Defaulting Mexican Timeshare

[Mike03]

Hello everyone!

After spending some time here in the forum, I decided to share my experience and also to get some opinions on my situation.

I bought a Taffer Residence Club "Membership" in Cancún, Mexico. In the end, it is a Timeshare. Don't get me wrong, the hotels are beautiful and the staff is very nice, however, I'm moving from the US to Europe so I decided to end the membership. The "loan" was made by them (I did not take a loan with a US bank or similar) and in the contract, it says that it is under Mexican Laws, and the contract is between myself, and the Owners of the Residence Club, in Mexico.
After getting the annual renewal fee last October, and still deciding if I will move to Europe, I stopped my payments. Last week, when I received my final job approval from Europe, I contacted them to tell them my decision and their first reaction was that I can't just cancel the membership because there is a contract, and if I don´t pay, I will go to collection here in the US. I told them that then I would speak with my lawyer because it didn't make sense that there was no way to cancel it. I'm not requesting any money back for what I have paid, which was a lot. Just don't pay anymore. They were upset about that. So far, they have told me that it will probably not be canceled, and since I owe them money, and I mentioned the lawyer, that will not help.
After reading all the Tugbbs posts related, I decided to share my experience here and will keep you guys updated.
The "loan" is still pending, yes, and I own the maintenance fees, however, I just used it until last year, and I pay all the monthly expenses, until the "renewal" of this next year.
I don't know how far they can get, after checking the contract, saying that it is under Mexican Laws, not having a property deed, and explicitly saying that it is a Membership.
As far as I know, if they send it to collection, and if it appears in my credit score, I can then write to Experian and the other credit bureaus explaining the situation and probably get out of that, right?.
Besides that, should I be worried in general? How far can they get?
I mean, I will be moving outside of the US for some years, but still wouldn't like to have any major issues.
Thanks in advance for any advice!

 

[DeniseM]

Just a heads up: Sometimes people use this forum to promote a "Timeshare Rescue" scheme - don't be that guy.

 

[Mike03]

Just a heads up: Sometimes people use this forum to promote a "Timeshare Rescue" scheme - don't be that guy.

Not sure what it means a “Timeshare Rescue” scheme. Just sharing my honest experience here and trying to get any advice.

 

[DeniseM]

Sometimes new posters lead off with a story like yours with the intention of promoting an unsavory company. I'm glad to hear that's not your objective.

 

[easyrider]

Hello everyone!

After spending some time here in the forum, I decided to share my experience and also to get some opinions on my situation.

I bought a Taffer Residence Club "Membership" in Cancún, Mexico. In the end, it is a Timeshare. Don't get me wrong, the hotels are beautiful and the staff is very nice, however, I'm moving from the US to Europe so I decided to end the membership. The "loan" was made by them (I did not take a loan with a US bank or similar) and in the contract, it says that it is under Mexican Laws, and the contract is between myself, and the Owners of the Residence Club, in Mexico.
After getting the annual renewal fee last October, and still deciding if I will move to Europe, I stopped my payments. Last week, when I received my final job approval from Europe, I contacted them to tell them my decision and their first reaction was that I can't just cancel the membership because there is a contract, and if I don´t pay, I will go to collection here in the US. I told them that then I would speak with my lawyer because it didn't make sense that there was no way to cancel it. I'm not requesting any money back for what I have paid, which was a lot. Just don't pay anymore. They were upset about that. So far, they have told me that it will probably not be canceled, and since I owe them money, and I mentioned the lawyer, that will not help.
After reading all the Tugbbs posts related, I decided to share my experience here and will keep you guys updated.
The "loan" is still pending, yes, and I own the maintenance fees, however, I just used it until last year, and I pay all the monthly expenses, until the "renewal" of this next year.
I don't know how far they can get, after checking the contract, saying that it is under Mexican Laws, not having a property deed, and explicitly saying that it is a Membership.
As far as I know, if they send it to collection, and if it appears in my credit score, I can then write to Experian and the other credit bureaus explaining the situation and probably get out of that, right?.
Besides that, should I be worried in general? How far can they get?
I mean, I will be moving outside of the US for some years, but still wouldn't like to have any major issues.
Thanks in advance for any advice!

The Mexican loan is enforceable in Mexico. The only credit reporting agency that would be notified is Mexican. Other International credit reporting agencies would not be notified unless the owner of the Mexican debt was able to use the other countries court system to enforce the debt.

The Mexican loan is secured with the membership so the owner of the debt would take the membership privileges back until paid.

