UPDATE: RCI CLASS ACTION LAWSUIT - must read for all RCI members [Includes Results]

Please click here for a summary and the form to object. - RCI Class Action Lawsuit


----------------------------------------------------------------------------------------------


A hearing was held on June 16th at the Federal Courthouse in Newark, New Jersey. There were four attorneys representing each side.

Shep Altshluler, editor of Timesharing Today Magazine, spoke eloquently on behalf of timeshare owners re: complaints about difficulty obtaining fair exchanges, rental of timeshare weeks to the general public, lack of transparency and oversight of the methods used to determine trading value of deposited weeks, etc... He expressed dissatisfaction with many aspects of the proposed settlement. And he particularly emphasized the lack of proper notice to RCI members.

A very passionate, articulate, and well informed attorney, Susan B. Collins, came all the way from West Seneca, N.Y. (400 miles-she flew in and rented a car) to address these issues and concerns--not as an attorney but as a timeshare owner. Sadly, there were no other RCI members present except for Yours truly and spouse. I spoke for about 25 minutes.

The Judge seemed to be very fair. He is a dignified, calm gentleman who listened carefully to each speaker and asked excellent questions. The RCI attorneys were given ample time to respond and explain their positions. The judge made some remarks indicating skepticism about some of their well-rehearsed rhetoric.

The main purpose of this hearing was to determine if RCI members had received adequate notice of the proposed settlement so that they would have had an opportunity to send letters to the Court expressing their approval or objection to the terms. RCI proudly stated that 15,500 members had submitted the required form by the April 6th deadline requesting one of the token "peace offerings". The Judge said that he considered that to be a rather low response considering that there are 1,500,000 weeks members. And more than 15,500 should have stepped up to claim freebies worth up to $100. if they had known about it.

An RCI attorney went on an on about how notice was given to members through publication in the Endless Vacations Magazine.

Miss Collins handed the Judge a copy of the EV issue and challenged him to find the notice. While he was searching, someone blurted out that is was on page 94. The RCI attorney volunteered that it was also listed in the Table of Contents. Miss Collins pointed out that it was in print much smaller than the other topics listed and could be easily overlooked. She suggested that it should have been prominently displayed on the cover of the magazine. The Judge seemed to agree.

When the RCI attorneys stated that the RCI web site also contained a link to information of the proposed settlement, Miss Collins handed the judge over 100 pages of "legalese" that she had printed out from the link. She said that even though she is an attorney, it was a daunting task for her to read through it all and try to comprehend what was being proposed as the settlement. I later pointed out that many timeshare owners are older folks who are not computer literate and do not visit the RCI web site.

When the Judge asked if RCI had sent Email notices to members, the attorneys said that they only had Email addresses for less than 50% of the members. I later pointed out that they sure bother me enough with Emails trying to sell something. Yet I never received an Email about the settlement. The Judge asked point blank if they had sent Emails about the settlement to any of the members and they conceded that they had not.

One issue in which the Judge seemed to have a particular interest was why the proposed settlement changes would last for only two years. The RCI attorneys spoke in general terms about how their busines model requires flexibility to adjust to changing conditions in the world (e.g "911" and the economy and gas prices, etc...). Their vague answers didn't make much sense to me. I don't think the Judge bought it either.

The attorneys who brought the suit were asked the same question. They said that RCI had convinced them that it would take so much time and trouble and expense to make the changes that they felt certain RCI would then leave the changes in place indefinitely. I doubt that anyone in the courtroom believed that one. The Judge asked about it again and again and said that if changes are needed they should become permanent so as not to have more lawsuits brought after the 2 year period expired.

One other issue the Judge questioned was why so many members seem dissatisfied about the exchange process. The RCI attorneys blamed the developers for over-promising during the sales presentation. They kept saying that they have no control over what the salespeople say and do. They even had the nerve to say that they would be addressing that issue as part of the changes that would be implemented as a result of this settlement. (Yeah, right!). There is not a word about that in the settlement. The Judge asked how they would do it and they made vague statements about holding some training sessions.

