Cou­ple’s time­share ‘dream’ is costly

Hard-sell tac­tics snag re­tired mis­sion­ar­ies

USA TODAY US Edition - - MONEY - Re­bekah L. San­ders The Ari­zona Repub­lic USA TO­DAY NET­WORK

PHOENIX – Re­tired Chris­tian mis­sion­ar­ies Frank and Betty Lusk had no in­ten­tion of buy­ing an­other time­share while on a Caribbean cruise last year.

But by the time the trip was over, a charm­ing Diamond Resorts sales­man had per­suaded them to buy a $150,000 time­share with $19,000 in an­nual fees. They bor­rowed against their Phoenixare­a re­tire­ment home to pay for it, the Lusks said.

“They called it a dream hol­i­day. Ac­tu­ally, it was a night­mare,” said Frank, 89, who was a mu­sic professor. “It was the dumb­est thing we ever did.”

Desperate for a way out, they agreed to an exit com­pany’s hefty fees to try to ne­go­ti­ate an end to the con­tract.

Betty, an 88-year-old for­mer li­brar­ian, has had in­som­nia and faint­ing spells from the stress. She’s gone to the hospi­tal sev­eral times, she said.

A hard sell from Diamond Resorts

The Lusks have used time­shares for years to visit Scot­land, Florida, Alaska, Hawaii and the Caribbean and have given trips to their chil­dren. Many of the con­tracts were af­ford­able and straight­for­ward, they said.

By last year, all were paid off ex­cept one with Las Ve­gas-based Diamond Resorts worth more than $50,000, they said.

“We’ve en­joyed the time­shares,”

Betty said.

But the Lusks said Diamond Resorts lied to them in a Septem­ber 2018 sales pre­sen­ta­tion and used hard­ball tac­tics that echo pre­vi­ous complaints from con­sumers, such as not ad­e­quately ex­plain­ing all the costs of the time­share and fail­ing to honor their re­quest to can­cel the agree­ment within the le­gal time frame.

In 2017, Diamond Resorts agreed to re­form sales prac­tices, pay a large fine and can­cel dozens of con­tracts in a de­cep­tive-prac­tices case with the Ari­zona At­tor­ney Gen­eral’s Of­fice.

Diamond Resorts be­lieves in “trans­parency and ac­count­abil­ity,” spokesman Bruce Miller said in a state­ment, while de­clin­ing to com­ment on the Lusks’ case. “We strive to pro­vide ex­cel­lent cus­tomer ser­vice and a trans­par­ent sales process at all times.”

When the Lusks took the most re­cent cruise in Septem­ber, Diamond Resorts promised a spe­cial re­cep­tion on a pri­vate is­land, they said.

In­stead of a re­lax­ing din­ner, they were ush­ered into a meet­ing with a sales­man.

He told the Lusks buy­ing an­other $150,000 time­share with 10 per­cent down was “life in­sur­ance” that would

re­solve any debts they had with the re­sort when they died, a prom­ise they re­peat­edly ques­tioned, Betty said. The time­share con­tract they re­ceived is not life in­sur­ance and does not pay off debts upon death.

The sales­man showed them doc­u­ments he wouldn’t let them keep and didn’t men­tion the high main­te­nance fees that ap­peared in the fi­nal con­tract, she said.

“He re­ally talked us hard into get­ting this,” Betty said.

A change of heart

When the cruise landed on their 68th wed­ding an­niver­sary, Betty and Frank were wracked with re­gret.

They sent a cer­ti­fied let­ter to Diamond Resorts, within the le­gal win­dow to can­cel the con­tract, the Lusks said.

“We do not want to en­cum­ber our­selves with fur­ther debt at our ages,” they wrote.

The sales­man called.

“If you can be­lieve it, he talked us into it again,” Frank said. “We’re too trust­ing.”

“We’re Chris­tian peo­ple,” Betty said. “I guess we’re not as worldly wise.”

Shortly af­ter, the cou­ple wrote a se­cond let­ter de­mand­ing can­cel­la­tion. They ac­cused the com­pany of elder abuse.

“Keep­ing this con­tract would lead to our bank­ruptcy,” the Lusks wrote.

Bills kept com­ing

In De­cem­ber, Diamond Resorts con­firmed the time­share had been re­scinded.

“This let­ter is to con­firm the can­cel­la­tion of your va­ca­tion own­er­ship in­ter­est with Diamond Resorts,” the com­pany said. “We sin­cerely hope you will choose Diamond Resorts in the fu­ture to pro­vide you with price­less mem­o­ries.”

But the bills kept com­ing. On the phone, com­pany rep­re­sen­ta­tives told the Lusks the con­tract was still in place, the cou­ple said.

Desperate, the Lusks hired Time­share Exit Team, a Seat­tle-based firm that says it can help con­sumers get out of time­shares. The com­pany charged the Lusks $10,000, promising to re­fund the fee if the exit is un­suc­cess­ful. The Lusk case is on­go­ing.