Bill

 

[Mike03]

The Mexican loan is enforceable in Mexico. The only credit reporting agency that would be notified is Mexican. Other International credit reporting agencies would not be notified unless the owner of the Mexican debt was able to use the other countries court system to enforce the debt.

The Mexican loan is secured with the membership so the owner of the debt would take the membership privileges back until paid.

Bill

Thank you for your response Bill!. Actually what you say makes sense, however, their first reaction was to send me to collection here in the United States.

I don't know why if in the contract it simply says that you lose the membership and any privileges to travel. It clearly says that it is a membership, without a property deed, in Mexico.

They clearly don't lose anything, and they can resell that time to someone else. Let's see what happens.

Also, I have read other posts here where companies hire a Collection agency here in the US. It is very unfortunate, and even at this point, just knowing how they react when you want to get out, I would be really uncomfortable going back there. During the presentation, the seller told us that whenever we wanted to go out, they would even help us to sell it. Now you can really see that it is a different reality. We bought it because, during the presentation, they told us that every time they build a new hotel, the price of our points will increase, and it will be like investing in the company.

But well, it was another reality...

 

[T-Dot-Traveller]

Hi @Mike03
As Bill / @easyrider outlined - there is a difference between a Credit Reporting Agency and a Collection Agency.

It cost a Mexican resort nothing to send you to USA collections. The
Resort has either sold the debt or
does a split of revenue generated.

A Credit Reporting Agency = your credit score.

 

[Mike03]

Hi @Mike03
As Bill / @easyrider outlined - there is a difference between a Credit Reporting Agency and a Collection Agency.

It cost a Mexican resort nothing to send you to USA collections. The
Resort has either sold the debt or
does a split of revenue generated.

A Credit Reporting Agency = your credit score.

Thanks for your comment T-Dot-Traveller.
It is a little confusing since it states in the contract that if you don't pay, you lose the membership and any money that you have paid so far. That makes sense.
Sending to collection makes sense if it is a personal loan/credit card, where you spend the money, or if it is an unsecured debt. Or even if it is a service that was provided, and now you don't want to pay. If it is a mortgage or something like that, well you lose the property, get a dump on your credit score, and move on.
But here, for canceling a membership, it doesn't much sense, at least to me.

Let's see how this develops.
I have a copy of the contract and the contract cancelation articles saying what happens when you cancel. In case I have to send letters in the future to the Credit Bureaus.
Let's hope this resolves the easiest way possible.

 

[Mama Bear]

I have read most of the feed and like many others, I am confused. We have owned at Villa del Arco since June 2007 and have paid maintenance fees all the years until 2020. We stayed there in 2020 to get information on our options of giving it up and while there, we went to two presentations that they offered for members to upgrade our membership. Each time we told the Vill del Arco manager in charge, that we were trying to get out of our time share, not upgrade it. BOTH times the managers told us to just quit paying for it then, that the funds were in a Mexican bank and they couldn't do anything to us in the USA if we quit paying the maintenance fees. We also talked to another manger at another time share and he told us the exact same thing..."just don't pay any more maintenance fees". Today we received a notice from Monterey Financial Services about the $2475.54 we owed to Villa del Arco and if we didn't pay, it would affect our credit report. I am scared, because we have a 692 credit rating and we work hard to keep it up, without any negative items on it. We have paid them so much over the years and rarely used the Time Share!! My husband wants to ignore it, but I don't want negative credit for seven years or however long!! Can Monterey Financial relly enforce that??

 

[Mama Bear]

Sorry...really enforce that??

 

[Mama Bear]

Another thought...if we pay the amount of past MF and interest, then are we finally out of our contract or will they keep billing us MF in the next years? We jst want it behind us!!!

 

[Mama Bear]

As you can see...the leter from Monterey Financial really upset me. I just read my first message and made the mistake about our credit rating...it is 792, not 692 and I am so upset that this whole thing could blow up in our face. I'll stop now. Any thoughts or good advice on what to do??

 

[T-Dot-Traveller]

I have read most of the feed and like many others, I am confused. We have owned at Villa del Arco since June 2007 and have paid maintenance fees all the years until 2020. We stayed there in 2020 to get information on our options of giving it up and while there, we went to two presentations that they offered for members to upgrade our membership. Each time we told the Vill del Ar

Hi @Mama Bear - welcome to TUG

Today we received a notice from Monterey Financial Services about the $2475.54 we owed to Villa del Arco and if we didn't pay, it would affect our credit report. I am scared, because we have a 692 credit rating and we work hard to keep it up, without any negative items on it. We have paid them so much over the years and rarely used the Time Share!! My husband wants to ignore it, but I don't want negative credit for seven years or however long!! Can Monterey Financial relly enforce that??

