# DRI Sued for high pressure sales tactics



## TUGBrian

http://www.courthousenews.com/2015/03/12/couple-claim-timeshare-group-rolled-them.htm



> A timeshare group used high-pressure tactics bill an elderly couple $50,000 for "membership services" and issue them an unwanted credit card they billed for $10,000 before the couple "even realized the card existed," the couple claim in court.



is interesting that it seems they claim this entire ordeal happened over the phone, vs at a presentation?


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## Fern Modena

Brian,
It began on the phone and then they went to a location in Arizona where they completed the sale.

Fern



TUGBrian said:


> http://www.courthousenews.com/2015/03/12/couple-claim-timeshare-group-rolled-them.htm
> 
> 
> 
> is interesting that it seems they claim this entire ordeal happened over the phone, vs at a presentation?


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## Passepartout

Looks like Cloobeck saw the handwriting on the wall. He sold a 'few' shares the day of the filing. Poor guy. I wonder where his next meal is coming from after his hench-weasels got caught with their hands in these 83-77 year old people's cookie jar.

 (Lulegacy.com, which reports on timeshare stocks, reported Tuesday that Diamond Resorts International director Stephen J. Cloobeck sold 4,778,000 shares of his company stock that day at $32.99 a share, for $157,626,220. It cited an SEC filing .) 

Jim


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## TUGBrian

but he couldnt have possibly traded securities based on inside information...thats illegal! :rollseyes


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## tschwa2

It looks like Cloobeck has been doing some cashing out and stepping back (but still being fully compensated with full health insurance benefits)  since the beginning of the year.

http://investors.diamondresorts.com/phoenix.zhtml?c=251836&p=irol-newsArticle&ID=2004411



> LAS VEGAS--(BUSINESS WIRE)--Jan. 6, 2015-- Diamond Resorts International, Inc., (NYSE: DRII) announced today that it has entered into an agreement to eliminate its external management structure with Hospitality Management and Consulting Service, LLC (“HM&C”), effective January 1, 2015.
> As part of the agreement, Diamond Resorts is acquiring the HM&C entity for a de minimis amount, and as a result, HM&C is becoming a wholly-owned and consolidated subsidiary of Diamond Resorts. *In addition, the Company has agreed with Stephen Cloobeck, founder and Chairman of Diamond Resorts and previous controlling owner of HM&C, to buy out the remaining term of Mr. Cloobeck’s services agreement with HM&C at a substantial discount.* Diamond also agreed to acquire from Mr. Cloobeck certain exclusive marketing rights in a high traffic retail complex adjacent to the Company’s Polo Towers managed resort on the Las Vegas Strip. *The Company will pay Mr. Cloobeck a total of $16.5 million in connection with these transactions.*
> *In connection with these agreements, Mr. Cloobeck will be the Non-Executive Chairman of the Board at least through December 31, 2017, so long as he remains a director of the Company. The Company has agreed to pay to him a director's fee and health insurance coverage during his tenure as Chairman. Mr. Cloobeck remains the Company’s largest stockholder.*
> “We are pleased to have reached this agreement, which, commencing immediately, creates a more transparent management and compensation structure that is in line with best practices, simplifies certain aspects of our financial reporting, and maintains a cost structure that is beneficial to our shareholders,” stated David F. Palmer, President and Chief Executive Officer. “We are also pleased to have secured control, at an attractive price, over the marketing rights at a very strategic location next to one of our key sales centers at our popular Polo Towers resort. We appreciate Stephen’s continued support of the Company and look forward to his ongoing insight and commitment to hospitality as Chairman.”
> The transactions announced today were reviewed and unanimously approved by the audit committee of the Board of Directors, which engaged independent advisors, including a nationally recognized independent valuation service provider, and by the disinterested members of the full Board of Directors.


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## pedro47

TUGBrian said:


> but he couldnt have possibly traded securities based on inside information...thats illegal! :rollseyes



Will this lawsuit be trouble for DRI ownership in the future?


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## csalter2

*I don't think so.*



pedro47 said:


> Will this lawsuit be trouble for DRI ownership in the future?



No. If it is, then every timeshare company in the business better clean up quickly.


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## TEA CIE

*Have I made a big mistake?*



csalter2 said:


> No. If it is, then every timeshare company in the business better clean up quickly.



I just purchased a lot of points in DRI US Collection. I rescinded my original purchase.  But the salesperson kept calling me every day and night and told me I would get her fired if I didn't go through with the purchase. As a single mother to a single mother,  I really felt for her especially because her son has given her a lot of trouble just like mine.  I finally agreed to a smaller point package. Now I am afraid it's all part of thEurope sales tactics. DRI seems like a horrible company.  The rescission period has passed but I have yet to receive the title and my membership number. Can I still back out of this?


