Irene Parker, MBA
Quote from an ARDA lobbyist, the American Resort Development Association
ARDA responds that it’s untrue that timeshare loans come with high interest.
"There's nothing special about our loans. They are traditional loans. They are not subprime. They go to highly credit-worthy people,” Nusbaum responds.
Still, he also admits that consumers' timeshare points have no resale value. He says that people don’t mind that they can’t resell their ponts when they are done. “Their value comes from using it,” the timeshare industry’s top lobbyist told ConsumerAffairs in January, admitting that points have no resale value, while claiming that consumers don’t mind this because the value comes from the experience.
Our September 23rd, Episode 31 of Timeshare Solution or Surrender features Kelly Johnson with Motivation Mortgage, serving borrowers in North Carolina, South Carolina, Georgia and Florida. Kelly works in lending and is a credit repair expert. Four younger timeshare buyers we talked with on Episode 31 share how they were left with no choice but to default after buying a timeshare they say was based on false promises.
All Timeshare Solution or Surrender Episodes can be accessed from the menu by date:
https//podtv.tv/timeshare-showcase
Timeshares are financed at 12% to 19.99%, but 12% to 13% is rare. A timeshare with a loan, unlike a car or personal residence, is impossible to sell. Even without a loan, Developers like Vacation Village, Great Eastern, Soleil Managment and Club Exploria have little to no responsible exit.
In another remarkable display of inaccurate reporting, Alicia Richards, a paid content writer, in her article Millennial Timeshare Boom, Timeshares are Back, but Better, made the following bizarre comment:
Quite simply, a timeshare has and holds financial value, while a hotel or Airbnb does not. The only way to gain is to be a property owner. Do you want to invest in a piece of your vacation, or pay higher and higher hotel and bed prices while you wish you had a timeshare?
https://www.myjournalcourier.com/news/article/timeshares-back-better-19767193.php
Diamond Resorts/Hilton Grand Vacations/Bluegreen, combined, is now one of the largest timeshare companies. They sell non-deeded, right-to-use US Collection points that have no resale value. The fee to deed back points or weeks, if Transitions is not “paused” is $1,000 per contract.
Alicia Richards
Resale prices for Hilton’s Elara timeshare posted on RedWeek
https://www.redweek.com/resort/P5724-elara-by-hilton-grand-vacations/timeshare-resales
We include below, two timeshare owners who submitted letters to the editor of MyCourierJournal after reading Ms. Richards’ comments. Her email is accessible only to Muck Rack subscribers. We also include Andrew's report. Andrew was active duty Air Force National Guard when he purchased a Westgate 4 BR week, convinced it was a rental investment. Andrew was one of our Episode 31 guests. He involuntarily separated from service because of the loan default.
Credit Repair
Beware of credit repair agencies asking for money upfront. According to the Federal Trade Commission, it is against the law for a credit repair service to charge until after services are delivered.
The process to repair credit is a marathon, not a sprint. We have scheduled our four guests from Episode 31 to come back in January of 2025 to check on their progress. According to Kelly, the first step is to have the timeshare loan changed from a mortgage to an installment loan. Borrowers should begin by telling the credit reporting company, in writing, what information you think is inaccurate.
According to the Federal Trade Commission, “Credit reporting companies must investigate the items you question within 30 days.” Unfortunately, like other consumer protection lending laws, timeshares are exempt. CRAs do not have to investigate timeshare complaints. In 2024, the Eleventh Circuit Court of Appeals ruled in favor of Holiday Inn Club Vacation, that timeshare complaints do not need to be investigated because they are a matter of law, not fact. Consumers appreciate the effort of the Consumer Financial Protection Bureau, as they sent an attorney to argue on behalf of the consumer.
https://tarda.org/blog/44-lawsuits/215-timeshare-credit-repair-holden-vs-holiday-inn-club-vacation
In another recent ruling, the Eleventh Circuit Court of Appeals in Atlanta, agreed in Steines v Westgate, case # 8:22-cv-00283-CEH-JSS, that a timeshare loan is not the same as a home loan. Home loans are exempt from the Military Lending Act. Taya Fissix, active duty Army and a Wyndham buyer, Carl, a former Westgate owner, and I attended oral arguments.