DO NOT Contact Monterey Financial Services !!!

1) until you have read and understand your rights & status
As I understand it - if you acknowledge the debt they may be able to enforce it .

It is likely Villa del Arco sold your 4 year old MF debt [ as part of a package] to MFS for pennies.

As I understand it :
The debt is in Mexico . MFS is likely in the USA .
They can try and bully you [ but the MF debt has not been reported to a USA credit bureau / credit reporting agency.]
If they are in Mexico - they cannot report it to a USA credit bureau / credit reporting agency.

Please read what @easyrider has written here :

The Mexican loan is enforceable in Mexico. The only credit reporting agency that would be notified is Mexican. Other International credit reporting agencies would not be notified unless the owner of the Mexican debt was able to use the other countries court system to enforce the debt.

The Mexican loan is secured with the membership so the owner of the debt would take the membership privileges back until paid.

Bill

 

[Mike03]

As you can see...the leter from Monterey Financial really upset me. I just read my first message and made the mistake about our credit rating...it is 792, not 692 and I am so upset that this whole thing could blow up in our face. I'll stop now. Any thoughts or good advice on what to do??

Hi Mama Bear!
My situation changed a little just yesterday because the resort in my case wants to negotiate something, still, I'm researching in case we don't get a deal. I will even probably go to a lawyer, just to check the contract and know what they can do and what my options are. Most of the time, the first meeting with a lawyer is free, so it doesn't harm to go to two different ones, to have a better perspective.
However, from what I have read, yes, a collection agency can send it to the Credit Bureaus and can ding your credit. That doesn't mean it is the end of the world, you can dispute that and it can be removed. Another user here in TUG, said was succesfull that way, some other said 2 agencies removed it, but the other one didn't.
Have a copy of your contract, read what it says, where the Laws are applicable,, and what you have.
Contact the hotel telling that two agents told you that the only way to cancel was to stop the payments, and see what they can do for you or what they tell you.
I will keep you guys updated with my case, please do the same with yours, it can be helpful in the future for someone else.
Now, just to let you know, I have an 800+ credit score, a couple of years ago, I had a problem with an auto-pay in my mortgage while I was traveling, and I had a late payment there. My credit took a hit, and I tried to dispute it, without success.
However, since it was my only late payment in many many years, 2 years after that I was able to get a loan and they didn'tt cared about that. Right now, it is still in my credit, however it does not really affects anything.

 

[SteveinHNL]

Hi Mama Bear!
My situation changed a little just yesterday because the resort in my case wants to negotiate something, still, I'm researching in case we don't get a deal. I will even probably go to a lawyer, just to check the contract and know what they can do and what my options are. Most of the time, the first meeting with a lawyer is free, so it doesn't harm to go to two different ones, to have a better perspective.
However, from what I have read, yes, a collection agency can send it to the Credit Bureaus and can ding your credit. That doesn't mean it is the end of the world, you can dispute that and it can be removed. Another user here in TUG, said was succesfull that way, some other said 2 agencies removed it, but the other one didn't.
Have a copy of your contract, read what it says, where the Laws are applicable,, and what you have.
Contact the hotel telling that two agents told you that the only way to cancel was to stop the payments, and see what they can do for you or what they tell you.
I will keep you guys updated with my case, please do the same with yours, it can be helpful in the future for someone else.
Now, just to let you know, I have an 800+ credit score, a couple of years ago, I had a problem with an auto-pay in my mortgage while I was traveling, and I had a late payment there. My credit took a hit, and I tried to dispute it, without success.
However, since it was my only late payment in many many years, 2 years after that I was able to get a loan and they didn'tt cared about that. Right now, it is still in my credit, however it does not really affects anything.

Take a look at your credit report. If the debt does not appear on your credit report, I kind of doubt that this "non-existent debt" (as far as the credit reporting agency is concerned) can be reported to the credit reporting agency. As for the US debt collector, I would send them a letter stating you dispute any debt and demand they stop contacting you, which triggers your rights under the Fair Debt Collection Practices Act (i.e., they have to stop or the US collection agency puts itself at risk for, I believe, $1,000 per violation (i.e., $1,000 per contact). And keep an eye on your credit report.

 

[Mama Bear]

Thank you all for your thoughts...I'm not sure what route we will take yet. I am thinking that since it is only about $2500, just pay it and get over it. But the problem still remains...if we pay it, does that stop MF payments from here on, or will they keep billing us? I don't ever want to go to Villa del Arco again!!

