Timeshare is an international business, in this news section CLA International will publish articles from various sources, giving you an insight into timeshare around the world.
In our first article we start with one from the USA, this was written by Irene Parker and first published on Inside Timeshare back in February 2017. Irene visited CLA Spain in September 2016, where she met with the Spanish lawyers and staff, she was impressed with their work and achievements and has kept contact with them.
So it is with pleasure we publish this her first article in collaboration with CLA International.
Billion Dollar Lawsuit Filed against Diamond Resorts International
Law Firm: Albright Stoddard Warnick & Albright
Case No. 2:17-CV-00248
Filed in Las Vegas Federal District Court
By Irene Parker: February 1, 2017
The law firm of Stoddard Warnick & Albright filed a billion dollar lawsuit against Diamond Resorts International January 29, 2017. The lawsuit alleges Diamond Resorts (DRI) ensnared thousands of elderly consumers in its deceptive and fraudulent scheme to sell points-based timeshare memberships.
According to the complaint, which was filed on behalf of lead plaintiffs Ilona and Lester Harding, along with thousands of other elderly consumers, buyers typically spent tens of thousands of dollars or more for upfront Membership fees and upsold Membership levels. Memberships were accompanied by hefty annual assessments that continue in perpetuity.
Several plaintiffs were named in the lawsuit. Among those named:
- Diamond Resorts Holding, LLC a Nevada LLC
- Diamond Resorts International, Inc., a Delaware corporation
- Diamond Resorts International Marketing, Inc., a California corporation
- Diamond Resorts International Club, Inc., a Florida corporation
- Diamond Resorts Management, Inc., an Arizona corporation
- Diamond Resorts U.S. Collection Members Association, a Delaware corporation
- Diamond Resorts Financial Services, Inc., a California corporation
Of particular note to Diamond Resorts Owners is the absence of any “collection” except the US collection. Other Diamond Resort collections not named in the lawsuit include Hawaii, Premier Vacation Club, California and Monarch Grand Vacations Collections.
Former CEO David Palmer served as President and/or Director (and sometimes as both) for at least six of the Defendant entities; Jared Finkelstein serves as Secretary and/or Director (and often both) for at least six of the Defendant entities; and Lilian Luu serves as Treasurer and/or Director (and sometimes both) for at least six of the Defendant entities.
The law firm Albright Stoddard Warnick & Albright is one of the oldest law firms in Nevada, in existence for 40 years. According to the firm’s website, they have represented clients in many high profile and complex bench and jury trials in Southern Nevada, in both state and federal court, representing contractors, lenders, and owners on large commercial projects. The firm successfully defended a general contractor in a bench trial, which lasted intermittently for well over a year, arising out of the construction of a major Strip hotel. At the time, it was the longest bench trial in Clark County history. Included among the firm’s numerous institutional clients are American Express, Wells Fargo and Hard Rock Café International.
According to the complaint, the lawsuit alleges the elderly were targeted because of their vulnerability and time available to travel. Elderly is defined as anyone 60 years or older at the time of purchase. The elderly were induced to purchase vacation memberships in a same day sale without being advised as to the lack of a secondary market by intentional design. Memberships were accompanied by, at times, dramatically escalating maintenance fees.
Inside Timeshare has written numerous articles supporting such claims.
Mr. Ralph Marbles, an elderly buyer diagnosed with a medical condition shortly after purchase, but denied a surrender until the television reporter contacted the company. Mr. Marbles’ maintenance fees increased from $200 a year to $684.
While Diamond Resorts boasts that 70% of sales come from existing owners, there are thousands of complaints filed by existing owners, as detailed in previous Inside Timeshare articles. In addition, existing owners are often encouraged to purchase additional points as a way to reduce maintenance fees through a non-existent buy-back program and are not told points are worth only pennies on the dollar when used to pay maintenance fees. The Saldana and Olds families are cases in point.
I have intervened on behalf of several families whose financial lives and retirement savings were decimated by their Diamond Resorts vacation plan. The Hurleys are a retired Canadian army family currently working with Diamond Resorts Consumer Advocacy in the hope of saving 40 years of retirement savings representing their entire life savings.
As a result of the Arizona Attorney General’s $800000 settlement and “Assurance of Discontinuance”, Diamond is rolling out a new Clarity (™) program that seeks to address deceptive and fraudulent business practices that the Arizona Attorney General alleges violated the Arizona Consumer Fraud Act.
It’s not all doom and gloom though!
I have recruited, well drafted, several of those I have helped to pay it forward by becoming Appointed Special Timeshare Advocates (™) as a bridge between their vacation nightmare and resolution. We are working with the newly formed Diamond employed Consumer Advocates. Already, we have achieved positive outcomes, or at least provided straight answers, for what an owner can and cannot expect.
Not resolved are the plight of high volume owners whose accounts have been suspended or issued a “cease and desist”. For years these owners were encouraged to buy upwards of 100000 to 200000 vacation points in order to be able to rent out enough points to cover maintenance fees. In recent years points have sold from $2 to $4 per point. Changing rules and regulations and acknowledgement forms signed in an upsell have eliminated rights contained in their original contracts. Irina tells of her vacation nightmare:
That about covers the first 20 pages of the 55 page complaint. There’s only so much vacation burden a writer and reader can handle at once.
“Diamond Resorts is still looking into the facts surrounding the lawsuit; therefore, it has no comment at this time,” according to DRI Public Relations spokesperson Maya Pogoda.
CLA International thanks Inside Timeshare and Irene Parker for the use of this article.