Changes Have Come...In Other Countries

While it may seem that things remain status quo here in the US when it comes to timeshare matters, it’s not the case elsewhere. 

Consider that in Spain perpetual timeshare contracts have been ruled illegal. To date, Spain has ruled in favor of the consumer in a whopping 129 Supreme Court victories. 

In Canada, a decision was reached in July of last year (funny how this story didn’t receive much coverage here) that will likely affect all timeshares and owners of timeshares with properties located in Canada. The Federal Court of Appeal set aside the Tax Court of Canada’s decision in the case of Club Intrawest v. Canada. In doing so, the Court of Appeal substituted its own decision to refer GST assessments back to Canada Revenue Agency for reassessment of GST just for services supplied in Canada in relation to vacation homes situated in Canada.  Federal Appeal Court Judges Nadon, Gauthier and Dawson agreed with the Tax Court’s finding that a principal-agent relationship does not exist between the club and its 22,000 members. 

This decision also confirms that members of Club Intrawest (now rebranded Embarc by Diamond Resorts International (DRI)) do not hold beneficial ownership in the real estate and equipment in vacation home resorts and do not control the Club. The Court found that members merely own a right of occupancy in exchange for their resort points. This contradicts sales presentations, financial and marketing materials by Intrawest Corporation (“Intrawest”) and now DRI, to the effect that members have beneficial ownership of vacation homes and control the Club through election of the Board of Directors, responsible for managing the Club’s operations.

The ruling will require the club to pay reassessed GST back-taxes for tax years 2002-2007. The GST/HST tax liability for tax years 2008-2016 is unknown at this time. All timeshare owners with vacation homes in Canada may be impacted by this decision and may also see themselves assessed for back taxes on the supply of services in Canada related to vacation homes situated in Canada.

Also in Canada, a remarkable piece of legislation passed last month known as Bill 178. This Bill was introduced in April of this year and passed in June of this year. 

Although this only covers the province of Quebec and most timeshares in Canada are located in other provinces, the bill is quite an eye opener. 

Here are some excerpts from the bill which are well worth your time: 

Bill 178 defines a timeshare contract as a service contract and not a purchase agreement involving a property transfer.

The Act proposed amendments to the Consumer Protection Act to introduce a protection regime governing contracts relating to timeshare accommodation rights.

• The Act introduces rules specific to the making of that type of contract and sets out the compulsory information such a contract must include. It grants consumers the right to resolve the contract without charge or penalty within 10 days of signing it and specifies the circumstances in which that right is extended to one year.

• The Act imposes on merchants who enter into a contract relating to timeshare accommodation rights the obligation to establish a payment schedule for each year covered by the contract…..Furthermore, the Act introduces a disclosure obligation related to promotion made by merchants engaged in the business of such contract, prohibits certain stipulations and provides that such contracts may not be automatically renewed.

Division V.3
Contract Relating to Timeshare accommodation rights

187.13 A contract relating to timeshare accommodation rights is deemed to be a service contract

187.14 A contract relating to timeshare accommodation rights must be evidenced in writing. In addition to the information that may be required by regulation, it must contain or state the following, presented in conformity with the model prescribed by regulation: 

• (h) the term and expiry date of the contract;

• (j) the fees to obtain an accommodation right, their amount on an annual basis if they are calculated on a basis other than annual, and the total of such amounts for the entire term of the contract.

• (t) a statement that the merchant may not collect payment from the consumer before beginning to perform his obligation;

• (u) the right granted to the consumer to resolve the contract at his sole discretion within 10 days after that on which each of the parties is in possession of a duplicate of the contract; and

• (v) the other circumstances in which the consumer may resolve or resiliate the contract, any applicable conditions and the time within which the merchant must refund the consumer.

187.15 Any stipulation that results in the automatic renewal of a contract relating to timeshare accommodation rights is prohibited.

187.16 The merchant may not make the entering into or the performance of a contract relating to timeshare accommodation rights dependent upon the entering into of a credit contract.

187.21 The contract may be resolved at the discretion of the consumer within 10 days following that on which each of the parties is in possession of a duplicate of the contract.

That period is, however, extended to one year from the date on which the contract is made in either of the following cases:

• the contract is inconsistent with any of the rules set out in section 25 to 28 for the making of contracts, or one of the particulars required under section 187.14 does not appear in the contract; or

• a Statement of consumer resolution and resiliation rights and a resolution and resiliation form that are in conformity with the model prescribed by regulation were not attached to the contract at the time the contract was made.

187.24 Any contract entered into by a consumer, even with a third-party merchant, on the making of or in relation to a contract relating to timeshare accommodation rights and that results from an offer, representation, or other action by the merchant who is party to the contract relating to timeshare accommodation rights forms a whole with the latter contract and is resolved or resiliated by operation of law at the time the contract relating to timeshare accommodation rights is resolved or resiliated.