 

[SteveinHNL]

Thank you all for your thoughts...I'm not sure what route we will take yet. I am thinking that since it is only about $2500, just pay it and get over it. But the problem still remains...if we pay it, does that stop MF payments from here on, or will they keep billing us? I don't ever want to go to Villa del Arco again!!

Like a stray kitten, I suspect if you feed it, it will come back for more.

 

[easyrider]

However, from what I have read, yes, a collection agency can send it to the Credit Bureaus and can ding your credit.

It depends on the debt. If it is a loan through an American lending institution, like a Barclays line of credit, then the loan is an American debt and is reportable and able to proceed to collection like any other American debt. If it is a line of credit through a Mexican company like a resort, the debt, whether loan or maintenance fee, is not reportable to credit agencies in the USA and can only be collected with the debtors cooperation. A collection agency can buy the debt and try to negotiate a settlement. If the settlement is signed by the debtor , the debt becomes an American debt.

Bill

 

[Mike03]

It depends on the debt. If it is a loan through an American lending institution, like a Barclays line of credit, then the loan is an American debt and is reportable and able to proceed to collection like any other American debt. If it is a line of credit through a Mexican company like a resort, the debt, whether loan or maintenance fee, is not reportable to credit agencies in the USA and can only be collected with the debtors cooperation. A collection agency can buy the debt and try to negotiate a settlement. If the settlement is signed by the debtor , the debt becomes an American debt.

Bill

Thanks for your answer Bill.
In my case, it is a Mexican “Loan” through the resort. Not US bank backed loan. Thats why I was surprised they want to send it to collections.

 

[T-Dot-Traveller]

Thanks for your answer Bill.
In my case, it is a Mexican “Loan” through the resort. Not US bank backed loan. Thats why I was surprised they want to send it to collections.

Hi @Mike03
They sent it to a collection agency on the hope you would pay up

[and that you would NOT find TUG and learn that a Mexican debt does not
get reported to a USA credit bureau / credit reporting agency.

 

[T-Dot-Traveller]

Thank you all for your thoughts...I'm not sure what route we will take yet. I am thinking that since it is only about $2500, just pay it and get over it.

But the problem still remains...if we pay it, does that stop MF payments from here on, or will they keep billing us? I don't ever want to go to Villa del Arco

1)That would be a waste of $ 2500

2 ) They will keep billing you for future MF

 

[geist1223]

Time to stop all Payments and walk away. Do not respond to any contact from anybody.

 

[easyrider]

Thanks for your answer Bill.
In my case, it is a Mexican “Loan” through the resort. Not US bank backed loan. Thats why I was surprised they want to send it to collections.

They say many things to keep you on the hook. The tricky ones will file for a court date to get a judgement and send you the paperwork but they won't show because they can't prove the loan. Often times they can get a debtor to sign a promissory note as the debtor feels they are getting a deal. This note is enforceable and they can get a judgement on the new note once signed.

Bill

 

[LeslieDet]

Take a look at your credit report. If the debt does not appear on your credit report, I kind of doubt that this "non-existent debt" (as far as the credit reporting agency is concerned) can be reported to the credit reporting agency. As for the US debt collector, I would send them a letter stating you dispute any debt and demand they stop contacting you, which triggers your rights under the Fair Debt Collection Practices Act (i.e., they have to stop or the US collection agency puts itself at risk for, I believe, $1,000 per violation (i.e., $1,000 per contact). And keep an eye on your credit report.

Just FYI - I'd be careful about saying that once a consumer disputes the debt, that the collection agency must stop entirely, as certain communications are still allowed within that 30 day period. 15 U.S. Code section 1692g - Validation of debts.

Also, Debt collectors can report to credit agencies after contacting the consumer, but not prior to the collection demand. So, it won't appear on the credit report before hand, but it can appear after the demand. Under the FDCPA, the collection agencies cannot report false information about the debt (this is a link to the CA DOJ info re debt collectors). https://oag.ca.gov/consumers/general/debt-collectors

 

[SteveinHNL]

Just FYI - I'd be careful about saying that once a consumer disputes the debt, that the collection agency must stop entirely, as certain communications are still allowed within that 30 day period. 15 U.S. Code section 1692g - Validation of debts.

Also, Debt collectors can report to credit agencies after contacting the consumer, but not prior to the collection demand. So, it won't appear on the credit report before hand, but it can appear after the demand. Under the FDCPA, the collection agencies cannot report false information about the debt (this is a link to the CA DOJ info re debt collectors). https://oag.ca.gov/consumers/general/debt-collectors

Good info, thanks.