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## artringwald

TEA CIE said:


> I just purchased a lot of points in DRI US Collection. I rescinded my original purchase.  But the salesperson kept calling me every day and night and told me I would get her fired if I didn't go through with the purchase. As a single mother to a single mother,  I really felt for her especially because her son has given her a lot of trouble just like mine.  I finally agreed to a smaller point package. Now I am afraid it's all part of thEurope sales tactics. DRI seems like a horrible company.  The rescission period has passed but I have yet to receive the title and my membership number. Can I still back out of this?



Many of us, myself included, have made the mistake of buying from the developer. If the recession period has passed, it's time to make the best of it. There's not much you can do without risking your credit rating. Use your points and enjoy your vacations, because you'll have a hard time giving them away. 

If the salesperson was able to close the sale to you, she was probably able to sell to others, and I doubt she'd lose her job over one recession.


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## pedro47

TEA CIE said:


> I just purchased a lot of points in DRI US Collection. I rescinded my original purchase.  But the salesperson kept calling me every day and night and told me I would get her fired if I didn't go through with the purchase. As a single mother to a single mother,  I really felt for her especially because her son has given her a lot of trouble just like mine.  I finally agreed to a smaller point package. Now I am afraid it's all part of thEurope sales tactics. DRI seems like a horrible company.  The rescission period has passed but I have yet to receive the title and my membership number. Can I still back out of this?



Please remember this: When a timeshare salesperson lips are moving 99.99% it is a lie. That sales person would not has lost her job because you rescinded the contract.


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## kalima

*Confused...*

I thought that you took on some resale points and got DRI to agree to bring them into The Club with a small purchase of DRI points from them directly?...Hopefully that's what you The Sales Weasels are generally thought of as lying ba$tards so don't ever feel sorry for them...look after number 1


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## TEA CIE

*Bought DRI via Club Combination*



kalima said:


> I thought that you took on some resale points and got DRI to agree to bring them into The Club with a small purchase of DRI points from them directly?...Hopefully that's what you The Sales Weasels are generally thought of as lying ba$tards so don't ever feel sorry for them...look after number 1



Hi, Kalima,  that's not what happened.  Since I already own several Marriott weeks I bought 50% matching points to bring them into DRI Club Combination to achieve platinum. The salesperson said I could only do one not both (that is, bringing in resale points and non-DRI weeks).


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## RuralEngineer

*clarification*



TEA CIE said:


> The salesperson said I could only do one not both (that is, bringing in resale points and non-DRI weeks).



Wrong!  You can NEGOTIATE everything.  nothing is hard and fast at the negotiation table.


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## kalima

*Aha!*

I do seem to remember you bought the points for a good price though....I think that most people are happy with joining the Club Combo thing If you had paid their full asking price then no you wouldn't be happy. I am sure you will learn how to make it work for you here on TUG and also DRI Friends Worldwide FB


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## Rent_Share

pedro47 said:


> Please remember this: When a timeshare salesperson lips are moving 99.99% it is a lie. That sales person would not has lost her job because you rescinded the contract.


 
IMHO you should file a complaint with the DRE she should loose her license, common advice on recsinding, do not take or return any calls


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## TEA CIE

kalima said:


> I do seem to remember you bought the points for a good price though....I think that most people are happy with joining the Club Combo thing If you had paid their full asking price then no you wouldn't be happy. I am sure you will learn how to make it work for you here on TUG and also DRI Friends Worldwide FB



That's right. I didn't purchase at their full asking price. With the advices from you and others at DRI Friends Worldwide I was able to get the price lowered quite a bit. But I didn't need to buy the package there and then if not out of sincere concern that someone would lose her job on account of me. I just never thought it was all part of their games. 



RuralEngineer said:


> Wrong!  You can NEGOTIATE everything.  nothing is hard and fast at the negotiation table.



So you're saying it's possible to do both? That I could have bought resale points to bring in along with Club Combination? Well it's too late for me. But hopefully someone else will be able to benefit from reading this.



Rent_Share said:


> IMHO you should file a complaint with the DRE she should loose her license, common advice on recsinding, do not take or return any calls



Now I know that I should not have listened to the cry messages. Being with Marrott for years I have never been afraid of taking calls from their sales and resales folks. Usually it's good things they call about. So when I get those crying calls I became very concerned. The thing is I was debating whether or not to buy more Marriott points to make their next tier. So when I realized that DRI would cost the same and save someone's job, I went for it. Stupid I know. But hopefully God knows my heart and will bless the decision and its future accordingly. Maybe DRI will change and become reputable, trustworthy, and offer truly world class resorts with reasonable MF's and great amenities like Marriott's. This is what their salespersons have told me, in fact the word they used was "guarantee" and I quote: "DRI resorts are just as good as the best out there and the company is working to offer the best timeshare program in the world. That's why Guggenheim invested 1 billion dollars in DRI and not any other timeshare companies including Marriott."  I truly hope so for my family's sake.


