Woody’s Weekend VPG: Feb. 13, 2009
Feb. 13, 2010: COPS & ROBBERS: Are some of the biggest fraudsters in the UK and Europe finally feeling the heat? WEEKS OWNERS vs. RCI: Wherein RCI denied doing anything wrong and promised not to do it again– at least, not for a while. VILLA GROUP: Do they know where their resorts are?
Welcome to this weekend’s rundown of stories that didn’t make the front page!
COPS & ROBBERS: It’s no secret that a lot of dodgy characters have been duping unwary Brits and Europeans out of millions of pounds and euros for many years, promising to sell their timeshares for them and/or slamming them into holiday clubs that are total frauds. RDO (formerly OTE) and Britain’s Office of Fair Trading finally got serious about it about three years ago, and as a result some 50+ bogus companies have been closed down since 2008. Most of the activity has centered around Spain’s Costa del Sol and the Canary Islands, and it’s been extremely lucrative for the fraudsters.
Chief among the perpetrators are two Brits: Gary Leigh and Peter Utal, both of whom still insist they are perfectly legit. Leigh, who lives in Malaga, Spain, is in charge of the infamous Incentive Leisure Group, Timelinx and Designer Way Vacation Club, among others, and to hear him talk about his empire on his website (which is as slick as his shaved, well-oiled head), his schemes are next to having been personally blessed by God himself. I’d like to give a rundown on the REAL Gary Leigh, but there’s not room in this column for all of it and anyway it’s well covered here and here (the redoubtable Penman & Sommerlad have more about him, too, so don’t stop at the latter article).
Well, Leigh is finally seeing some cracks in his empire. In 2005 an investigation by the OFT found Designer Way’s contracts to be unfair and unclear, and the company promised to give new members a cooling-off period. Want to make a wager on whether that ever happened?
In June 2009 Incentive Leisure Group UK was charged with 36 counts of fraud; they pleaded guilty to the 11 most serious charges in return for having the other 25 dropped. The Group ended up paying around £55,000 in fees and fines, a pittance, really, and of Leigh blamed it on his sales people because, of course, he is shiny clean.
Recently police and trading standards officers raided four of Incentive Leisure’s UK offices. The OFT says the firm is being investigated for “suspected breaches of consumer law”. They also said the investigation is at an “early stage” and there was “no assumption” offences have been committed. The investigation is still ongoing.
Peter Utal is in command of the notorious European Timeshare Owners Organisation (ETOO) and Club Class Concierge. ETOO is well known for convincing customers to cough up around £850 to sell their weeks, then talking them into spending even more to join his holiday club, Club Class Concierge. ETOO banked up to £17.5million in fees in the process. How many weeks/points did ETOO actually sell for its victims? Take a guess. And how well has the holiday club worked out for most of them? Guess again.
Taking advantage of the current financial climate, the fox has now decided to guard the henhouse. Having admitted via ETOO spokesman Peter Baker that “the majority of timeshares in this economic environment are worthless”, Utal has come up with a NEW scheme, breathtaking in its brazeness: a class action lawsuit against timeshare fraudsters! Owners are invited by the innocently named National Timeshare Helpline (owned by Utal of course) to discuss a “proposed compensation claim that will give you greater financial yield than any other offer in the marketplace”. PLUS “an opportunity to dispose of your ongoing maintenance and exchange fee liabilities”. By buying a membership in Club Class Concierge, perhaps?
For having brass balls the size of Ireland, Leigh and Utal get a solid VPG on the Value Per Gossip meter.
WEEKS OWNERS vs. RCI:
In May of 2006 a class action lawsuit was filed against RCI, essentially claiming that RCI was raiding prime weeks from the Spacebank without replenishing them with comparable inventory. Specifically: “The lawsuit is related to an alleged practice through which RCI takes out a lot of the gold crown, and highly sought after properties to rent out to the general public for profit, or for use as a fringe benefit for RCI employees and special guests. This skimming of available weeks makes it difficult for RCI timeshare resort weeks members to bank weeks for exchange at other resorts, since the availability pool is severely limited by this activity.” (http://rcivip.com/2008/rci-class-action-lawsuit-murillo-vs-rci/)
Making a very long story quite short, as the lawsuit progressed RCI did not contest having rented out members’ weeks. They in fact confirmed that they did indeed do so, and that they had every right to do it. So the lawsuit became a battle to determine whether they did, in fact, have the right to do so. Got that?
