One of the most recognizable brands within the industry, the Diamond Resorts International timeshare was established twenty-five years ago, in 1992 and founded by Stephen J. Cloobeck. You may remember seeing him on Season 4 (twice) on the “Undercover Boss” television series. An irony that is not lost on timeshare owners in Arizona, who filed for legal action against the organization.
The business is headquartered in Las Vegas, Nevada and owns timeshares in virtually every country, including Canada, Brazil, France, Spain, the Canary Islands, England, and other choice destinations for vacation fun. Diamond Resorts International is privately held, after being bought by Apollo Global Management on June 29, 2016. In 2013, the timeshare company reported annual earnings in excess over $230 million dollars.
Diamond Resorts International Not Above the Law in Arizona
In a precedent setting case for the timeshare industry, the Arizona Attorney General resolved with a settlement agreement with Diamond Resorts International. The State of Arizona required an ‘Assurance of Discontinuance’ that required Diamond Resorts International to settle for an $800,000 award, after losing and being ordered to pay timeshare owners restitution.
The legal suit was filed after hundreds of complaints were received by the State of Arizona, against Diamond Resorts International. Specifically, the timeshare company was accused of:
Misrepresentation of timeshare owners, by annual increases in maintenance fees that were disproportionate compared to other industry leaders.
Timeshare resale services and buy-back programs that may or may not have been fraudulent, and a source of revenue without providing service to existing owners.
Misrepresentation of the timeshare buyer’s ability to resell the timeshare, to profit, or transition the contract to another owner.
Misrepresentation of the buyer’s ability and potential to drive revenue, by renting timeshare weeks for profit.
According to case details, the Attorney General’s Office declared that the misrepresentations, promises and sales tactics were in direct violation of the Arizona Consumer Fraud Act. Diamond Resort International was required to comply with a new “Relinquishment Remedy Program”, which legally requires Diamond Resorts International to allow consumers who meet specific requirements, to return their timeshares to the company with no liability or further financial obligations.
Diamond Resorts is appealing the legal decision handed down on December 23rd, 2016, but the terms of the settlement also included an agreement that the organization would comply with consumer protection laws, and change business practices.
Alleged Aggressive Sales Tactics and Sampler Packages
Discussed in the case proceedings were multiple complaints about the highly aggressive, and pressured sales tactics used by Diamond Resorts International timeshare sales professionals. Some of the consumer complaints alleged that the sales presentation was promised to be an hour, but consumers were detained for more than five hours.
Another contention of consumers who attended the sales presentations, was the fact that they were assured that they could cancel their purchased contract within ten days, or two full business weeks. Many consumers were angered when they found that the cancellation policy reflected calendar days, not weekdays as their sales representatives had indicate. Falling 1-2 days after the rescindment deadline, and locked into a timeshare contract they did not want.
For individuals who were not convinced that timeshare ownership was the right choice for them, Diamond Resorts International offered a “VIP” opportunity, through a lower cost sampler package. Averaging about $3,000 USD., the sampler allowed a family to visit different timeshares that were actively ‘recruiting’ new members, and consumers were assured that the properties were luxury resorts.
Many reported that the popular resorts were always ‘to capacity’ when they tried to book, and the only vacation time they could spend with Diamond Resorts, was at several less popular two and three star rated properties. They were also informed after signing, that to participate in the discounted offer of stay at the 2-3-star resorts, vacationers would be required to attend a sales presentation, every time.
The good news is that American law makers are taking a long, close look at the timeshare industry again. We hope that more people step forward and stand up for their rights, when it comes to fraudulent, high-pressure sales tactics, or illegal contract and presentation methods. What makes our role as timeshare cancellation experts even more important, is the opportunity to educate consumers, and help them take action, when they have been the victim of a fraudulent contract.
Call 1-800-587-EXIT for a free consultation today. Be free of your timeshare contract in 12-months or sooner, with the American industry leader in timeshare cancellation.