Where are the lawmakers?
ARDA raises $5 million a year by billing maintenance invoices in mostly opt-out, involuntary donations. ARDA lobbyist Don Isaacson, at a Senate hearing in Arizona, in 2019, argued against allowing timeshare buyers 24 hours to consider their decision to purchase.
But the bottom line, said Isaacson, is that the state should not step in to protect people who didn’t bother to understand the nature of the deal. “You read the documents,” said Isaacson. “And unless there is fraud, you are bound to that particular purchase.”
Anyway, Isaacson argued that too much is being made of the issue. He said the 250 complaints a year to the Attorney General’s Office pale in comparison to the 600,000 timeshare units owned in Arizona.
In 2016 and 2017, the Arizona Attorney General’s office received over 1,000 complaints just about Diamond Resorts. Diamond was fined $800,000 and was issued an Assurance of Discontinuance:
https://www.azag.gov/press-release/attorney-general-brnovich-announces-800000-settlement-diamond-resorts
A few years I had difficulty having the $7 removed from my Diamond Resorts invoice. One year I was told it was a delinquency. Another asked I asked for it not to be charged to my credit card. It was charged anyway. When I called, they said they had to filI out a form to remove it. In 2010, the Federal Election Commission fined ARDA for not calling “donations” voluntary.
Tom, a Florida resident, reached out to Florida State Representative Tom Leek about Wyndham agents who encouraged him to buy additional points to rent, only to be accused of commercial activity. Mr. Leek’s office responded that the problem has been solved because the state amended the timeshare law to add that sales agents will not misrepresent the product. Their office is obviously not aware of the oral representation, or non-reliance clause, buried in electronic fine print. That disclosure, in which timeshare buyers unwittingly acknowledge they did not rely on oral representations, should be made at, or prior to a presentation. This would save a lot of heartache and frustration.
Why Timeshares pose more risks for younger buyers
We talk a lot about seniors targeted, but seniors are often not as concerned about a credit score drop, although a default can still be terrifying. Younger timeshare buyers, like those on Episode 31, have been severely impacted by a 100 to 200 point credit score drop, unable to buy or refinance a home, and may have employment prospects curtailed, as is the case of one of our guests who works for a title company.
Comments sent to MyCourierJournal from an admin of a Hilton Grand Vacations Facebook group consisting of 14,000 members, also a moderator of an HGVC owners group of 30,000 members
I have been an owner since 1997. I have never read a more misleading article on timeshare as the one written by Alicia Richards. It is poorly researched.
Let me explain. She states: “In comparison, a timeshare is an investment, unlike Airbnb and hotels and holds its value.” I enclose the dollar deals currently available in the resale market from an HGVC approved reseller.
Very few maintenance fees are $1,000. For example, you can see in the example below a week in Miami is almost double that. On top of that, Alicia failed to mention of course, taxes, club fees, currently HGVC charges $299 per year. Booking fee,cancellation charges, charges to save unused points from one year to another. The loss of unused points, interest rates of 12 to 19.99% on loans or higher if financed with credit cards, the almost $1 billion in bad debt HGVC has on default of these loans. She fails to mention the pressure on Florida timeshare resorts to fully fund their reserves, and if passed, a 30% increase in maintenance fees.
Letter to the editor, MyCourierJournal from Tom in Florida:
Mr. Bauer,
I am writing in reference to the article written by Alicia Richards on the Millenials Timeshare Boom, published September 22, 2024. I will start on a positive note. Wyndham resorts I have stayed in have been exceptional. The hospitality people are second to none. That being said, it is a long standing joke amongst owners that if we never had to see the sales offices again, it would be too soon.
There is a dark side to the industry. The article speaks to the industry transforming itself. The one thing that has been transformed is the legal manipulation that goes on to the detriment of buyers, young or old. We are subjected to endless updates. The message is always“your account is not set up to best get full use of your points." The reality is, each time they do an upgrade, they rearrange your account under the disguise of using your “equity” to offset the down payments. Later, the purchaser learns that there is no equity.