When I spoke, I discussed the "incestuous relationship" between RCI and the resort developers and sales teams. I said that most people attend a presentation to obtain a free gift. They did not do prior research and did not plan to buy a timeshare. The main selling point is usually the promise that they will be able to exchange their week if they buy one. They are shown the RCI "wish book" and led to believe it will be easy to just pick up the phone and make a reservation anywhere in the world they want to go. Most are led to believe that the week they are being offered has great trading power, even if it is a mud week in an undesirable location. This would not happen if there was some way for them to obtain an objective valuation of the week and its exchange potential before buying it or within the recission period, which by the way, should be much longer.

I mentioned how Redweek.com assigns a point value to a week before you deposit it. You are able to look through their inventory of already deposited weeks and determine what you will be able to obtain as an exchange. And you can purchase additional points, if necessary, to obtain a desired week that has greater trading power than yours. Redweek does not remove any of these weeks and sell them elsewhere. (Of course I'm aware of other problems with their system but I was trying to keep things simple). I observed the Judge jot down Redweek on his notepad.

But honestly, if RCI did not exist and most people deposited with Redweek (or a similar company), AND Redweek did a better job of properly valuing the weeks, and did not become beholden to developers and resorts, I think it would provide a far better outcome than the way RCI now operates. Redweek would be satisfied making a reasonable profit running an honest business. I'm afraid RCI will never be satisfied. They will always try to come up with new ways to make more and more money, no matter what tactics they have to use, and no matter how unfair or dishonest it may be to their members. When will companies stop letting GREED be their driving force. Hasn't enough damage already been done to the economies all over the world?

Both sides were directed to submit briefs by 4:00 p.m. June 23rd re: the matter of sending first class mail notices to members of the class action lawsuit. Thereafter the Judge will render a decision. STAY TUNED!

Thank you for this informative update and for taking the time & trouble to attend this hearing and speaking.

All of us RCI members are directly impacted and all timeshare owners in the long run.

Jennie, thank you for this clear, vivid update and for appearing in court. I really appreciate your hard work.

Jennie,

Thank you.

Nancy

Nicely done Jennie! I too appreciate your time and effort on behalf of everyone!

It sounds that between you and Shep Alshluler as strong a case as possible has been put on behalf of RCI members - thank you for your efforts.

I hope the judge is as solid as appears and that maybe some more meaningful settlement can be reached.

RCI Class Action Suit

Jennie said:

A hearing was held on June 16th at the Federal Courthouse in Newark, New Jersey. There were four attorneys representing each side.

Shep Alshluler, editor of Timesharing Today Magazine, spoke eloquently on behalf of timeshare owners re: complaints about difficulty obtaining fair exchanges, rental of timeshare weeks to the general public, lack of transparency and oversight of the methods used to determine trading value of deposited weeks, etc... He expressed dissatisfaction with many aspects of the proposed settlement. And he particularly emphasized the lack of proper notice to RCI members.

A very passionate, articulate, and well informed attorney, Susan B. Collins, came all the way from Seneca, N.Y. to address these issues and concerns--not as an attorney but as a timeshare owner. Sadly, there were no other RCI members present except for Yours truly and spouse. I spoke for about 15 minutes.

The Judge seemed to be very fair. He is a dignified, calm gentleman who listened carefully to each speaker and asked excellent questions. The RCI attorneys were given ample time to respond and explain their positions. The judge made some remarks indicating scepticism about some of their well-rehearsed rhetoric.

The main purpose of this hearing was to determine if RCI members had received adequate notice of the proposed settlement so that they would have had an opportunity to send letters to the Court expressing their approval or objection to the terms. RCI proudly stated that 15,500 members had submitted the required form by the April 6th deadline requesting one of the token "peace offerings". The Judge said that he considered that to be a rather low response considering that there are 1,500,000 weeks members. And more than 15,500 should have stepped up to claim freebies worth up to $100. if they had known about it.

An RCI attorney went on an on about how notice was given to members through publication in the Endless Vacations Magazine.

Miss Collins handed the Judge a copy of the EV issue and challenged him to find the notice. While he was searching, someone blurted out that is was on page 94. The RCI attorney volunteered that it was also listed in the Table of Contents. Miss Collins pointed out that it was in print much smaller than the other topics listed and could be easily overlooked. She suggested that it should have been prominently displayed on the cover of the magazine. The Judge seemed to agree.

