159.68, financed at 14%. Our monthly loan payment is $856.52. In 2016 we attended a meeting in Florida because we had a life change and could no longer afford loan payments. We wanted to relinquish our ownership per the buy-back program that they said they had when we purchased. The account representative said they did not have this program. Jose, the Supervisor, recommended we buy more points as that would lower our maintenance fees by taking back the trial product we had previously purchased. They said we had to transfer our Virginia points to Florida because we live in Florida now. It cost $4,898 to do the transfer. We later learned there is no difference between Florida and Virginia points. Our sales rep, Joaquin, promised to help resell our points if needed. After a few calls and emails, I was ignored. Information that wasn’t true:
1- The timeshare is an INVESTMENT that is tax deductible and we could later sell for a profit,
2- We could rent the timeshare for additional income or to offset maintenance fees,
3-We would be able to refinance at a lower interest rate with any financial institution,
4-The sales agent would act on our behalf as a personal representative to help us rent out our timeshare
Ten recent reports
- A Navy Chief Petty Officer seeks release from Tahiti Village, a Soleil Management resort. According to statements made by Soleil’s representatives, they will not take a timeshare back under any circumstances. The officer paid a timeshare listing agency Soleil recommended $600, to no avail. In November of 2021, he paid an exit company $2,800 and has received nothing but email updates. He is currently deployed in Japan.
- A Homeland Security agent, and a Marine veteran, with 26 years served, resolved his dispute by working directly with his resort.
- Active duty Navy, 12 years served, a father of four, purchased a minimum number of timeshare points for $12,000. They paid an exit company $6,000. They lost in arbitration resulting in a $66,000 judgment against them. The amount included the resort’s attorneys’ fees. “The presentation lasted seven hours with six agents. They said we had to make our decision that day. Our children were restless. We were told this was an investment that would help us when we bought a home. The agent said he was giving us a great deal because we are military. Riding back to my room, I asked the agent and her fiancé, ‘If I change my mind tomorrow what happens?’ They laughed and said it was too late. I signed on the dotted line. I later learned I had five days to cancel. We were not given a copy of the contract, only a tablet that did not work well. They mailed the documents. Upon review, I learned that the interest rate is astronomical.”
- Active duty Navy, 18 ½ years served, in 2019 purchased points for $36,034, financing $32,000: We repeatedly told our sales agents we could only afford $1,500 in maintenance fees. They said if we purchased additional points, we would be eligible for a program to offset 50% of the fees by charging purchases to the resort’s Barclaycard, but it turned out this would only offset fees by 1%. We were offered a settlement of $16,000, half our loan amount. We refused. We would have to borrow the money. We were not given a copy of the contract, only a tablet, but the tablet did not work. The mortgage agent and manager said they would send the documents. We never received them. We charged the $4,000 down payment to their Barclaycard believing this would offset about half of our maintenance fees. A Barclays rep said that was not how it works. I had a breakdown and hung up the phone. We are a single-income family and I will be deployed this year. One of my children has special needs.
- 5 & 6, are husband and wife, both active duty Air Force who purchased multiple times: We were first told in 2016 that the timeshare would be easy to sell back because we are military. In August of 2021, in Tennessee, we complained about rising maintenance fees. We told this sales agent that ALL agents said we could sell back. She said we could not and that we would have to hire lawyers to get out. She said the only way to lower maintenance fees was to combine our 3 contracts which required buying points we did not need. We owe an estimate of $75,000 for one contract and $50,000 for the second. Fees increased even though we were told they would decrease. We used to use the points two or three times a year but due to deployments, we can only book about once a year.
- As above
- A Homeland Security agent resolved his dispute.
- Active duty Air Force National Guard, 8 ½ years served, purchased a 4 BR unit, despite being a family of three: “In September of 2021, we bought a 4 BR “Unlimited Getaways” week for $50,954.42, financing $44,711.19. We were told about an owner who rents her unit online with AirBnb. They talked about unlimited Getaways that we could buy and sell to others. The agent said there was a loophole so that we receive the income. They explained that the variable rental rate was $49 to $399 per week, but we could turn around and rent it out for around $1,000 or whatever the market bears. My fiancé attempted to find renters, but there were too many extra fees and obstacles. Our sales agent told us they had a deal because someone was giving up a unit. They said if we ever wanted to sell we could as the original price was $75,000. Before we signed documents, our sales agent said not to mention anything that was discussed.”
- Marine active duty served 9 years: “We purchased a 2 BR Villa in Kissimmee in 2021. Our sales agent told us military members often buy timeshares. We were concerned about not being able to use it when deployed. They said no problem because we could rent the timeshare out and use the money to pay our mortgage or fees, or we could sell the timeshare. We were offered a timeshare that was a little over $24,000. We declined. We were told to sit tight. The agent came back with a man ‘in charge of the military department’ who stated that they had just bought back a unit from a service member with a mortgage paid down to $12,000. We didn’t have the money for a down payment. They offered to set up a payment plan to finance it. We learned they don’t buy back timeshares. The purchase price was $12,230.09 and the amount financed was $10,650.”
- A July 1, 2023 report: “I served 19 years with the Army National Guard. We could afford our first purchase. We received a call from someone who said they had a 2BR unit with more points. They said it was a special offer and that our loan payments would only cost $100 a month more. They emailed the documents. The loan payment was $200 a month more. At the time we thought we could afford $400 a month. A person came to our house with a witness for our signatures. I will be deployed to Kuwait next year. My income will decrease by $40,000 per year. We cannot afford this. The company said they will do nothing to help us. I have a security clearance. My wife is a veteran. We have two small children.
Report 6, Active Duty Air Force
One would have thought that after all the years we have been highlighting Military Consumer Awareness Month, we would not still be receiving horrific reports from not only Veterans but those still serving and may be on Active Duty, but we are. I receive constant messages from Irene with yet another “Nightmare on Timeshare Street”, so we have to ask Why?
Over the past couple of weeks, AIT has published a few articles highlighting the industry and its trade body ARDA, these have been under our banner “Smoke & Mirrors”, very appropriate when you start to delve into their “publicity” or to give it a real term “propaganda”. Yet this is the body which is “supposed” to be “responsible” for its members to follow their “Code of Ethics”, but as we have seen so many times in the past, only when it suits them.
Sales Agents who are employed by those ARDA members are using techniques which under the Code of Ethics should not be taking place, so how are they breaking the MLA and getting away with not being sanctioned and brought to task by ARDA?
Quite simply, the developers are ARDA.
This is the problem, in Europe, the developers through the RDO tried their damndest to water down the draft proposals for the Timeshare Directives. In the UK they succeeded, UK timeshare law is very basic, yet in Spain, they failed miserably. The first laws were actually very fair to both parties, with full disclosure being required, contracts a maximum of 50 years and not perpetuity. The industry was given plenty of time to implement the new laws and also exempted contracts signed before the laws came into force to remain unaffected.
The industry failed to abide by those laws even though the RDO “Code of Ethics” clearly states that members operating in foreign countries must abide by the laws of those countries. They didn’t, yet the RDO supported the developers in their appeals saying the “Judges” (including the Supreme Court) had misinterpreted the law!
The RDO even had as a “Director” a man who was at the forefront of one of the biggest timeshare frauds in European history, the Silverpoint debacle. We should also point out that Silverpoint was also one of the RDOs biggest contributors, yet the RDO refused to intervene on behalf of hundreds of consumers who had been defrauded.
Need we go on.
That is all for this week, please leave your comments and show support for those who serve. We hope that you all have a great weekend, hopefully, it will not be too hot for Baby Dog to get out and about, I need my sofa back.