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## oceanvps

interesting, we bought and rescinded in 2010 ( i think) and they didn't even bother calling us -  i had to call them to make sure they got my letter/fax because i had expected harassment


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## artringwald

TEA CIE said:


> Maybe DRI will change and become reputable, trustworthy, and offer truly world class resorts with reasonable MF's and great amenities like Marriott's. This is what their salespersons have told me, in fact the word they used was "guarantee" and I quote: "DRI resorts are just as good as the best out there and the company is working to offer the best timeshare program in the world. That's why Guggenheim invested 1 billion dollars in DRI and not any other timeshare companies including Marriott."  I truly hope so for my family's sake.



I'm almost a happy DRI customer. Of the 7 DRI resorts where we stayed, we thought 5 of them were in good condition, and would stay there again. Two of them were overdue for renovations. All of them had friendly and helpful staff. (We don't talk to the salespeople.) 

I don't think I'd be as happy if we owned points in a trust collection. The MF's for enough points to book what a deeded week will get, cost at least 30% more. DRI keeps try to sneak optional charges into the MF's, like travel insurance and ARDA-ROC contributions. The trust arrangement helps DRI keep total control of the HOA's, so they can authorize higher payments to themselves for managing the resorts. As a whole, I think DRI exhibits more unethical behavior than other timeshare companies.


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## TEA CIE

artringwald said:


> I'm almost a happy DRI customer.



Why "almost"? Besides the mostly good resorts, what else about DRI makes you a happy owner?



artringwald said:


> MF's for enough points to book what a deeded week will get, cost at least 30% more.



This is also true with other timeshare companies including Marriott. For example, I pay 0.475 MF per DC point but only 0.4 per points on average on my weeks in Marriott.



artringwald said:


> DRI keeps try to sneak optional charges into the MF's, like travel insurance and ARDA-ROC contributions. The trust arrangement helps DRI keep total control of the HOA's, so they can authorize higher payments to themselves for managing the resorts. As a whole, I think DRI exhibits more unethical behavior than other timeshare companies.



That's a sad indictment of DRI. I heard about funny business in Europe but that's generally the case.  But with the laws we have in the US and the higher potential for litigation, you'd think most companies would think twice. There have been class action law suits against other timeshare companies.  Maybe it's time for class action against DRI. Someone, namely we, must hold them accountable and ethical.  After all it's our money and our family vacation travel that are at stake here.


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## T_R_Oglodyte

artringwald said:


> As a whole, I think DRI exhibits more unethical behavior than other timeshare companies.



I'm not sure I agree with that.  DRI strikes me as about typical to above average in that respect.  Unlike other timeshare companies, you can send a message to the chairman, and get a meaningful response.  In my experiences with the DRI sales crew at owner updates, on the whole they are no worse than middle of the pack in ethics.  While there are certainly exceptions (and we've experienced them) we've also experienced other sales people who didn't stretch the truth.  I've even had DRI sales people who actually listened to what our situation was, and where we wanted to head, and state that there really wasn't anything of value they could bring to us.  

Of course, there are horror stories, as there are with almost every other sales operation.  But it seems to me that the stories with DRI are fewer and farther between.  And it's night and day as compared with the Sunterra operation.


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## artringwald

TEA CIE said:


> Why "almost"? Besides the mostly good resorts, what else about DRI makes you a happy owner?


Over the years, we've vacationed at many different locations and resorts. For us, our very favorite place to stay is the Point at Poipu. By owning weeks there and booking a year in advance, we can get the units we like best. The manager does an excellent job maintaining the property. The staff is treated well, and we see many of the same faces year after year. When we check in, it feels like coming back home. When Sunterra was in control the property was going downhill. Since DRI took over, they've spent the money to get it back into shape. Of course, that has meant the MF's have increased, but I don't think they're unreasonable. One of our deeded weeks is in The Club, so we've able to use our points to stay at other DRI resorts. It's nice to have the flexibility of points, especially since short notice trips can be booked at a discount.

I'm unhappy because when problems have come up, I've found that it's very difficult to find the right DRI person in Las Vegas that knows what to do. Several times when I've called, I've been bounced around, sometimes back to the original person. It's taken patience and persistence to get questions answered or problems resolved. They're always polite, but they don't seem know who to contact about areas that are not their direct responsibility. Fortunately, when you finally get to the right person, they are able to help.