When the RCI attorneys stated that the RCI web site also contained a link to information of the proposed settlement, Miss Collins handed the judge over 100 pages of "legalese" that she had printed out from the link. She said that even though she is an attorney, it was a daunting task for her to read through it all and try to comprehend what was being proposed as the settlement. I later pointed out that many timeshare owners are older folks who are not computer literate and do not visit the RCI web site.

When the Judge asked if RCI had sent Email notices to members, the attorneys said that they only had Email addresses for less than 50% of the members. I later pointed out that they sure bother me enough with Emails trying to sell something. Yet I never received an Email about the settlement. The Judge asked point blank if they had sent Emails about the settlement to any of the members and they conceded that they had not.

One issue in which the Judge seemed to have a particular interest was why the proposed settlement changes would last for only two years. The RCI attorneys spoke in general terms about how their busines model requires flexibility to adjust to changing conditions in the world (e.g "911" and the economy and gas prices, etc...). Their vague answers didn't make much sense to me. I don't think the Judge bought it either.

The attorneys who brought the suit were asked the same question. They said that RCI had convinced them that it would take so much time and trouble and expense to make the changes that they felt certain RCI would then leave the changes in place indefinitely. I doubt that anyone in the courtroom believed that one. The Judge asked about it again and again and said that if changes are needed they should become permanent so as not to have more lawsuits brought after the 2 year period elapsed.

One other issue the Judge questioned was why so many members seem dissatisfied about the exchange process. The RCI attorneys blamed the developers for over-promising during the sales presentation. They kept saying that they have no control over what the salespeople say and do. They even had the nerve to say that they would be addressing that issue as part of the changes that would be implemented as a result of this settlement. (Yeah, right!). There is not a word about that in the settlement. The Judge asked how they would do it and they made vague statements about holding some training sessions.

When I spoke, I discussed the "incestuous relationship" between RCI and the resort developers and sales teams. I said that most people attend a presentation to obtain a free gift. They did not do prior research and did not plan to buy a timeshare. The main selling point is usually the promise that they will be able to exchange their week if they buy one. They are shown the RCI "wish book" and led to believe it will be easy to just pick up the phone and make a reservation anywhere in the world they want to go. Most are led to believe that the week they are being offered has great trading power, even if it is a mud week in an undesirable location. This would not happen if there was some way for them to obtain an objective valuation of the week and its exchange potential before buying it or within the recission period, which by the way, should be much longer.

I mentioned how Redweek.com assigns a point value to a week before you deposit it. You are able to look through their inventory of already deposited weeks and determine what you will be able to obtain as an exchange. And you can purchase additional points, if necessary, to obtain a desired week that has greater trading power than yours. Redweek does not remove any of these weeks and sell them elsewhere. (Of course I'm aware of other problems with their system but I was trying to keep things simple). I observed the Judge jot down Redweek on his notepad.

But honestly, if RCI did not exist and most people deposited with Redweek (or a similar company), AND Redweek did a better job of properly valuing the weeks, and did not become beholden to developers and resorts, I think it would provide a far better outcome than the way RCI now operates. Redweek would be satisfied making a reasonable profit running an honest business. I'm afraid RCI will never be satisfied. They will always try to come up with new ways to make more and more money, no matter what tactics they have to use, and no matter how unfair or dishonest it may be to their members. When will companies stop letting GREED be their driving force. Hasn't enough damage already been done to the economies all over the world?

Both sides were directed to submit briefs by 4:00 p.m. June 23rd re: the matter of sending first class mail notices to members of the class action lawsuit. Thereafter the Judge will render a decision. STAY TUNED!

Click to expand...

Hi Jennie-I just heard about the Class Action suit last week and it said I could file the forms by clicking a link on the original website. Needless to say, I couldn't find it. I was NEVER informed of any Class Action suit.

Heck of a job. Thank you for your hard work.

Yes thank you for your hard work and keeping us informed!

Lakesgal said:

Hi Jennie-I just heard about the Class Action suit last week and it said I could file the forms by clicking a link on the original website. Needless to say, I couldn't find it. I was NEVER informed of any Class Action suit.

Click to expand...

Well, the RCI attorneys wanted the court to believe that all RCI members should have seen it buried on page 94 of Endless Vacations magazine. You mean you didn't see it there? :hysterical:

I let the Judge know that many timeshare owners hate that magazine, myself included, and toss it in the recycling bin unopened. I further told him that several years ago many of us notified RCI that we did not wish to receive the free magazine but we were told that there was no way to opt out, that receiving it was a requirement of our RCI membership!

