HGV Wins Critical Ruling Against Timeshare Exit Companies

[The Colorado Kid]

From an email I received this morning

Dear Owners,

In recent years, there has been a disturbing rise of so-called timeshare exit companies that are deceiving consumers. These companies target timeshare Owners and trick them into paying hundreds, and sometimes even thousands, in upfront fees in exchange for empty promises to help them exit their timeshare contracts. In fact, these timeshare exit companies fail to deliver any legitimate service and, instead, leave customers in financial peril and with damaged credit ratings.

For far too long, these timeshare exit companies have gone unchallenged. We are pleased to announce that Hilton Grand Vacations has won a landmark ruling in federal court against two exit companies to protect Owners from predatory scams.

The landmark ruling is critical as it establishes that these exit companies engaged in false advertising and sets a precedent to protect timeshare Owners from future exit scams. Overall, this judgment is a significant step forward in Hilton Grand Vacations’ ongoing efforts to protect you from fraud and false advertising.

Owner Resources

We care about you and your ability to enjoy everything your vacation ownership has to offer. If you ever need assistance, please come to us first. We are ready to help you. To reach out to us, please visit The Club website for contact information.

We’ve also created educational resources on the various forms of timeshare and third-party exit fraud. To access these resources, including flyers, links to articles and more, visit my.hgv.com/fraudalert.

On behalf of HGV’s leadership team, thank you for your loyalty and for choosing to vacation with us. We wish you all a lifetime of happy vacation experiences and memories

Best regards,

Charles Corbin
Executive Vice President, Chief Legal Officer & General Counsel

 

[RX8]

This is related to Diamond Resorts recent lawsuit. More info here:

HGV Press Release: Diamond Resorts Wins Critical Ruling to Protec...

Read Press Release for Hilton Grand Vacations Common (HGV) published on Mar. 24, 2023 - Diamond Resorts Wins Critical Ruling to Protect Customers From Nationwide Consumer Scam

marketchameleon.com

This section from the article sums up the business model for almost all exit companies.

“The unambiguous factual message that the defendants are communicating to the timeshare owners is that they are selling a service in which they and their lawyers legally cancel the owners' timeshare contracts based on improprieties by Diamond. The defendants are not providing that service and they know it. The timeshare contracts are being cancelled because the owners follow the defendants' advice and stop making payments on the contracts, which triggers foreclosure by Diamond based on default. There are no lawsuits to speak of. There are no cancellations based on threats of litigation. The terminations are not the result of anything that Diamond did or said in the marketing and sales of the timeshares. Instead, they are based on common, run-of-the-mill defaults.”

 

[TUGBrian]

well, at least HGVC offers their deedback program to all owners. unlike DRI.

exit company scammers still deserve a special place in hell.

 

[Talent312]

Dear HGV Owners,
In recent years, there has been a disturbing rise of so-called timeshare exit companies that are deceiving consumers. These companies target timeshare Owners and trick them into paying hundreds, and sometimes even thousands, in upfront fees in exchange for empty promises to help them exit their timeshare contracts. In fact, these timeshare exit companies fail to deliver any legitimate service and, instead, leave customers in financial peril and with damaged credit ratings..

For far too long, these timeshare exit companies have gone unchallenged. We are pleased to announce Hilton Grand Vacations has won a landmark ruling in federal court against two exit companies to protect Owners from predatory scams....

Charles Corbin
Executive Vice President, Chief Legal Officer & General Counsel
------------------------------------------------

My reply would be:
Why was this necessary? It is because HGV does not have a formal, owner-friendly buy-back program (like some other TS companies). It it did, it would not be plagued with these scammers, non-performing TS and foreclosures.

Unfortunately, this will fall on deaf ears.
.

 

[HuskerATL]

I saw a FB person sent a scathing response to them about this and the HGV sale techniques that put many people into a situation of looking for an exit company. Kind of like Philip Morris actively promoting the nicotine patch as a quitting strategy....

 

[Tamaradarann]

Dear HGV Owners,
In recent years, there has been a disturbing rise of so-called timeshare exit companies that are deceiving consumers. These companies target timeshare Owners and trick them into paying hundreds, and sometimes even thousands, in upfront fees in exchange for empty promises to help them exit their timeshare contracts. In fact, these timeshare exit companies fail to deliver any legitimate service and, instead, leave customers in financial peril and with damaged credit ratings..

For far too long, these timeshare exit companies have gone unchallenged. We are pleased to announce Hilton Grand Vacations has won a landmark ruling in federal court against two exit companies to protect Owners from predatory scams....

Charles Corbin
Executive Vice President, Chief Legal Officer & General Counsel
------------------------------------------------

My reply would be:
Why was this necessary? It is because HGV does not have a formal, owner-friendly buy-back program (like some other TS companies). It it did, it would not be plagued with these scammers, non-performing TS and foreclosures.

Unfortunately, this will fall on deaf ears.
.

