Monday, November 21, 2016

The "Myth" of a Timeshare Repurchase Program

Lots of discussion lately about various timeshare repurchase programs.

Today we are reprinting a piece that discusses the one offered by Club Intrawest/Embarc.  Read it.  It has implications for ALL timeshare owners.

As Club Intrawest/Embarc members grow older and their families mature (or their health changes) vacation needs are re-evaluated. For many, retirement brings the time and the opportunity to take more vacations at the Clubs. For others, a fixed income, poor health or a change in vacation preferences means that they would like to take advantage of the much-touted "repurchase" program offered by Intrawest for members who purchased their points before 2013 in order to get some money back for their points. 
Here's what Embarc has posted on the FAQs in the HOA section of the Embarc website:
What is the Embarc Repurchase Program?
A Resort Points Repurchase program was created for long-term members who have owned their Embarc Resort Points for a minimum term of 5 years and who must have purchased their Resort Points from Intrawest directly on or before February 13, 2013 or from IROC U.S. or RVLP on or before June 30, 2013, whichever applies. This program offers eligible members the opportunity to have their membership repurchased. Members who apply within the calendar year are eligible to have their membership considered for repurchase in January of the following year on a first come first served basis. There is no guarantee that sufficient funds will be available in any given year to repurchase Resort Points of all Members who apply. The attached form can be completed by any Embarc member making a request to register their Resort Points for this repurchase scheme. Please click the question link above to access the Repurchase Request form for Embarc ownership. Fill out the form completely and send either via mail to The Landing, #326-375 Water Street Vancouver, British Columbia, Canada V6B 5C6, via fax to 604-682-7842, or via email to Once received, your member services team will submit your request for consideration.
What the Repurchase Program really is...
Sounds good doesn't it? A way to give back your membership to Embarc and a guarantee that you get money back in exchange. The statement above, which DRI has posted on the member site, may get you high on hope but it is short on details. In fact, there are many caveats*:
1) the dollar amount budgeted each year for the repurchase of member points is limited to 1% of the Developer's last year's sales
2) the developer will pay varying amounts based on these criteria:
  • each qualified member who has owned all of his or her tendered resort points for less than 8 years will be paid a purchase price equal to the lesser of sixty (60%) percent of the original purchase price or forty (40%) of the lowest current sales price charged by any developer on a sale of the same number of resort points as at the date that the repurchase request was received by Embarc.
  • each qualified member who has owned all of his or her tendered resort points for 8 years or more, will be paid a purchase price equal to the lesser of one hundred (100%) percent of the original purchase price or forty (40%) percent of the lowest current sales price charged by any developer on a sale of the same number of resort points as at the date that the repurchase request was received by Embarc.
3) for the purpose of this program, original purchase price means:
  • for all tendered resort points purchased prior to November 5, 2005, the original price paid for the tendered resort points (excluding all applicable taxes) paid in connection with the purchase of the tendered resort points and any payment for resort fees
  • for all tendered resort points purchased after November 4, 2005, the original purchase price means the purchase price paid in connection with the purchase of the tendered resort points and any payment for resort fees, less the sum of $600.
* Disclosure: these three points are based on the details in Table 16 of the Club Intrawest Instruments dated 2006. Embarc may have changed the criteria, but if they have, (in my opinion) it is unlikely to have been in a way that advantages members positively.
Let's read through this again to understand exactly what is being said
So let's assume that Embarc sells about 300,000 points a year (there are about 4.4 million points total in the trust with about 6 to 8% belonging to the developer so this is an extremely generous amount) at an average price of $175cad (a price several members have quoted as being the final, offered price for a purchase of points at a sales meeting). This means Embarc would have sold about $52,000,000 of points in a year. Therefore, if 1% is allocated, $525,000 is set aside for the repurchase program. Assuming that Embarc gives back, on average $10,000 per membership, this means about 50 memberships are bought back per year which is what has been reported back as the member progress up the list. It's less than 50 if they are giving back more than $10,000 on average. 
1) 1% of the developer's last year's sales is set aside to repurchase member points. How much is that? We don't know because we don't have access to the developer's financials (only the Club's). What we do know, because of members reporting this, is that they have been moving up the waiting list by about 40 to 50 positions per year. 
2) the purchase price: the lesser of either 60% or 100% of purchase price (depending how long they were owned) or 40% of the lowest current sales price charged etc.
How much are members getting back for their points? The lesser amount.
So, for the purchase price calculation, you can calculate how much you would get if you take the amount you paid (for me, $125 a point in 1997) and I would get $75 a point at 60% (if a shorter-term owner) or $125 a point at 100%. 
My Calculation:
If the lowest current sales price was $200 per point, I would get the lesser of $125 or $80 a point. It almost always works out to the 40% of the lowest current sales price being the lesser value. This means I should get about $10,000 for my 120 points when my turn comes up.
There is, however a major problem!
What is this problem? It's that so many members have put their names on the repurchase list that according to the last report in our Facebook group, a member adding their name to the list today would be in the 3000+ range on the list. That's right - there are so many members on the list that it could take about 50 to 60 years before your turn came up!
Why is this happening?
It's because there is no secondary (resale) market because of the policies put in place by the developer which restrict the resale point owners to using their points only within Embarc (no ExtraOrdinary Escapes, no Interval membership). If there were a secondary market with points being sold at a reasonable price, members would not be "forced" to relinquish them to DRI. Therefore, the only possible way to get out of the membership is to either sell one's points at bargain-basement prices ($20-30 per point has been quoted recently), give it to someone or to simply surrender them back to Embarc so the member does not have to continue to pay the yearly fees.
If you were thinking that the Repurchase Program was going to be your "exit strategy" from Embarc, think again!