And if you saw the link on the RCI web site, you would have had to read over 100 pages of legal mumbo jumbo to try and figure out what was being proposed.

I also told the Judge that the lawsuit had been pending for so many years that a lot of people assumed it had "died." Rumors would surface from time to time but they usually proved false. I told him that even if I had noticed the link on the RCI website, or saw the notice in the magazine, I wouldn't have trusted anything that came from RCI. I was awaiting some sort of official notification from the Court or the plaintiff's attorneys to let me know what was going on.

A BIG thank you for all the hard work you are putting into this!

Jennie your to be commended and all RCI members owe you, they just don't know it more than likely.

Thank you for both your update and attending the hearing. So many of us live so far away that we could not go to the hearing. All of your hard work on behalf of all of us is greatly appreaciated.

Suzanne

Thank you for the well written notice. Sounds like you were somewhat impressed with the judges responces. Hope some good comes from this.

fantastic update, ill include a link to this thread in mondays newsletter!

Thanks

Thank you.

lawsuit

Outstanding update Jennie. From what you witnessed, do you believe the court will open the class action lawsuit to members who were unaware of this lawsuit. I also didn't know about this until last month, by then, it was too late.

Last month, someone showed me a website where the military could go and rent time shares for a week. it looked very silimier to an rci web page. No deposit was required. All you had to do was verify you are military, and pay the fee for the week. Don't quote me but I think the website is;

afvclub.com (armed forces vacation club)

JPD said:

Outstanding update Jennie. From what you witnessed, do you believe the court will open the class action lawsuit to members who were unaware of this lawsuit. I also didn't know about this until last month, by then, it was too late.

Last month, someone showed me a website where the military could go and rent time shares for a week. it looked very silimier to an rci web page. No deposit was required. All you had to do was verify you are military, and pay the fee for the week. Don't quote me but I think the website is;

afvclub.com (armed forces vacation club)

Click to expand...

If you dig in a little to that website, you'll read it is not affiliated or paid for in any way by the U.S. Government. And in fact, the "About Us" page shows an address of "Resort Rental, LLC, 7 Sylvan Way, Parsippany, NJ 07054." A Google search of that address returns the Endless Vacations portion of RCI/Wyndham. So the site in whole is operated by RCI.

Dave

Jennie,

Nice report. Thanks for doing this.

I guess the only comment I have is comparing RCI to Redweek. I think that is not a fair comparison. The Redweek exchange network can't be declared a success yet. It may prove to be a good model, but until it reaches some level of critical mass, it's only an experiment.

To me, it would be like comparing a coin collection business to a vendor who was actively selling quarters for a dime. Early on, it would look like the vendor selling quarters for a dime had a heck of a growth business. But, as we all know, that is an unsustainable business model. Until a business becomes successful in a large scale way, you can't compare that business model to another one that has been in business for decades.

Well Done!

I want to echo what everyone else has already said. That is a very well written and detailed report. Thanks again for keeping us all informed. I for one was one of the many that missed seeing the notice in Endless Vacation.

Jennie,

Add me to the list of those thankful for your initiative. Heck, as someone else wrote, many don't even bother reading Endless Vacations and we would never have seen it.
However, some time ago, there were numerous threads about this lawsuit--and follow-up articles of people going out and getting the so-called 'settlement,' something like $25 in value, whatever it was, but certainly not worth the trade-off. What a farce this whole thing has been, and I'm so glad someone was there to represent us--just wish more from your area could have been there. (Or maybe they felt it was a waste of energy, given how things have gone to date.)

JPD said:

Jennie, From what you witnessed, do you believe the court will open the class action lawsuit to members who were unaware of this lawsuit. I also didn't know about this until last month, by then, it was too late.

Click to expand...

It's difficult to gauge what will happen. As in many court proceedings, there's a lot of "behind the scenes" issues that are not discussed in the courtroom. The attorneys (plaintiff) who brought the lawsuit seem to indicate that they feel it's better to settle for "half a loaf" rather than to go to trial and risk losing everything. RCI ( the defendant) has deep pockets to defend against the charges.

