Timeshare Fraud Results in $6.5 Million Settlement

The Attorney General of New York recently released a statement regarding the illegal practices of the owners and operators of the Manhattan Club, which includes 10 subsidiaries.  The owners of the Manhattan Club, at 200 West 56th Street, must now pay $6.5 million in restitution, maintain a lifetime bar from the timeshare industry, sell all stakes to alternate parties, and remove all associated officers and directors as members of the Board of the Timeshare Association. Provisions of the settlement dictate that the owners and operators must also admit that they repeatedly misled timeshare owners about the reservation process, and lied about the ability of sell back timeshares.  This settlement from a timeshare lawsuit is one of the largest for the Attorney General’s Real Estate Finance Bureau.

An investigation of the Manhattan Club began after the Office of the Attorney General received repeated complaints from many shareowners that were unable to make reservations at the hotel. The timeshare patrons paid tens of thousands of dollars for a “vacation ownership retreat [at a] residence-style boutique hotel for those who frequently visit New York City to enjoy Broadway theatre, fine dining, and shopping, [and] classical performances”.  Despite paying hefty sums for their timeshares, the rooms were rented to the general public rather than the timeshare owners, which was in direct violation of the timeshare contract.

However, the illegal practices began even before the purchases.  Investigators found that timeshare sales teams repeatedly deceived potential buyers regarding the reservation procedures, the capacity to sell back shares, and specifics of the offering plan.  Prospective purchasers were subject to high pressure sales tactics that even went so far as to state that their timeshare ownership was “better than money in the bank.” The sales pitch included promises of exclusivity from public use of rooms, an easy reservation process, and scarce constraints regarding reservations for owners.  All of these claims were found to be false by the Office of the Attorney General.

What the Timeshare Lawsuit Also Uncovered.

The investigation led to the discovery that the owners’ annual maintenance fees rose over 200% over the last decade, beginning at $2,000 per year for the smallest units.  Similar to many frustrated timeshare owners across the world, many owners sold their timeshares for pennies to avoid the additional yearly costs.

Fortunately, the Manhattan Supreme Court barred the Manhattan Club from withdrawing any money from bank accounts, selling more timeshare interests, and pursuing foreclosures on current members, during the investigation process.

The owners of the Manhattan Club lured thousands of timeshare buyers with false promises and shady sales tactics that violated New York law,” stated Attorney General Eric T. Schneiderman.  “While timeshares can be legitimate enterprises, scams like this one are common. To avoid becoming a victim, always be wary of high pressure tactics.” Unless you document occurrences that break the law, it’s going to be extremely difficult to progress with a timeshare lawsuit.

The Attorney General’s office does offer a brochure about how to avoid timeshare scams, however there does not seem to be any information regarding steps or processes once you have been victimized. The best thing you can do is file a complaint and wait to see if the government will investigate. But, proceeding with this process and walking away from your timeshare obligations isn’t recommended. Investigative action may take years to occur.

How to Access Information From the Timeshare Lawsuit

Regarding timeshare owners of the Manhattan Club, they were told they would be contacted by a claims adjustor at a later unknown date. Supporting evidence was crucial in their case and their patience was eventually rewarded. Not all timeshare owners are so lucky. In fact, most are unable to support their cause. While persistence may work out in your favor, it can also backfire over time. Some parties involved in the Midtown Manhattan timeshare lawsuit are still seeking restitution for the scam.

If you’re tired of dealing with incentivized “customer services” or the inability to access your timeshare, we’d be more than happy to go over your options with you. Our free consultations are meant to help you exhaust all options before attempting to get rid of your timeshare contract.  Once you’ve done everything you can to make it work, our timeshare cancellation services allow you to walk away free and clear of any obligation moving forward.

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