The Arizona Attorney General’s office and The Diamond Resorts Corporation reached an $800,000 settlement on December 23rd, 2016 regarding misleading and false sales practices during timeshare sales presentations. The timeshare legal troubles for Diamond Resorts Corporation began after the Office of the Attorney General received repeated complaints from many timeshare owners citing the significant difference between the contracts and what was communicated to them during the sales presentations. Mia Garcia, the AZAG’s spokeswoman, stated that this is the first time Diamond Resorts has been investigated for consumer fraud and that the office received more than 500 complaints before the investigation ensued. 

Diamond Resorts Consumer Fraud Settlement

The practices that were cited in the settlement included maintenance fees, resale, buyback programs, rentals, and further discounts.  The time frame for these practices was January 2011 until January 2017. Provisions of the settlement dictate that The Diamond Resorts Corporation must pay $650,000 to timeshare owners, $150,000 to the Arizona Attorney General’s Office, and offer a “Relinquishment Remedy Program, which permits qualifying consumers to return their timeshares to Diamond Resorts without any further obligation.” The Details of Diamond Resorts’ Timeshare Legal Troubles.

The Details of Diamond’s Timeshare Legal Troubles

The first deceptive practice cited was that salespersons would make false statements regarding the dollar amount that maintenance fees could or would increase yearly.  Most seasoned timeshare owners understand that maintenance fees can significantly impact the cost of timeshare ownership, often costing thousands of dollars per year.  The salespersons falsely implied that maintenance fees would either not increase, or increase at a lower percentage than the actual percentages listed on the contract..

Another deception was regarding the ability of owners to sell their timeshares to the public.  While many timeshare contracts restrict the ability to resell timeshares, the sales teams with Diamond Resorts were actively deceiving the potential purchasers stating that no such restrictions applied, even though the restrictions were included in the contract. In the long run, most timeshare owners discover that their property has zero resale value. Stating they were disappointed with this reality would be an understatement.

Salespersons also actively deceived potential owners by leading them to believe that there was a buy-back program through Diamond Resorts itself, a kind of money back guarantee, as it were. However no such program existed, leaving the consumers stuck without the ability to sell the property to the public or back to the company, all the while having to pay yearly maintenance fees.

The sales persons also would suggest that the timeshare owners rent out their timeshares in order to make a financial profit off their purchase. However it was the exact opposite in the contract, meaning that the owners could at no time rent out their timeshares to others. This is where Diamond’s timeshare legal troubles became inevitable – but it is unknown at this time what penalties or legal ramifications occurred as a result of this deception.

Diamond Resorts personnel also stated that sales teams also told potential owners that timeshare ownership gave them access to discounts for other travel needs, although no such program or discounts existed. Although prosecution tends to cease when it comes to allegations during timeshare sales presentations (because they know how to protect themselves), a number of timeshare owners were able to prove manipulative statements were made during the sale.

When something sounds too good to be true, it’s imperative that consumers act on their intuition instead of crossing their fingers. Far too many people have been taken advantage of by misleading tacts over the years. Seeing through the persuasion from the get go can save you tens of thousands of dollars.

What to do If You’ve Been Taken Advantage of.

In order to qualify for restitution or the Relinquishment Remedy Program, consumers must have purchased memberships between January 2011 and January 2017, must have been living in Arizona at the time of purchase or made the purchase itself in Arizona, and consumers must provide a detailed account of any and all deceptions that occurred during the sales presentation. Without any evidence of wrongdoing, it’ll be extremely difficult for your claim to be taken seriously.

For those of you planning on attending a timeshare sales presentation, be sure to document the claims of the resort and ask them to point out the details in the contract. If they’re unable to do so, it’s important that you walk away from the opportunity immediately. Catching them in a lie right away should tell you that ethics is being left out of the sale. Although the timeshare presentation may intrigue you, nothing is worth financial hardship or timeshare legal troubles down the road. If you decided to buy into timeshare ownership and regret your decision, we’d be more than happy to talk to you about your options. Request a free consultation or submit a qualification form below.

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