Thursday, August 18, 2022

Dynamic Pricing? More Like Pull A Number Out Of A Hat Pricing


If, like me, you attempted to/were able to purchase tickets for Bruce Springsteen and the E Street Band’s US tour next spring; you’re undoubtedly aware of the horrendous dynamic pricing structure that TicketMaster was implementing. This dynamic pricing structure resulted in nosebleed seats going for more than $1,000 and standing room only floor access going for more than $5,000 in some arenas. 


It’s been a public relations nightmare for Bruce and his management who went along and even justified this to the dismay of many long time fans. 


This dynamic pricing structure is very similar to the pricing structure in place by both many/most timeshare developers and the nefarious self-proclaimed exit companies. 


As I’ve written about previously, there’s no MSRP for a timeshare. Disney Vacation Club is the outlier in the industry, as their prices are easily discoverable and oftentimes readily posted on social media sites. 


Consumers have no way to compare prices between developers even in the same location, or even between different owners in the same resort. 


That’s because the sales personnel are trained to quote an often insanely high price after which the drawn out negotiations begin. The consumer may think they’re getting a deal, when in truth, they’re paying some arbitrary amount based in large part on what the sales person/sales manager thinks they can afford. This was the procedure way back in 2000 and as I’ve discussed in previous posts, still common practice today. 


While John and Mary might end up paying $20,000 for 100 points at XYZ Resort, Rodger and Janice might end up paying $22,500 for the exact same thing. Rodger and Janice will never know this unless they run into John and Mary at the pool and strike up a conversation. Then again, John and Mary might be disappointed to learn that Tim and Nancy were able to negotiate their purchase price down to $17,350!


The entire process is opaque and puts consumers at a disadvantage. 


Not surprisingly, the nefarious self-program claimed exit industry operates the same way. Not surprisingly because most of those employed in the exit industry either got their start in the timeshare industry or carefully studied the playbook. 


Take for example the following actual amounts paid to one of those exit companies that’s currently in litigation with a major timeshare developer:


$5,367

$10,950

$20,000

$8,501

$8,100

$25,300

$7,180

$7,500

$5,910

$7,992

$9,147


These are all actual fees charged to “exit” owners from the same developer!  Seems arbitrary, huh?  Worse yet is that NONE of these consumers were able to get out of their timeshare. 


Compare those prices to what an attorney will charge. I spoke with attorney Andrew Meyer of The Finn Law Group in Florida who told me that his firm “charges a fixed fee that could be as low as $3,750 or higher depending on the complexity of the matter and if the consumer has more than one timeshare. In any event, the fee is agreed upon before any contract is signed so there are no surprises.”  Unlike the scammy exit companies, this firm actually does something for the money which more often than not results in a positive outcome for the owner. 


The moral of all this is that the consumer is almost always in a losing situation when it comes to pricing in the timeshare industry and the cottage industries that have sprung up around it. 


All the more reason to not make impulsive decisions when buying a timeshare, engaging with a company that claims to get you out of a timeshare or sadly, purchasing concert tickets. 


See you in the nosebleed seats at The Amway Arena in February. 

Wednesday, August 10, 2022

Difficult Lessons Learned From A Timeshare Newbie

This is a Guest Post from Kevin B. Kevin had already reached out to The Villa Group to no avail. I offered him this platform in hopes that The Villa Group would do the right thing and avoid the incidents covered in this post getting more media coverage. I still hope that’s the case. 


Difficult Lessons Learned From a Timeshare Newbie

 

 



 

Background

 

Before I recount my experience purchasing a timeshare, I’d like to clarify WHY I’m telling the story.   At 50 years old, this was the first timeshare I’d ever purchased.  In fact, I had never even sat through a timeshare presentation before.  You should have seen their eyes light up when I told them I was a newbie. That’s the root of why I’m telling the story.  To grow awareness of the deceptive selling tactics, and carefully crafted contract language in the timeshare industry.  At the end of the blog, I’ll provide a few suggestions so you can avoid being taken advantage of like I was.

 

I’ve been vacationing in Cabo San Lucas for almost 30 years. I love everything about the town, the culture, and the residents.  At every resort and restaurant you’ll find hardworking staff that are eager to please.  Cabo is one of the only places I’d be happy to visit a couple of times a year, so I had a growing interest in learning more about timeshare opportunities.