In 2020, Wyndham did this "for" me. I ended up with two maxed out credit cards that they opened to the tune of about $40,000. From a usage and experience standpoint, I was better off when I had just enough points to get in the door. After two more credit cards maxed out, along with a $54,000 loan through Wyndham, we are about $100,000 in debt, plus pay more than $1,000 a month in maintenance fees. It has reached a point that we cannot afford to use the 1.4 million points we "own" but not really. We don’t own the resorts’ brick and mortar.
My wife and I have recently discussed default due to the last upgrade in which we were told to buy additional points to rent to cover a good portion of our costs. In 2021, the sales manager at Wyndham OceanWalk even recommended a person that would help us rent. This worked, but Wyndham issued us a cease and desist letter, accusing us of commercial activity. The sales people told us "We all do it, that's how we afford to keep as many points as we have." As members for decades, we can't believe that we are forced to default in what some describe as an inventory grab. We were told that the high interest credit cards could be refinanced to lower the interest rates as timeshare is considered property. Banks told us that timeshare is not property.
I worked 23 years in law enforcement. Buried deep in the fine print of the extensive contract, is a clause that says that the company is not responsible for anything that the sales people say. It’s the perfect entrapment.
This writing only scratches the surface. I had to laugh when I read ARDA's statement that 71% of current timeshare owners plan to upgrade within the next two years. They will have little choice as my experience has shown. My experience is not unique. There are thousands of complaints. The tourist industry brings in about 90 billion dollars a year in Florida alone. I don't think I need to go further as to why so little is done to protect the timeshare buyer.
Ms. Richards’ article was a nice advertisement for the industry, but the truth should prevail - timeshare has cost many elderly people their retirements, armed services members their security clearances, young people their credit ratings, and like me, our ability to use what we paid for and still pay for living expenses. If your publication is no more than paid content, it should be disclosed as such. If it is meant as actual journalism, the other side should be exposed. There are people that have had experiences worse than ours. If you are interested in the truth, I can put you in contact with some of them.
Thank you for listening, I look forward to hearing your response.
Tom, Ormond Beach, Florida
Andrew and Brooke, Utah, Air Force National Guard veteran, ten years served with the Air Force National Guard, intending to retire in 20.
According to Andrew, who was active duty when he purchased:
We bought a 4 BR 4 bath unit for $50,954 on September 14, 2021 at Westgate Lakes in Orlando. We financed $44,711. There are three of us. We didn’t need a 4 BR unit. While waiting for the closing, our sales agent, Harry, said we should not mention anything we discussed about renting when signing documents.
Harry said someone was giving up a week that had an original price of $75,000. Agents said that if we wanted to sell we could. Harry said one owner rents her unit online on AirBnb and Westgate doesn’t touch the income. They explained how we could buy “Getaway” weeks and sell them. He said that Westgate has a policy prohibiting renting, but there was a loophole. The variable rental rate mentioned was from $49 to $399, but they said we could turn around and rent it out for $1,000 or whatever the market would bear.
We booked a week in 2022 planning to rent to pay maintenance fees. We contacted Westgate when we saw that we could not come out ahead because of too many extra fees and prohibitions. Westgate representatives provided different answers when we asked for help.
We filed a complaint with the Federal Trade Commission and the Florida Attorney General. I also sent our complaint to: ARDA ROC. We plan to enlist the support of the following, not only for us, but for all the military buyers in harm’s way:
Veterans and Military Affairs Commission 2024
https://le.utah.gov/committee/committee.jsp?year=2024&com=SPEVMA
Todd D Weiler https://senate.utah.gov/sen/WEILET/
Vietnam Veterans of America
https://vva.org/who-we-are/organization/board-members/dennis-howland/
Related Topics
Westgate Timeshare Hostages Facebook Group:
https://www.facebook.com/groups/westgatehostages
Members of the Facebook Group above raised funds to file a Florida Westgate Resorts public records request. The Attorney General produced 585 complaints reporting $4,162,062 in losses. Many left the amount lost blank.
251 mention “rent”
88 mention “profit”
111 mention “investment”
The Better Business Bureau lists 600 Westgate complaints over three years:
In 2020, Timeshare Sales were #9 on the FTC’s Top Ten Scam list and Timeshare Resale scams were up 3% at $13 million.
https://www.aarp.org/money/scams-fraud/info-2020/ftc-top-scams.html