June 19, 2010: WHAT’S ON THE MENU THIS WEEK? (Comments are now open for Woody’s, if you want to leave one at the bottom of the page…)
HE SAID SHE SAID: Is the timeshare industry in Spain REALLY set to collapse? Well, it depends on who you talk to.
A UK company called Claims Directive, which claims to work on behalf of timeshare owners and is affiliated with a company called Reclaimgc, recently engaged in a brief skirmish of press releases about the subject with RDO (Resort Development Organisation— formerly the OTE, or Organisation for Timeshare in Europe). The subject? Whether or not timeshare companies in Spain and its territories violated the law by collecting deposits from new purchasers within the 10-day cooling off period mandated by the European Timeshare Directive of 1994. Spain adopted the directive in 1996.
Claims Directive says Anfi did break the law, and lawsuits were filed against Anfi Sales SL and Anfi Resorts SL, part of the Anfi Del Mar Group in Gran Canaria, for doing just that. A Spanish magistrate ruled against Anfi last month, commenting that “The case of paying an advance instalment is in opposition to what is dictated in the law 42/1998, article 11, the second section of this mentioned rule permits the acquirer ‘at any time’ to get back double the stated amount.” Claims Directive appears to have taken that to mean that Anfi must pay double, but RDO disagrees.
Claims Directive says further that “At present there are over 200 live claims for timeshare miss-selling against Anfi Del Mar in the Spanish court system and with fresh claims coming in at a rate of 10 a week before this ruling, it is not known what affect this will have on the stability of Anfi Del Mar.”
It is their contention that should the rulings on these cases be upheld on appeal, it will open the door to thousands of similar cases being filed against many European timeshare companies, with potentially dire consequences for the industry as a whole. You can read all the details here.
In RDO’s response (which you can read here), the Organisation rejected the notion that Spain’s timeshare industry is in any trouble as a result of those two lawsuits, pointing out that “the timeshare industry both in Spain, the rest of Europe and USA as well as other international territories is extremely robust.”
RDO maintains that “There are categorically not ‘200 live claims for timeshare miss-selling against Anfi Del Mar’. In fact, only 3 court rulings have been made, one of which was in favour of ANFI Group and in the other 2 cases, it has not been proved that Anfi took deposits directly in connection to the timeshare sales. The company is required to return a small amount as the documentation presented by Anfi was considered not enough in court due to formal interpretations. In this way, both rulings are being appealed by Anfi at the moment. Claims Directive does not clarify that Spanish law only prohibits taking of deposits for timeshare sales when deposits are received between the purchaser and the seller.”
The crux of the matter seems to be one of interpretation. Can the timeshare companies collect deposits up front as long as the transaction is made with a third party, kind of an “escrow account” type thing, as opposed to the deposit being taken directly by the companies/sellers themselves?
Again, Claims Directive says the law clearly says “NO”, and RDO disagrees.
Since the two cases are currently on appeal, we may not know the answer for a while. Stay tuned…
DIAMOND RESORTS & ILX SET TO WED: The Diamond Resorts deal to buy the assets of bankrupt ILX Resorts is still a go, with a hearing scheduled for July 23 to set a date for the purchase. Diamond is the stalking horse bidder, and of course someone else could show up at the last minute to outbid them, but that seems unlikely at this point. You can read all about it here: Diamond Resorts Set As Stalking Horse Bidder For ILX Resorts
Assuming all goes well, I wonder how the purchase will affect sales and marketing and ILX owners/members?
CASE IS ON THE CASE: It’s those danged holiday/vacation clubs in the news again, this time in Singapore, and the Consumers Association of Singapore (CASE) has been hard at work to rein them in. On May 24, 2010 CASE obtained a court injunction against Garraway Enterprises (incorporated in the Virgin Islands) for unfair trading practices. (They call Garraway a timeshare firm, but I take exception to that; it’s a holiday/vacation club, not timeshare.)
Since 2007, 75 people have filed complaints against the firm for high pressure sales tactics and false and misleading claims. The total contract value of these cases amounted to S$887,000 ($639,136USD).
People complained about being approached on the streets with winning scratch cards and were asked to collect their prizes at the firm’s Ngee Ann City office. Others were invited via phone calls.
There, they were pressured into signing up for membership in Concepts Vacation Club – ranging from S$3,650 to as much as S$30,000 – which promised them perks such as an easy access booking system for vacations and discounted flight and hotel fares. All pretty much bogus, as I’m sure you’ve already guessed.
The court’s ruling means Garraway can no longer sell vacation packages to customers by claiming that they would get better deals. Is that a comprehensive remedy against such tactics, or is it more like the old Robin Williams joke where a bobby in London sees a person commit a crime, sees the criminal and says, “Stop! Or I’ll say stop again.”?
Besides their location in Singapore, Concepts Vacation Club has offices in Australia/New Zealand; Taiwan; Spain; and Iran. But I’ll be darned if I could find a single “officer’s” name anywhere. So who actually runs Garraway Enterprises/Concepts Vacation Club? Does anyone know?