In addition, the consumer may, with respect to a contract entered into with a third-party merchant and contemplated in the first paragraph, exercise directly against the merchant a recourse based on the non-performance of the contract or on the provision of this Act.

187.25 Within 15 days after resolution or resiliation, for the reason set out in section 187.26, of the contract relating to timeshare accommodation rights, the merchant must refund all sums paid by the consumer under the contract and under any other contract contemplated in section 187.24, including sums paid to a third-party merchant.

229.1 No person may, when making or promoting a contract relating to timeshare accommodation rights, make representations implying that the contract is an investment, unless the person gives the consumer a document showing the truthfulness of the representations.

A contract related to timeshare accommodation rights is considered a service contract. You may resiliate your contract for other reasons, and you have other rights and recourse.

How long before the US sees legislation such as these passed in Spain and Canada?  My guess is a long time the timeshare industry is deeply entrenched in. They’re fighting hard for things to remain status quo. 

Looking to change things?  Speak up. 

No More Business As Usual

I was recently quoted in an excellent article written by Gregory Holman from the Springfield News Leader. Here’s the link https://www.news-leader.com/story/news/local/ozarks/2018/07/24/better-business-bureau-branson-timeshares-deceiving-consumers/825403002/

The article was one of the most direct and scathing indictments of the timeshare industry and its closely related counterparts that I’ve seen in recent memory. The stories from the affected consumers ring true and sad. 

What I found most surprising about the piece was the Greater St Louis Better Business Study which included some very direct recommendations to both the industry and regulators. You can read the entire Study here    https://www.bbb.org/en/us/article/news-releases/18149-dont-fall-for-deception-pressure-and-traps-disguised-as-vacations-a-better-business-bureau-study-of-the-missouri-timeshare-vacation-club-industry?bbbid=0734

How long before more BBBs and other organizations issue such warnings and recommendations?  The industry bigwigs living it large on their private jets and ensconced in their ivory towers won’t succeed in any attempts to either shut those guys up or try to discredit them as they’ve attempted to do for years to certain consumer advocates. 

You might think that I’m pleased to read this article and the BBB Study. But I’m not. I’m saddened. Saddened that the industry has had every opportunity in the world to fix itself, yet steadfastly refused to. They’ve had every opportunity to work hand in hand with myself and others who have always maintained that it doesn’t have to be a win/lose proposition but a win/win where the industry thrives and consumers can purchase a great product. They’ve had every opportunity to come clean, admit there are some bad companies in the timeshare community, throw those bad companies out of their cabal and then distance themselves from those companies, but they don’t. 

I sense a seismic shift around the corner for the industry and the entire timeshare community. I think the days of business as usual are coming to an end. Don’t say you weren’t warned. 

Why No Advertising?

Have you ever considered why there are no advertisements for timeshare on any media outlets?  All other businesses use mainstream marketing methods and timeshares are a multi-billion dollar industry. So, why is it that they don’t market their products anywhere, instead choosing to rely on OPCs and mini-vacations that don’t mention the benefits of the timeshare?  This is of course followed up by high pressure sales tactics where consumers are given the choice between buying today or not buying at all because of some bogus ‘today only’ price.

Surely it can’t be because timeshares are any more ‘dangerous’ to the public than the litany of drugs with unintended side effects ranging from headaches to ‘your head may explode rendering it incapable of being reattached’ that it’s impossible to avoid when watching TV.

And more than one of those nifty ‘get out of your timeshare’ outfits are buying up radio and TV time with a vengeance.

Could it be that given the opportunity to truly think about the timeshare, the consumer would realize that there is absolutely no value proposition to it?

What do you think?

Stay Clear of This Sales Tactic

So, you’re sitting with your timeshare salesperson who has just shown you the price of $52,000 for ‘your week of paradise.’  You politely say ‘no’ adding ‘we already have a timeshare and we can’t afford maintenance fees on both of them.’

Wouldn’t you know it, the sales manager has a DEAL for you!  He comes back showing you that they’ll take $20,000 off the price of the timeshare they’re pitching because they’ll take your present timeshare as a ‘trade in’, bringing your price down to only $32,000. HOW can you possibly say no to this?

Here’s how and why you need to say ‘no.’

>Unlike car dealers, timeshare developers don’t have methods of off-loading other timeshares. 99 times out of 100, if you say ‘yes’ to this offer the manager will either have a last minute change of heart and tell you that they’ll honor the $20,000 ‘trade in discount’ but generously allow you to keep your other timeshare. 

>That $52,000 was a price they picked out of a hat, as was the $20,000 ‘trade in discount.’  In reality, you have absolutely no way of knowing what the ‘base price’ of the timeshare actually is. (Note that there is at least one developer that is transparent with prices, that being DVC.)

Don’t fall for this sales tactic. Tell the salesperson at the onset of the presentation that you’re setting an alarm for the promised time frame. Promise them that you’ll give a straightforward answer to their questions as well as give them a definitive yes or no answer to the buying question if and only if they promise to show you ONE price and ONE price only for the timeshare. No negotiations. 