We know that at time HGVC will apply their ROFR to pick up units. Some of the prices they pay are significant. Someone in HGVC makes an analysis and approves a ROFR purchase at a certain price level. Perhaps to prevent the exit companies from existing HGVC should offer and advertise a buy back policy. The actual price could be as low as $1. This would provide an exit vehicle at minimum cost to HGVC, and prevent exit companies from existing with HGVC timeshares.

 

[dayooper]

I am going to partially defend HGVC here, but will give my criticisms after. The resale market is the exit program. By keeping resale deeds able to book basically anything they want, they allow the owners to more easily sell their deeds getting them out of the system. I purchased my second deed from a couple that had 2 deeds and were just happy to sell. They took may great vacations but was time for them to sell. My first was from an elderly couple that couldn't travel anymore (bought at The Flamingo if 1994). No other system allows resale deeds to have the booking rights we HGVC resale owners do. You can even get Elite status from some resale purchases. Many of us here ARE the exit program for owners. Other systems have you pay to surrender your ownership, but with HGVC you get by with no out of pocket money and even bring home a little cash (if your deed has any value to it at all).

Now, there are some serious issues with this system. Lower quality deeds are very hard to sell or even give away and may take payment to do so. HGVC does not advertise this option at all and sales actively discourages the resale program. People just don't know about it and it actively hurts their sales. There needs to be something for the owners of the lower quality deeds.

I saw a FB person sent a scathing response to them about this and the HGV sale techniques that put many people into a situation of looking for an exit company. Kind of like Philip Morris actively promoting the nicotine patch as a quitting strategy....

The sales department is the worst part of the system. The tactics they use are not helpful to the image and perception of the industry.

 

[HuskerATL]

I am going to partially defend HGVC here, but will give my criticisms after. The resale market is the exit program. By keeping resale deeds able to book basically anything they want, they allow the owners to more easily sell their deeds getting them out of the system. I purchased my second deed from a couple that had 2 deeds and were just happy to sell. They took may great vacations but was time for them to sell. My first was from an elderly couple that couldn't travel anymore (bought at The Flamingo if 1994). No other system allows resale deeds to have the booking rights we HGVC resale owners do. You can even get Elite status from some resale purchases. Many of us here ARE the exit program for owners. Other systems have you pay to surrender your ownership, but with HGVC you get by with no out of pocket money and even bring home a little cash (if your deed has any value to it at all).

Now, there are some serious issues with this system. Lower quality deeds are very hard to sell or even give away and may take payment to do so. HGVC does not advertise this option at all and sales actively discourages the resale program. People just don't know about it and it actively hurts their sales. There needs to be something for the owners of the lower quality deeds.


The sales department is the worst part of the system. The tactics they use are not helpful to the image and perception of the industry.

I agree for the most part. I like HGV and enjoy our trips so I cannot complain but the sale's folks tell so many outright lies that it really makes them look bad and it does persuade folks to buy that then get swindled by exit companies. Folks who know the system, like many Tuggers, know how to manipulate the system to their advantage but for every Tugger there are thousands who don't. They believe what they are told in the sale's meeting and then when they figure it out, it is too late or, they allow their selves to be talked into something that either they can't afford or really should not buy...such as elderly getting sold extra deeds to have something for their kids. It isn't just HGV though but there really needs to be regulated on what can be told in a sale's meeting if they are outright lies, they should be fired. If HGV wants to clean up the industry, start in house, and then fix the band aids.

 

[brp]

Now, there are some serious issues with this system. Lower quality deeds are very hard to sell or even give away and may take payment to do so. HGVC does not advertise this option at all and sales actively discourages the resale program. People just don't know about it and it actively hurts their sales. There needs to be something for the owners of the lower quality deeds.

If they had a blanket $0 take back for anything they sell (I would not expect them to necessarily take back a resale, for example), then I'd feel that they were truly doing their part. Folks could go out on their own to try and get more, but a $0 take back safety net would be a nice feature. Surely, for the small amount they'd pay to process this, they could turn around any deed at a profit.

Cheers.

 

[pedro47]

I am going to partially defend HGVC here, but will give my criticisms after. The resale market is the exit program. By keeping resale deeds able to book basically anything they want, they allow the owners to more easily sell their deeds getting them out of the system. I purchased my second deed from a couple that had 2 deeds and were just happy to sell. They took may great vacations but was time for them to sell. My first was from an elderly couple that couldn't travel anymore (bought at The Flamingo if 1994). No other system allows resale deeds to have the booking rights we HGVC resale owners do. You can even get Elite status from some resale purchases. Many of us here ARE the exit program for owners. Other systems have you pay to surrender your ownership, but with HGVC you get by with no out of pocket money and even bring home a little cash (if your deed has any value to it at all).

Now, there are some serious issues with this system. Lower quality deeds are very hard to sell or even give away and may take payment to do so. HGVC does not advertise this option at all and sales actively discourages the resale program. People just don't know about it and it actively hurts their sales. There needs to be something for the owners of the lower quality deeds.