In the course of the lawsuit the plaintiffs’ attorneys “sought to ensure that RCI’s activities in the exchange system relative to its rental program are fair, and that the fundamental purposes of the Weeks Program as RCI advertised it —exclusive access to Weeks Member deposits and the opportunity for a properly submitted exchange request to obtain a comparable exchange —were met.”
A proposed settlement was presented to the Court in June, 2009 and a modified agreement– supposed to have achieved the relief sought through several fundamental changes to RCI’s business practices– was presented in August, 2009. However, the judge was not quite happy with it and hundreds of Weeks owners (the “Class”) were not happy, either. The Court offered the “Class” an opportunity to present their points of view, and they did exactly that.
Some of the objectors met with RCI Executives and other principals in September 2009 to discuss changes and in the end, a Final Order and Judgment was signed by the judge on December 4th. You can read the Final Order here: http://www.njlawyer.com/rci/settlementagreement.pdf
Here’s my favorite part of the settlement. Read it carefully, and note the part that I put in bold font:
Pursuant to Section II.C: Priority For Weeks Program Exchange Fulfillment.
Commencing no later than one year after the Effective Date and continuing for a period of three years from the date on which the benefit provided in this Section II.C is first made available by RCI or August 31, 2012, whichever is earlier, each Deposit of Vacation Time for the purpose of an Exchange right, made more than ten (10) months in advance of the starting date of such Vacation Time, shall be available exclusively for Exchange by Members and eligible members of the RCI Points exchange program (subject to balancing as required by Section II.A(2) above) for a period of thirty-one (31) days from the date of Deposit, including the initial Deposit day, and shall not be available for any other purpose, including, without limitation, Rental.
Did you get that? The Three (3) Years part?
I didn’t notice anything specific within the settlement agreement actually preventing RCI from retaining and / or renting out to the general public the very best deposits. Did you?
Well, anyway the Final Order isn’t quite final yet after all, because someone has appealed the decision. Until that is taken care of, the whole thing is still in limbo. AND there are apparently some unhappy Weeks owners who are trying to get States’ Attorneys General to look into investigating/prosecuting possible fraudulent behavior by RCI within those states. Just when you thought it was safe to come out of the water…
You can get more details on this whole thing than you ever knew you wanted by following a long thread on TUG, and/or read the Final Order at http://www.weeksprogramsettlement.com or http://rciclassactionlawsuit.com/
RCI’s VPG-ometer? They’re probably laughing all the way to the bank, so I’d have to give them a pretty high average.
And finally, to finish off this long report on a lighter note: VILLA GROUP: Do they know where their resorts are?
Ending on a lighter note, this update on the Villa del Palmar at Ensenada Blanca (the Villa Group’s new Loreto, Baja) resort just tickled my funny bone.
Loreto Construction Update – Currently, construction is focusing on the walls of the Lobby and the Restaurant. Over the next few days work will begin on the access road. Further, much of the installation of the steel, wood forms for slab and pouring of concrete will take place over the next several weeks. Once opened late 2010, members will bask in Loreto’s tranquil village setting, friendly people and scenic beauty. The Sierra la Giganta mountain range overlooks the town and creates breath taking panoramic vistas. Or, take a short walk to downtown Loreto and enjoy a multitude of local restaurants and shops. (bold provided by me)
A short walk to downtown Loreto? Wanna try about 30 miles?
And that’s it for this weekend. See ya next weekend, and watch that VPG… Oh, and if you enjoyed this, tell a friend!
Published every Saturday, or whenever there’s something that hits Woody’s VPG-ometer.
Got any hot stuff you’d like to see exposed here? Your confidentiality is guaranteed; just make sure it’s a real deal and verifiable… Email: woodysvpg@gmail.com
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There actually is a Villa Group property (hotel) in Loreto proper. That is actually what the article is referring to. I’ve been told that the Loreto hotel will be where prospects stay to tour the resort property 30 miles south while waiting on any facilities at the resort site ie:Ensanada Blanca
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True, they do have a hotel there and that probably IS what they were referring to– but that isn’t what they said or what the blurb implied…
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