Friday, November 11, 2016

New Attorney Named in Ongoing Manhattan Club Case

This is far from over.  This is maybe the fourth attorney on the case.  Let's hope something good comes out of it.

Here's the information:

The new lead attorney on the TMC case is Elissa Rossi. She replaces Serwat Farooq.

Next Manhattan Club Court Hearing

Court: New York Civil Supreme

Index Number: 451536/2014



Future Appearances:

Appearance Date: 02/03/2017

Appearance Time:

On For: Motion

Appearance Outcome:



Comments: 2:30 PM


Wednesday, November 2, 2016

An Open Letter to Dave Ramsey and Laura Ingraham

Dear Dave and Laura:

It’s come to my attention that both of you have endorsed separate timeshare related companies.  Both of these companies specialize in offering one or more so-called “relief” solutions to timeshare owners.

You may have done a cursory “investigation” into these companies; you may not have. You may have received a hefty compensation from these companies who will pay handsomely for someone who wields so much influence with consumers.

But it’s obvious that neither of you know the whole sordid, sad and extremely harmful story behind these companies.  It’s even more obvious that neither of you know that you are being “duped”, "just like all of the media that brought Donate for a Cause on their programs...creating unqualified credibility to their less than transparent programs.

Sure, timeshare owners may have had their names removed off of the timeshare deed.  Is that enough for you to endorse them?  Here’s some other questions you should have asked before granting your influential stamp of approval:

·        How much money did these companies charge these timeshare owners for their services?
·        How did these companies obtain the names, phone numbers and e-mail addresses of these timeshare owners?
·        How many of these timeshare owners have now fallen prey to scam vacation clubs which were pitched as an alternative to timeshare?
·        What happens to these thousands, or millions of timeshare properties once these companies “remove” the names from the deeds?
·        What are the long-term implications to the timeshare resorts and the remaining millions of owners there?
·        Are you even aware of the regulatory activity in this sector of the timeshare industry?

Let me guess…you didn’t bother asking these “pesky” questions, did you?

Well, let me assist you here with some answers:

·        Some of these timeshare owners were charged over $6,000 to get their name off a timeshare deed.  Seems a bit outrageous doesn’t it, when a name change can be done by a notary public for less than $300 in most cases.
·        Where indeed did these lists come from?  Did you know that most of these companies obtain stolen or misappropriated lists?
·         Many of these vacation clubs require a buy in of up to $10,000 and provide no better vacation deals that an average consumer can find with an Internet connection.
·        Did the timeshares go back to the resort or the HOA in question?  No they did not.  They ended up in the names of LLC companies that have no intention of ever paying the annual maintenance fees that are needed by resorts to effectively maintain the resort’s upkeep for the millions of owners and exchangers that happily use them each year.
·        Timeshare resorts that provide quality vacation experiences for millions of consumers are forced to increase annual fees to remaining owners.  Those remaining owners find it harder and harder to afford their vacations each year and fall prey to these companies that you endorse who operate on scare tactics.  Once a resort reaches 35% of inventory with unpaid fees, the so-called tipping point, they are faced with the very real probability of having to cease operations.
·        There are many people who operated these countless schemes of "cancel/transfer" who are serving time in federal prison and will never pay back millions in court ordered restitution. 

I’ve been writing about timeshare and assisting timeshare owners and potential owners for 16 years.  No one has been more outspoken than I have about the need for the industry to change and improve.  However, these companies that you willfully choose to endorse, leading to untold numbers of consumers to trust your judgement and throw their hard earned dollars at are doing incalculable and permanent damage to timeshare resorts, the people that work there and the people that own there and continue to receive the many benefits of owning a timeshare from.

What will happen to YOU, Dave and Laura, when these companies who have used you as a public speaking pawn ultimately stop operating or get shut down, which they will?  How will you face those consumers who put their blind trust in you and used these companies, creating disaster in their wake?  Who are YOU going to turn to for advice when you realize you have been victimized by these nefarious companies?  Or are you simply going to take the compensation money and go on vacation?