If we could snap our fingers, and change the timeshare industry back to the original business model it was, we’d be out of business, but consumers would be protected by law, against some of the most shocking, covert and malicious sales practices we’ve ever seen. Our job is to stand behind the consumer, when they have tried unsuccessfully to escape their timeshare contract, with legal tools and resources that work. We think it is important to shoe these class action law suits to our consumers to let them know they are not alone in the timeshare battle.
There are two ways to look at the recent number of class action suits, against some of the timeshare industry’s biggest players. First, it’s embarrassing for them, particularly when evidence is presented that shows a culture of deliberate misinformation and aggressive (illegal) sales and service practices. Second, it is an opportunity for Americans to really see the shady underbelly of an industry, that makes billions of dollars of profit annually, on the backs of hardworking consumers who feel trapped.
We share three class action suits from 2017, that got our attention, and represent the good, the bad and the ugly aspects of the timeshare industry.
The Marriott Vacation Club and Florida Timeshare Law
How far will major players in the timeshare industry go, to retain the business culture that creates financial and emotional distress for Americans? The Orlando Florida based division of the Marriott Vacation club, has been accused of using business influence to change a state law, that will help ‘get them off the hook’ in a pending lawsuit they are facing in 2018.
Marriott Vacation Club was sued in 2016, as a result of what owners are calling predatory contracting and time-share policies. The legal suit was represented by Jeff Norton, a New York attorney, who alleged that the organizations entire sales procedure and structure, was based on an illegal racketeering scheme. Norton furthered that the points-based system was layered on top of an existing structure, that also sold timeshare deeds to real estate entities.
Jeff Norton stated in court, that the timing of the proposed state law in Florida, coincided with Marriott Vacation Club providing notice regarding a change in policy. Essentially, the attorney alleged in writing to the court, that the timeshare “could not justify the legality of their conduct under existing law, [and] they endeavored to change the rules”. Two Central Florida legislators introduced changes to the Florida timeshare laws in late 2016, a few short months after Marriott Vacation Club was named in a class action suit.
The lawsuit alleges that the Marriot Vacation Club, and the First American Title Insurance Company, are engaged in racketeering activities. The MVC is accused of a deliberate and illegal scheme to earn from fees charged on timeshare transactions, which falls under the United States Racketeer Influenced and Corrupt Organizations Act. Lead attorney Jeff Norton has alleged that MVC and First American constitute a RICO criminal enterprise, to allow MVC to make withdrawals from an escrow account, fed by sales of invalid timeshare estates, with title insurance premiums charged, in absence of a legal land or property title.
Marriott Vacations Worldwide Corporation (Orlando) claims ownership of 60 resort properties, 12,800 vacation ownership suites and villas, shared by 410,000 vacation club members in the United States and eight other countries.
Ben Wilcox, a representative for the non-profit government watchdog group ‘Integrity Florida’ stated for an article in the Orlando Sentinel, that he felt the “timeshare law changes [were] suspect”. The new law states that historic timeshare owners, who currently own deeded weeks of time, are not ‘interest holders’ in the present-day points based system.
The new definition of ‘interest holder’ was proposed in the Florida Senate Bill 818, only a few short weeks after the lawsuit briefs and docket were filed, alleging violation by MVC based on rights of current timeshare ‘interest holders’. What does that mean for MVC timeshare owners? If you have paid off your long-term timeshare, you may not be entitled to the same level of benefits, exchanges or amenities (including number of weeks) that newer points-based owners will be. MVC may earn more capital on points-based memberships and properties, potentially leaving traditional contract holders in the cold.
Fornier vs. Diamond Resorts International Club, Inc.
Based on years of experience helping our clients exit their timeshare contracts, we know how aggressive some timeshares can be (particularly when their member wants to be released from legal and financial obligation). It is a vicious circle of communication bullying sometimes by phone, by email and by printed communications, that can make the timeshare owner feel attacked, victimized, and in some extreme cases, traumatized by the experience.
Diamond Resorts International Club, Inc. had a case filed by the Fournier family, in the U.S. District Courts, California Central District in May 2017. The plaintiffs alleged that they bought a timeshare, but then were completely surprised at how difficult it was for them to book their time at any resorts. This is a common issue as overselling vacation time is a regular practice, with insufficient vacation inventory to accommodate all timeshare members.
The Fournier family alleged the following legal violations in their class action lawsuit:
That Diamond Resorts International Club provided confusing, conflicting and misleading responses (and at times, no response at all) to requests to cancel the timeshare contract.
That the timeshare issued threatening letters and cell phone calls, to collect on an account, they considered ‘in dispute’.
That the family had requested Diamond Resorts to stop calling (in writing) but that their requests were ignored.
That Diamond Resort ‘bullied, manipulated and intimidated’ the couple into further upgrading their membership, by coercing them to attend local sales presentations that they were told were ‘update meetings’ for dissatisfied timeshare owners.
The case is currently registered as pending, but this proposed class action suit against Diamond Resorts, cites violations of the Telephone Consumer Protection Act of 1991, the Truth in Lending Act, and other local California business and sales practice/consumer protection laws.
It is hard to predict how class action lawsuits like these 2017 examples, will impact the industry. Will the cost of doing wrong the consumers (and incited punitive settlements) be enough to force some members of the timeshare industry to return to integrity business practices? We can hope, for the sake of the clients we talk to every day, who are stressed, upset, disenchanted and bullied by their timeshare, and by an industry who sometimes sells ‘the dream’ but delivers a financial and legal nightmare, to consumers.