NEW YORK (October 16, 2014) — Attorney General Eric T. Schneiderman has announced that he has reached a pair of agreements with two leading hospitality companies – Hilton Resorts Corporation and Wyndham Vacation Resorts, Inc. – that will help protect purchasers of timeshares from potential deception and confusion.
“The purchase of an interest in a timeshare can be a confusing and expensive proposition,” Attorney General Schneiderman said. “I am pleased to announce that these two industry leaders have agreed to make policy changes that will benefit and protect consumers. With their cooperation, we are making the timeshare industry safer, more transparent, and more accessible to investors.”
In the first agreement, Hilton agreed to stop using a clause in its timeshare purchase agreement that disclaimed responsibility for specific representations made by salespeople, particularly regarding the availability of reservations, hotel use rights, and the rental, resale, and buybacks of timeshare interests.
In the second agreement, Wyndham agreed to stop offering reservation certificates, which allow members of its internal timeshare exchange program to make advance reservations at a timeshare hotel known as Midtown 45, prior to the acceptance for filing of the Midtown 45 offering plan. These certificates were given to purchasers of timeshares in other Wyndham properties, and they led some of those consumers to believe they were purchasing an interest in the Midtown 45 timeshare.
Sellers of timeshares are subject to New York’s Martin Act, which makes it unlawful to offer and sell timeshare interests in or from New York State without first having an offering plan or prospectus accepted for filing by the Attorney General’s Real Estate Finance Bureau. The law also makes it illegal to make representations in the sales process that are contradictory to the disclosures contained in the offering plan or prospectus.
The agreements come as the Attorney General’s Office continues to investigate sales and marketing practices of another timeshare company, known as the Manhattan Club. In July, the Attorney General obtained a court order preliminarily barring sales at the Manhattan Club pending an investigation into that company. More information about the investigation is available here.
The negotiations with Hilton and Wyndham were conducted by Assistant Attorney General Serwat Farooq, Deputy Chief Andrew H. Meier, and Bureau Chief Erica F. Buckley, all of the Real Estate Finance Bureau, as well as Executive Deputy Attorney General for Economic Justice Karla G. Sanchez.
PRESS RELEASE SOURCE: New York Attorney General’s Office