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## TEA CIE

*Above average?*

I only have experienced Marriott before DRI so don't know about other timeshare companies much except for what I read here. I am really glad to hear you say that DRI is better than average. As a new owner my biggest fear is getting into a bad program and dealing with an unethical company. I've been told that people can contact the chairman directly with complaints. But he seems to have cashed out a big chunk of money and stepped aside. What does being non-exclusive chairman mean?  On the other hand, since he is still the largest shareholder I would think he should still care where and how the business is going to protect his own pocket. 



T_R_Oglodyte said:


> I'm not sure I agree with that.  DRI strikes me as about typical to above average in that respect.  Unlike other timeshare companies, you can send a message to the chairman, and get a meaningful response.  In my experiences with the DRI sales crew at owner updates, on the whole they are no worse than middle of the pack in ethics.  While there are certainly exceptions (and we've experienced them) we've also experienced other sales people who didn't stretch the truth.  I've even had DRI sales people who actually listened to what our situation was, and where we wanted to head, and state that there really wasn't anything of value they could bring to us.
> 
> Of course, there are horror stories, as there are with almost every other sales operation.  But it seems to me that the stories with DRI are fewer and farther between.  And it's night and day as compared with the Sunterra operation.


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## TEA CIE

*Correction*

*non-executive*  darned auto correct


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## rickandcindy23

Wyndham and Westgate come to mind as being as bad as Diamond.


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## Coach Boon

*Cloobeck, Under cover boss and it comes from the top.*

I find this story interesting and as with many things, where there's smoke, there's usually fire or in this case at least some truth - legal stuff notwithstanding.

I've seen this guy on Undercover boss - if memory serves me, he goes around with a body guard. I thought it rather egotistic of him to have his own body guard ....but maybe he really does need one.

Also according to Undercover boss, he's one if not the most generous of all the bosses to be on the show. So, is this an ego or PR ploy perhaps? The reason I mention it is if he truly is that caring for his staff, then his organization wouldn't act the way it does. So I suspect, either his TV spotlight is just PR or his higher/middle managers are doing things that Coolbeck doesn't know about. In either case, the buck stops with him and he should take the ethical action needed if that's the case.

In addition, he's a trustee of the the American Resorts Developers Association. I'll leave that for you to decide if that's a positive or negative thing.

BTW - he's estimated worth a $100 Million. Think he can see his way to solving this problem for this couple?


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## pgnewarkboy

Anyone can file a lawsuit.  It doesn't mean they will win the suit.


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## curbysplace

Coach Boon said:


> In addition, he's a trustee of the the American Resorts Developers Association. I'll leave that for you to decide if that's a positive or negative thing.



There are two trade associations under the ARDA umbrella, one for developers and one for owners. The optional contribution to ARDA you see on your annual maintenance fee statement does go to the owners division.  What is interesting when you look at the list of the board members of the two "separate" organizations they are essentially the same people and/or companies & organizations. This in my opinion is a built-in conflict of interest.  Regarding their specific efforts, what I have seen over the years is that they are always in lock-step in their positions when they lobby a state legislature or US Congress. Often what is pushed in the interest of the developers is not best for owners.  Check it out for yourself online.


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## TEA CIE

*Interesting - Same Board for Two ARDA's*



curbysplace said:


> There are two trade associations under the ARDA umbrella, one for developers and one for owners. The optional contribution to ARDA you see on your annual maintenance fee statement does go to the owners division.  What is interesting when you look at the list of the board members of the two "separate" organizations they are essentially the same people and/or companies & organizations. This in my opinion is a built-in conflict of interest.  Regarding their specific efforts, what I have seen over the years is that they are always in lock-step in their positions when they lobby a state legislature or US Congress. Often what is pushed in the interest of the developers is not best for owners.  Check it out for yourself online.



Had never paid attention to this until now.  Can you post the links?

First thought I have is they shouldn't have the same board because like you said it is a conflict of interest.  Strange that no one has called for a change not even government oversight (is there one? )


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## curbysplace

Here is the link to the two boards of directors on the ARDA.org website  

ARDA--developers: 
http://www.arda.org/who-we-are/whoweare/boardofdirectors/overview.aspx
42 Board members

ARDA-ROC--owners:  
http://www.ardaroc.org/roc/about/default.aspx?id=1354
21 Board members

Many of the same people on both boards; if not the same people many of the same developers on both boards; some of the developer names show up differently--initials, different legal entity, etc., and most interestingly there are no independent individuals (correction there is one/owner representative or individual) on the 21-member ARDA-ROC (owners) Board.


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