Fees for a con­tract as large as theirs can top $50,000, although most cases av­er­age $5,000, Time­share Exit Team CEO Brandon Reed said. The firm has worked with more than 30,000 cus­tomers, he said.

Reed started the com­pany af­ter a di­vorce and sin­gle fa­ther­hood meant he couldn’t pay his time­share dues.

“I felt very stuck and alone,” he said. Hear­ing what Diamond Resorts did to the Lusks an­gered Reed.

“It’s a rip-off. It’s a com­plete scam,” he said.

Reed re­cently founded a group called Coali­tion to Re­form Time­share that ad­vo­cates for tighter regulation­s. His main goal is pre­vent­ing resorts from lock­ing peo­ple into life­time con­tracts.

“The time­share in­dus­try are big bul­lies,” Reed said.

Time­share com­pa­nies and con­sumer ad­vo­cates warn that some exit com­pa­nies charge ex­ces­sively high fees or are scams them­selves.

Diamond Resorts “strongly en­cour­ages our mem­bers to reach out to Diamond di­rectly should they be con­tacted by a third-party com­pany mak­ing claims to ‘trans­fer’ or ‘exit’ their time­share,” Miller said. “Diamond Resorts does not work with or af­fil­i­ate with these fraud­u­lent com­pa­nies.”

Ef­forts to pro­tect buy­ers

Sto­ries like the Lusks’ have mo­ti­vated some Ari­zona law­mak­ers, with sup­port from At­tor­ney Gen­eral Mark Brnovich, to push a bill to in­crease time­share trans­parency and al­low con­sumers more time to back out.

There is a “need for more dis­clo­sure in time­share con­tracts,” spon­sor Ari­zona state Rep. Shawna Bolick, R-Phoenix, said.

The at­tor­ney gen­eral “re­ceives sev­eral hun­dred complaints to their of­fice ev­ery sin­gle year re­gard­ing time­shares.”

House Bill 2639 passed unan­i­mously in the House but ran into op­po­si­tion in the Sen­ate.

The new ver­sion, which passed the com­mit­tee 7-0, would re­quire time­share com­pa­nies to state in clear writ­ing:

❚ An es­ti­mate of the to­tal costs in the first year.

❚ An es­ti­mate of the to­tal main­te­nance fees in the first year as well as the to­tal main­te­nance fees charged over the past three years, if avail­able.

❚ Con­sumers may face main­te­nance fees, taxes and other as­sess­ments ev­ery year.

❚ Time­shares are not in­vest­ments.

❚ Prom­ises made in the sales pre­sen­ta­tion aren’t bind­ing. Only the con­tract is.

❚ Con­sumers have 10 days to can­cel a con­tract.

❚ Con­sumers can com­plain to the Ari­zona At­tor­ney Gen­eral’s Of­fice.

“It’s im­por­tant we’re con­stantly ad­dress­ing con­sumer pro­tec­tion needs,” Sen. Tony Navar­rete, D-Phoenix, said. But “the un­der­ly­ing bill was a lit­tle too re­stric­tive for the in­dus­try.”

Time­share rep­re­sen­ta­tives had warned the orig­i­nal ver­sion of the bill could in­hibit the growth of a tourism sec­tor that pro­vides more than 4,000 jobs in Ari­zona.

The re­vised bill still would need fi­nal ap­proval of both the full Ari­zona House and Sen­ate.

The Lusks said they hope Ari­zona will do more to pro­tect peo­ple like them. They ad­vise any­one con­sid­er­ing a time­share to think twice.

“Don’t get in­volved,” Frank said. “They’ll twist your arm into buy­ing more. It’s al­ways an­other pre­sen­ta­tion.”

How to pro­tect your­self

❚ Re­al­ize that a time­share com­pany may use tough sales tac­tics with you for hours be­fore giv­ing you any free gifts.

❚ Be­fore go­ing in, if you are in Ari­zona, turn on a voice recording app on your cell­phone, like iPhone Voice Memos, and keep it in your breast pocket, purse or hand. If a sales­per­son makes a prom­ise that isn’t in the con­tract, you will have the recording as ev­i­dence. States like Ari­zona do not re­quire you to ask for per­mis­sion to record.

❚ Ask the com­pany to pro­vide a writ­ten es­ti­mate of the to­tal cost, in­clud­ing yearly main­te­nance, utilities and other fees, for five, 10, 20 and 30 years out.

❚ Make sure you know the length of the con­tract. A life­time con­tract means you can’t get rid of it un­til you die. Look in the con­tract for the right to can­cel.

TOM TIN­GLE/USA TO­DAY NET­WORK

Frank and Betty Lusk, who are in their late 80s, say they were pres­sured into buy­ing a $150,000 time­share with $19,000 yearly main­te­nance fees by Diamond Resorts.

TOM TIN­GLE/USA TO­DAY NET­WORK

The Lusks have used time­shares for years to visit Scot­land, Florida, Alaska, Hawaii and the Caribbean.

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