 

Earlier this year, my wife, two kids and I spent a week a Villa la Estancia, one of 4 Villa Group properties in Cabo San Lucas.  I decided this was a good time to start gathering information on various investment opportunities in Cabo.  I wasn’t sure if I wanted to purchase a propertyor start small with a timeshare.  The resort offered a discounted pirate ship dinner cruise, which my boys loved, in exchange for a “tour” of the properties.  I knew “tour” was code for a timeshare pitch but I was OK with that.  I was genuinely curious to learn more about timeshares in Cabo.

 

The Sales Pitch

 

After a quick tour and free breakfast, my wife and I were escorted up to the sales office and provided with free drinks while someone watched our children.  Once we sat down I was introduced to our salesperson Angel Wong.  Angel was friendly and answered all of our questions. Although I was a timeshare newbie, I did know enough to ask about point values. Whenever I’d heard timeshare horror stories, they always seemed to revolve around decreasing point values.  In other words, you sign up, get enough points for one week a year and next you know,  you’re required to buy additional points to maintain enough points to get you a full week.  Angel was VERY clear when he explained that point values won’t change but that my yearly maintenance fee may go up to cover increasing costs, inflation, etc.  I was satisfied with his answer, it made perfect sense.  

 

As our negotiation continued, Angel provided me with hard copy Point Value Charts for all of the Villa Group resorts.  The charts helped me figure out how many points I needed to purchase to get the desired number of days I wanted per year.  He was also quick to point out a brand new resort that has just opened, Villa la Valencia, and provided me a Point Value Chart for that property as well(Figure 1).

 



 

The first three offers presented to me were more expensive than I was comfortable with.  Angel’s boss came over and together they made a final offer which gave me the number of days I was looking for at a price within my budget. I was excited, we moved forward with signing the agreement.  Despite Angel’s assurance that point values are static, I was careful to read the agreement for any mention of changing point values.  There is no mention of Villa Group having the ability to change point values anywhere in the agreement that I signed and initialed. Keep this in mind as you read the rest of my story.

 

Double Checking the Points Value policy

 

After signing the agreement I felt both excited and nervous.  One of the reasons for my excitement was a day pass Angel had arranged for us the following day at the new Villa La Valencia resort.  Our experience at Valencia was awesome, we were there for 5-6 hours.  They have a gorgeous infinity pool that overlooks the ocean and a lazy river that my boys both loved!  Any apprehension I had about purchasing a timeshare was put to ease by the wonderful day we spent at Villa LValencia.  I was looking forward to coming back as soon as possible.

 

When I’m on vacation, I like meeting new people.  I’m one of those people who will strike up a conversation with a perfect stranger.  While at Valencia, I had a conversation in the pool with a current vacation club member.  He mentioned that point values at Valencia were more for him because Valencia didn’t exist years when he signed up and was given his Point Chart Values.  I wasn’t alarmed by what he had to say.  It made sense that when a company opens a new resort they can set those point values at whatever they’d like.  Because I was given a hard copy Points Value Chart the previous day when I signed the agreement, I had no reason to be suspicious, the point values were already set, but just to be safe, I texted Angel to confirm (Figure 2).  

 

Angel, did in fact reconfirm my point values, and reiterated that Point Value Charts are the source of truth when it comes to points.  Had I misunderstood his explanation of point values the previous day, this would have been a great time for Angel to clarify.  Instead, he doubled down with his assurance that my point values were static.  His response was immediate, and well within the 5 day window I had to cancel the agreement.  Had he told me that point values would be changing I wouldn’t never have signed the agreement until I knew what the new point values would be.

 



(Figure 2)

 

The Villa Group Dishonest Sales Practices

 

In mid-July, 2022, less than 3 months after signing my agreement, I called resortcom.com, the Villa Group service company, to book Villa la Valencia for December.  I provided the agent with the 5 days/nights we preferred for our stay.  He informed me that my points were only enough for 4 nights.  My heart sunk; this was the moment I realized something was awry.  I informed him that my Points Value Chart clearly shows that my points were enough to cover the 5 days.  He told me the point value’s had retroactively been changed and that my points were now worth 20% less.  Within days of signing my agreement that point values were changed on me.  I was irate! I tried calling my salesperson Angel, who never returned my call so I reached out via email to member services.

 

A few days later I was contacted by Director of Member Services Claudia de Avila.  I explained my situation, she reconfirmed that information I had received from resortcom.com, my point values had changed.  I explained to her that Angel had reassured me on multiple occasions that my point values were static.  I explained to her that I expected The Villa Group to honor the agreement I signed, or I’d like my money back.  She told me she would escalate my request and get back to me. Meanwhile, still no response from Angel, who I have not heard from to this day.