On the other hand, the plaintiff is asking for $4,000,000. as part of the settlement. This could be a powerful motive to not fight on.

The Judge did comment about how large a sum this is compared to the paltry amount being offered to RCI members.

He asked what I thought about the $100. cruise vouchers offer and I told him that in my opinion, they are worthless. They have been offered liberally to members for depositing a week, reserving a week, booking a "Last Call" vacation, etc..--things members do anyway without needing a coupon incentive. I consider them to be just a ploy to encourage members to book cruises through RCI which, of course, results in a commission for RCI. Anytime I have compared prices with RCI versus other popular cruise discount web sites, even using the $100. RCI voucher has not yielded a better price.

The judge nodded his head in agreement and said, "That's what I thought."

Our hope is that the Judge will decide that adequate notice has not been given to class members, and that he will order additional notification by first class mail. This will give time for more people to become informed about the issues and express their opinion about the proposed settlement.

Thanks for taking the time to see this through. Hopefully the court will see this for what it is.

BocaBum99 said:

Jennie,I guess the only comment I have is comparing RCI to Redweek. I think that is not a fair comparison. The Redweek exchange network can't be declared a success yet. It may prove to be a good model, but until it reaches some level of critical mass, it's only an experiment.

Click to expand...

Boca, I agree totally. I love Redweek for their rental and sale ads but I have not used their Exchange program. I didn't think their point valuation of the weeks we own correctly reflected their trading power when compared to what I routinely obtain when exchanging through RCI or I.I. or SFX, etc...

And, yes, Redweek does not yet have the quality, quantity, or variety of weeks in their inventory necessary to make the program a big success. But the point I was trying to make is that IF RCI did not exist, and huge numbers of weeks were deposited with Redweek, or a similar company, their model would allow members to see everything available at a given time, and to know how many points would be needed to book something they liked.

If the valuation seems inaccurate, and enough members complain, Redweek would be able to revisit the issue and make an adjustment. Who knows, maybe there was a typo while inputting the information.

People with low value weeks would learn the harsh reality and not count upon receiving exchanges from RCI that will never happen.

With Redweek (or a company operating in a similar way) the poor trusting owner who was duped into buying a "junk" week will at least have the ability to buy enough extra points to obtain a decent Redweek exchange. He's probably paying much lower maintenance fees so adding money to the pot, as needed, should not be a burden. As it stands now, his main option would to be to convert to RCI Points at a rip-off price (if available at his resort) and then buy more points to add to his low count. Or he could remain an unhappy, frustrated owner telling everyone he knows what a terrible thing it is to own a timeshare. And maybe join the growing ranks of disillusioned owners who are "walking away" from paying their fair share of maintaining their home resort, causing maintenance fees to rise for the rest of us.

The guy deserves a break. Letting him trade-up once in awhile won't have much impact upon owners of better weeks. And the small profit that Redweek (or a similar company) derives from selling the one time points needed to accomplish the exchange will help keep the exchange company profitable without entering into unholy alliances with developers, or renting deposited weeks to the general public.

Another huge benefit of transparent valuations is that inexperienced people attending a sales presentation will be able to check and see the approximate trading power of a week they are planning to buy, or have just bought and can still rescind. I believe that RCI's too cozy relationship with developers is one of their main reasons for fighting so hard to maintain secrecy.

As it stands now, no one has a clue how RCI determines anything. Try complaining and it falls on deaf ears.

The Judge, like most non-timeshare owners, does not know the nuances. To explain too much could cause confusion.

I was merely trying to cite a different, more transparent way of informing members of what an exchange company has in inventory and what it takes to receive a desired week. I wanted the Judge to know that there is a smaller exchange company out there that manages to serve the needs of its members, and still make a profit (I hope!) without "stealing" deposited weeks that members have paid all the fees on, and renting them to the general public, without in any way compensating the owner, while at the same time creating unfair competition to owners who are trying to rent their own weeks.

The crux of this lawsuit is to challenge RCI's rental of space-banked weeks. I wanted to point out that another exchange company does not do this.

Submissions to Court?

Thanks! News to me, too! Does anyone know if it's possible to submit comments to the court? A mailing address seems too late, since it's already June 21. But, how about an e-mail address? (Maybe I'm asking too much!)