TIMESHARE TRICKLES DOWN: How important is timeshare to the health of operations like theme parks? As it turns out, plenty important! A recent SEC filing from Universal Orlando pointed out that a whopping 9 percent of Universal’s ticket revenue came from timeshare companies. You know, the telemarketers and OPCs who offer free or reduced price park tickets as a
bribe lure to sit through a timeshare presentation. And that’s only one company!
NEW KID ON THE BLOCK: The LGBT community will soon be getting a new luxury resort in the South Florida city of Wilton Manor. A company called G Worldwide plans to break ground there on a 700,000 square-foot resort at an estimated cost of $80 million, with completion scheduled for 2011. The luxury resort is the first in a series of projects the company plans that will cater to the LGBT community.
The 172-unit, all-suite resort will include a timeshare component, allowing visitors to purchase units in the building. G Worldwide COO David Hozapfel says, “Timeshare brings a lot of value to the property, especially from the developer’s point of view. That component of the resort will only be about 20 percent of inventory, but will provide us with a steady stream of customers.”
G Worldwide claims to be the first-ever LGBT luxury-lifestyle resort and brand with a goal of amassing a collection of hotels, resorts, and vacation clubs specifically designed to fulfill the needs and desires of the LGBT traveler. The company also plans to bring its brand to other markets in the future, including New York, Palm Springs, Las Vegas and San Francisco. You can find out more at http://gresorts.com/
DEJA VU ALL OVER AGAIN: London solicitors Edwin Coe, who are already representing a group of claimants in legal proceedings arising from timeshare products sold by St Frances Marketing Ltd trading, has reportedly launched a claim against RCI Europe on behalf of timeshare owners who allege that RCI has denied its members the opportunity to get fair exchanges.
I don’t have any more information on the lawsuit, but doesn’t it sound a whole lot like the recently settled lawsuit in the States wherein Weeks owners complained about the same thing?
A SCARY THOUGHT: If this doesn’t make your knees week nothing will. Go to this website and just look at it. Absorb it. I think you’d better be sitting down. http://www.usdebtclock.org/
THE GRAPEVINE: Is it true that even in these turbulent times resorts across the globe are hanging on to too many reps and failing to segregate their lines? Or have they gotten as lean and mean as I’ve been hearing? Someone with the handle “DropZone” insists “resorts continue to hang onto poor performers and it drags the rest of the team down. Shouldn’t the bottom feeders have dropped off by now or been let go? But there they are! I just wonder if management understands how hanging on to those bottom feeders affects the whole line, and ultimately the resorts’ profits?”
I dunno. I would’ve thought that issue was handled long ago, just by attrition if nothing else. I mean, we know that THOUSANDS of sales/marketing reps have been laid off in the USA alone. How can there be any roadkill still on the books?
PEOPLE: There is life after timeshare and Stephen Triffit can tell you all about it. A former timeshare salesman in Tenerife, Canary Islands, Triffit made the finals in Britain’s “Stars in their Eyes” talent contest in 2001 and hasn’t looked back since. Having become one of the best Sinatra tribute acts in the business, starring as Ol’ Blue Eyes for six years in The Rat Pack Live from Las Vegas show in Britain’s West End and performing in Las Vegas and Atlantic City.
He is now staging a solo concert in which he performs songs from the Sinatra at the Sands album in its entirety, backed by a 17-piece big band. He is a happy man.
Perhaps more prosaically, Interval International has promoted Neil Kolton to director of resort sales and service for the Caribbean and Florida (excluding Orlando and the Panhandle). He oversees the company’s presence and plays a lead role in building its developer client base in these markets. Kolton also serves in the same capacity for Preferred ResidencesTM, a branded membership and exchange program for luxury fractional resorts and private residence clubs. Congrats to Mr. Kolton!
DEAD SKUNK IN THE MIDDLE OF THE ROAD AWARD: This week’s Dead Skunk Award goes to Daryl Turner of Vacation Clubs, LLC. in Egg Harbor Township, NJ. Ol’ Daryl started selling a travel club called Blue Water in February, but he neglected to file for a Mercantile License. He was cited twice before he finally applied for one, but when his company was investigated to judge his business responsibility and moral character in order to determine if a license would be granted, he and Blue Water were found to be “mired in a history of fraud, deception, and questionable business tactics.”
It seems that attorneys general in New Jersey and Pennsylvania have civil actions pending against Turner for his involvement with travel companies like Blue Water.
The license was denied, though Turner and his attorneys are working on the issues and deny any wrongdoing. In a hearing where people complained about fraud connected to Blue Water, Deputy Mayor Stanley “Jake” Glassey said even if Blue Water wasn’t being accused of fraud, the fact that Turner was operating without a mercantile license was enough to determine his character.
So Daryl Turner is stinking this week, not just because of accusations of fraud but because he was stooopid!
And that’s it for this week’s Roadkill. See ya next weekend, and keep your eyes on the road… Oh, and if you enjoyed this, tell a friend!
Published every Saturday.
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