 

The Villa Group Response(s)

 

The next time I spoke with Claudia, she cited a loophole in the agreement which allowed Villa Group to retroactively decrease the value of my points. The following passage is in the agreement which I had signed and initialed.

 

“The consumer and the intermediary agree at the time of the signing of this agreement that the value of the points for a week in the “Future Resorts”, have not been established because the resorts either do not yet exist and/or are not in operation.  The value of the points will be set later by taking into consideration the characteristics of the resort, unit amenities, services and demand at the time of being put to use for Timeshare members.”

 

There are numerous reasons why this statement has nothing to do with my current situation.  Rather, it’s a baseless attempt by Villa Group to explain retroactively adjusting points values on existing members:

 

1.      “Future Resorts that do not exist or are not in operation”.  I visited Valencia on a Day Pass on April 22, one day after signing the agreement.  The restaurants, the pools, pool service, Kids Club, Fitness Club, Spa, lazy river, and mini-mart were all open. Additionally, I found an Events Calendar for the resort dated March 24th, 2002 (Figure 3).  Without question, this resort “existed” and was “operational”, generating revenue for the business.  

2.     “The value of points will be SET later……”.  This is clearly referring to the first time point values are set. This has nothing to do with resetting or changing Point Value Charts that have already been set. Points for this resort had been set already. I have the Point Charts to prove it (Figure 1 above).

 

 

 

 

I explained the above reasoning to Claudia via email and was able to easily refute her assertions that the company was within their right to change point values within days of signing a new agreement.  4 more days passed before I heard from Claudia again.

 

When I next heard from Claudia, via email, she cited a new passage, not from the agreement I signed but rather a passage from the 80 page member handbook.

 

“(4) Club Points Charts.  The Club Manager shall issue Club Point Charts which describe the associate Club Point value required for a Member to use his or her Use Period.  The Club Manager reserves the right to periodically modify, change, and/or amend Club Point Charts.”

 

Isn’t it interesting that there is no mention of changing point values anywhere in the agreement/contract members sign and initial?  I wonder how many people would sign up for the club membership if The Villa Group was clear about changing point values?  

 

At this point, I felt that I still had a strong argument because I possessed the screen shot of the text where Angel provided contrary information regarding point value changes. Unfortunately, The Villa Group has still refused to resolve my situation in a fair and honest manor.  

 

I’m really surprised that a company that makes millions, if not billions of dollars wouldn’t do the right thing for a customer who had clearly been lied to by one of their own employees.  I was also surprised to find a passage in the agreement that allows Villa Group salespeople to tell you anything they want in order to secure the sale.

 

“14. No other representations:  Member understands, verifies and accepts that no oral representations have occurred that conflict with the above clauses and understands any claim of oral representation will not be cause for cancellation of the purchase agreement.”

 

The above statement is a license to lie for all Villa Group salespeople.  They can tell you anything they want with no accountability.  However, it does say “above clauses”,there is no mention in any of the above clauses, or anywhere in agreement that allows The Villa Group to retroactively change point chart values.

 

What I would later find out BLEW MY MIND

 

Since mid-July, when I realized my points were worth 20% lessI’ve been pressing The Villa Group for the specific date the Point Value Chart for Valencia was changed, and details on how the change was communicated to existing members.  After multiple requests, I finally received a partial answer.  The point values were changed on May 1st.  I couldn’t believe it.  I signed the contract on April 27th.  The agreement I signed clearly states that I had 5 days to change my mind and terminate the agreement for a full refund.  72 hours after signing the agreement they changed the terms of the agreement by changing my point values.They made these changes within the 5 day window I had to cancel the agreement but they conveniently did no communicate the change to existing members, specifically those who were still within the window of cancellation.

 

Lessons Learned

 

As I mentioned earlier in this blog, the reason I’m telling this story is so others don’t make the same mistakes that I did.  There’s not much you can do about a dishonest salesperson but here are a few tips that should reduce the chances that you’ll be taken advantage of.

