Last year, Midwestern vacation owners filed a class action lawsuit against the above timeshare sales organizations for allegedly breaking Missouri state law by assessing closing cost fees. Closing costs for a timeshare may be charged when a timeshare transfer occurs or is sold for documentation preparation and/or legal fees – but doing so is only allowed in states where it’s permissible. The proposed $1.3 million class action settlement aimed to benefit owners that made the purchase on or after 6/1/2014.
Unlike some class action settlements, those purportedly victimized by the sales process didn’t have to do anything to receive more information. The plaintiff’s representation added nearly 7K class members to the lawsuit automatically. Owners were notified of their inclusion in the class action order and given the ability to exclude themselves within 30 days. Each confirmed member of the class action suit will receive a monetary payment based on the amount of the timeshare closing costs charged by the defendant.
Details of the Settlement and Payout Schedule.
The final hearing for Darrell and Kathleen Thompson v. Resort Sales Missouri Inc. and Spinnaker Resorts Inc., (Case No. 1746-CC00203, in the Circuit Court of Taney County, Missouri) was late last year. Defendants found themselves on the hook for $1.4 million and were ordered to begin payments within 10 business days of the “Preliminary Approval Date” by depositing $19,976 into a trust account of the Claims Administrator. Once this went into effect, they had 10 more business days to deposit the remaining balance of $1,380,024. Hopefully this sends a message that charging timeshare closing costs is a terrible idea in Missouri.
Class Action Lawsuits for Timeshare Closing Costs Are Costly.
The initial balance was portioned to cover “all estimated fees and expenses necessary” for class notice or administration incurred and approved by the court. $896,357 of the second payment went towards “Net Settlement Proceeds” and nearly $477K covered litigation expenses ($10K) and attorney fees (33% of settlement). Remaining totals were used for “Incentive Awards” and other claims administration funds. Any funds left unclaimed will be “dispersed in cy pres, with the court accepting suggestions on the organization to whom such additional funds shall be dispersed.”
The court was given 30 days to terminate the agreement if the settlement wasn’t honored or further problems arose. The State’s Attorney General, Eric Schmitt, didn’t provide much insight as to why developers were charging timeshare closing costs. “Missourians sometimes are targeted by real estate developers and resort communities to buy vacation timeshares,” he said. Until timeshare companies are held accountable for arguable practices, it’s hard to expect this type of activity to cease anytime soon.