You Won’t Believe This Language

I recently found some rather interesting language buried within the mounds of paperwork that consumers are forced to sign on the spot without having the chance to fully read and/or comprehend what the heck they’re signing when purchasing a timeshare. 

I’m reprinting it both for your review and as a caution. 

The purchaser promises to neither slander nor cause harm to the reputation of the seller by any means naming in an enunciation manner, but not limiting to pamphlets, magazines, newspapers, Internet websites, blogs, television or radio. In virtue of the above, the purchaser will not issue degrading statements in respect to the services provided or not provided by the seller nor will he use pejorative adjectives when he publically expresses any opinion, oral or written, related to his experience while practicing or not practicing the membership issued by the club. 

The parts agree that in case the purchaser does not fulfill his obligations established in this numeral, damages will be caused to the seller who will have the power to appear before the competent authorities to practice the corresponding actions with the purpose of being compensated for the damage caused. 

You read that correctly. Even if the developer does not hold up their end of the deal, I.e. ‘services provided or not provided’, the purchaser can’t talk about it or face monetary and assuming criminal charges!!!

What exactly are these guys trying to hide?

Warning! Don’t Sign Anything

Yet another sad, disgraceful example of horrible tactics used by this timeshare developer. Thankfully, these people realized they were being hustled. 

How many don’t?

We went to an owners update in Williamsburg. When it started we were told that NAME REDACTED could now consolidate the 2 loans that we have with them into one and at the same time lower our interest rate. He said several times that no purchase was necessary, only that it was a win-win situation for us!  

Obviously we had to sign paperwork for them to run our credit.  When the salesman came back into the room, he said it looked like we would save $200/month but they were waiting on the paperwork to print.  He went back out and came back with the finalized paperwork.  

When we were presented the paperwork,  they had us rolling our maintenance fees in for the next 10 years into the loan!  I THINK THEY BELIEVE WE WERE BORN YESTERDAY!  I asked the salesman where our straight refinancing and consolidation paperwork was.  He said this WAS the proposal!  

I told him it was garbage and we were lied to in order to get us to sign for the credit check!  I asked for a supervisor and instead got the manager of hospitality.   I asked for his name and the name of the salesman.  I want to make a complaint as this put a hard inquiry on my credit! This is a horrible sales tactic and they should not be able to get away with it.  Yes, I turned into a witch there with a capital B!

The moral of this story is don’t sign anything, don’t provide your Social Security Number, don’t provide credit card information to anyone. 

I’m Fed Up With The Excuses!

I think it’s high time that the so-called ‘license to lie’ clause be taken out of contracts. Consumers aren’t given a chance to do any research during a sales pitch, so they must rely on what the salesperson says. 

I’ve redacted the name of the resort. Clever readers will no doubt know who is behind this horrendous story. 

We were defrauded by NAME OF DEVELOPER for $15,500 on 11/18/2016 in NAME OF CITY, Virginia. What happened is that their salesperson made representations to us which were not in the written contract we signed. We found out later that virtually nothing he represented to us at the sales presentation in order to induce us to buy was true. Details follow.

We only went to the presentation to receive the 'attendance reward'. After a few hours of listening to the usual hard sell spiel trying to get us to buy more anyway even though it made no sense for us because we wanted to "sell" what we already owned (for zero, which I have always known as the industry standard practice) , we made our position clear and started to leave.  

At this point our salesman offered us this "great new deal" NAME OF DEVELOPER could offer members who bought more points to become 'silver' members. The deal was that if we became silver members, after three years we would have the option to sell all our points back to NAME OF DEVELOPER for $108,000. He also put this phoney deal in writing (which I have). I was extremely skeptical because I had never heard of a timeshare buying back points. However, after he repeated this 'new deal' for about 5 times we finally decided that he couldn't possibly be flat out lying to our face,  (or if he worked for a reputable company they would rescind the contract), so we signed.  

When we later (6 months) found out that the deal he had offered us was totally fraudulent, we asked NAME OF DEVELOPER (repeatedly, orally and in writing) to rescind the contract because we had been defrauded. 

Their response...."it doesn't matter" what the salesman told us or even wrote down. The only thing they care about is that we signed their written contract. So they don't stand behind whatever the salespeople are claiming. Basiclally, we were told over and over again that "well, you signed the contract", even though the only reason we signed was because of what their salesperson told us which turned out to be a fairy tale. We are talking about major phoney representations, not minor. 

Obviously when salespeople know that when their company doesn't care if they make up a pack of lies to elicit a sale, if they are unethical they will say anything to get a commission. These people are totally unethical if not criminal. We want our contract rescinded and our money back! 

THE KEY HERE WAS THAT THE OWNER NOT ONLY THOUGHT THE SALESPERSON WAS TELLING THE TRUTH, BUT THAT HE WAS WORKING FOR A REPUTABLE COMPANY. TURNS OUT BOTH WERE FALSE.