 

1. Show me, don’t tell me:  Rather than ask a question like, “Can The Villa Group change point values retroactively?”, instead say “Show me in the contract where point values are static”.  
2. Read the entire handbook within your cancellation window:  It’s not a coincidence that something as important as changing point values is not mentioned anywhere in The Villa Group membership agreement.  This was clearly done by design.  Had there been mention of changing point values in the agreement, I would have been able to point out the inconsistency between what Angel had told me, and the contract language.  Take the time to read your member handbook, cover to cover, and ask follow-up questions if anything is unclear.  If they’re not able to provide you with an acceptable answer, this should be a red flag.  Cancel within the 5 day opt out period.
3. Research the timeshare company prior to your tour/presentation:  During my timeshare presentation, I asked Angel and his boss if I could have the night to think about the offer.  They were adamant that if I left the room, the offer was off the table.  Do your research in advance, this way you’ll know if the timeshare company has a good reputation.
4. They can do whatever they want, you must accept that:  Given the lengthy agreement and 80 page membership booklet, typical with most timeshares, you should assume there is probably a loophole for everything.  In my case, they couldn’t find anything in the agreement citing their ability to change my point values, but they did cite a passage buried in the handbook.  This is why it’s so important to choose a reputable, honest timeshare company who treats their members fairly.

 

Next Steps

 

I’m not sure if there is any legal recourse for my situation.  The fact that they changed my point values within the 5 day window of cancellation and didn’t communicate that to me is my strongest point if we have to litigate.  I’m currently exploring my legal options and have filed a complaint with Profecothe Mexican government office for consumer protections.

 

Regardless, of whether or not there is a legal path to resolution, I’ll always have my voice. I’m a member of numerous Facebook forums for the various Villa Group properties as well as forums for Cabo San Lucas tourism.  Additionally, as a Villa Group member, I’ll have plenty of opportunities while visiting their resorts to share my story with prospective customers.  

 

After providing The Villa Group with a draft copy of this blog, and giving them the opportunity to refute any of my accusations I received another response from Claudia.  There were more references to legal loopholes and a thinly veiled threat of libel. She sent me this passage; the last sentence was underlined in red:

 

“(g) No negative Statements or Actions.  No member, User or their respective Related Parties shall at any time directly or indirectly take any action and/or make, publish, file or record any oral or written statements that would likely have a negative or injurious impact up the Club and/or its Related Parties except in the connection of enforcing the Governing Documents and/or as required by Applicable Laws. No Member, User or their respective Related Parties shall engage in any action that is derogatory, defamatory, libelous, or slanderous to the Club and/or its Related Parties.”

 

Telling the truth is not derogatory, defamatory, libelous, or slanderous.  Isn’t it interesting that when given the opportunity to correct my version of events they had nothing to dispute?  Also interesting that in addition to having a clause that permits the salespeople to lie, they also have a clause that tries to intimidate anyone who dares to expose the lies publicly.

 

For my own legal protection, let me be clear. I’m not accusing The Villa Group of breaking the law.  The Villa Group is under no legal obligation to resolve my situation, they should do it because it’s the right thing to do. I signed up under false pretenses and had my contract changed within the 5 day cancellation windowRather than give my request fair consideration, they’ve decided to flex their corporate muscles, and hide behind a pile of legalese.  That’s well within their right.  I’m also well within my legal right to tell my story to as many people who are willing to listen.

Thursday, August 4, 2022

What The Salesperson Said

 I’ve covered this topic before, but since I keep receiving so many emails and read so many social media posts about “what the salesperson said”, it’s time to talk about it again.  


If you are required to attend a timeshare sales presentation, and you are required to do so if you’ve accepted any type of bribe/incentive, you’re going to talk to a salesperson. Not a vacation counselor, not someone from corporate wanting your thoughts on their new program, or anything else they may call themselves. This salesperson who may or may not be licensed, is working for the developer, not you. 


This is important to remember because they won’t divulge this except in the mounds of paperwork generated should you decide to purchase. 


Why is this important?   


The salesperson has no fiduciary relationship to you at all. If they’re licensed, they are the seller’s agent, not yours. Read that again. They’re the seller’s agent. 


Now, granted this does not give them permission to lie to you. It also doesn’t give them permission to leave out material facts. But what qualifies as material?  For some people, information about the ability to resell is material. For others, information about exchanging is all they care about. I can tell you from personal experience as a salesperson and manager, it’s impossible to cover everything about a timeshare; which is why I wrote 2 books as well as co-authored a college level textbook on the topic. 


All of this is to remind you that the only things that you can count on is what’s in the contract and accompanying paperwork. Even ARDA-ROC, in a document that we wrote together last year stated: “Finally, make sure to get all of the terms and conditions of your purchase in writing. You cannot depend solely on verbal representations made during the sales process. If something is important to you and is a major reason you want to purchase, then make sure to get it in writing.”