The sales department is the worst part of the system. The tactics they use are not helpful to the image and perception of the industry.

Does HGVC take back deeds from former Diamond owners ?

 

[RX8]

Perhaps to prevent the exit companies from existing HGVC should offer and advertise a buy back policy. The actual price could be as low as $1. This would provide an exit vehicle at minimum cost to HGVC, and prevent exit companies from existing with HGVC timeshares.

Even if that was the case the scammer exit companies would still prey on those unsuspecting owners by convincing them that they have no other option but to pay them thousands of dollars. They would then allow HGVC buy it back for $1 pocketing a big profit. That is what pisses me off most about the exit companies. They portray themselves as consumer advocates but they are really just predators looking to make an easy buck.

 

[dayooper]

Does HGVC take back deeds from former Diamond owners ?

The still use the DRI system for deed takebacks. The contract (HVC/DRI is a trust program with some legacy deeds) must be paid off and up to date with their MF's. The cost is $1000 per contract. The contract must have been purchased from HVC/DRI as well. That can get quite expensive.

 

[dayooper]

If they had a blanket $0 take back for anything they sell (I would not expect them to necessarily take back a resale, for example), then I'd feel that they were truly doing their part. Folks could go out on their own to try and get more, but a $0 take back safety net would be a nice feature. Surely, for the small amount they'd pay to process this, they could turn around any deed at a profit.

Cheers.

Can they sell it again? There must be a glut of inventory as there have been so few non South Carolina deeds that have been ROFRed. Besides trade in's, it's their main source of inventory. If they aren't buying them back through ROFR, they aren't selling what they already own. They have to pay MF's on every deed they own.

I agree there should be some sort of buy back program but it isn't happening without them selling more.

 

[TUGBrian]

I hope that HGV enacts changes to the DRi deedback program to allow resale buyers to participate.... if not they are still throwing money at covering up the problem vs addressing it!

 

[Tamaradarann]

Even if that was the case the scammer exit companies would still prey on those unsuspecting owners by convincing them that they have no other option but to pay them thousands of dollars. They would then allow HGVC buy it back for $1 pocketing a big profit. That is what pisses me off most about the exit companies. They portray themselves as consumer advocates but they are really just predators looking to make an easy buck.

I disdain the exit companines as much as you do. If HGVC would promote the buy back like they do everything else owners would go directly to HGVC when they have a unit that they want to sell rather than going to the exit companies.

 

[TUGBrian]

Im not sure very many hilton owners are in the situation where they are forced into the hands of exit company scams.

hilton has had a surrender program for quite some time, but they are also fairly easy to give away (or sell in some cases).

diamond however, is a a whole different ball of wax due to how they penalize resale buyers.

 

[SmithOp]

You are correct @TUGBrian but now that HGVC has merged with DRI we are not sure who is rowing the boat. Will the penalizing DRI process stay in effect or will the more consumer friendly HGVC process be followed.

HGVC owners are still waiting to see how this is all going to shake out, there are lots of moving parts still not clear to owners.

 

[TUGBrian]

agreed. wont hold my breath however!

 

[dayooper]

You are correct @TUGBrian but now that HGVC has merged with DRI we are not sure who is rowing the boat. Will the penalizing DRI process stay in effect or will the more consumer friendly HGVC process be followed.

HGVC owners are still waiting to see how this is all going to shake out, there are lots of moving parts still not clear to owners.

agreed. wont hold my breath however!

Honestly I believe each group will continue as they always have with Max connecting the reservations/exchanges between the different groups (HGVC-HVC/DRI-Embarc).

 

[drucifer]

One would think HGVC/DRI could turn Deedback into the most profitable part of their operations. I mean, they don't have to build anything, they get a deed for nothing, and then sell it for $10-20-30k as a new retail deed. Seems like the best way to keep their retail sales operation with stock on hand and no additional construction costs.

Am I missing something?

 

[dioxide45]

I didn't think HGVC had a defined deedback program.

Hilton's biggest issue with any deed back program is that they don't have a trust based timeshare program. Taking back junk deeds that are hard to resell doesn't help them. Taking back junk deeds and putting into a trust to sell as points is much easier.

 

[dayooper]

One would think HGVC/DRI could turn Deedback into the most profitable part of their operations. I mean, they don't have to build anything, they get a deed for nothing, and then sell it for $10-20-30k as a new retail deed. Seems like the best way to keep their retail sales operation with stock on hand and no additional construction costs.

Am I missing something?

When HGV merged with DRI, DRI had several years of inventory to sell. The resorts need the MF's paid by who owns the weeks. If HGV owns the week, they are probably paying them. ROFR and tradein's are the main source of weeks for HGVC. If they aren't exercising ROFR, generally speaking they have enough inventory. With the exception of the SOuth Carolina resorts, they haven't been buying back deeds, even popular ones. By using ROFR for their main deed reacquisition, they can pick and choose which deeds they want or are in need of.

 

[CalGalTraveler]

The business model of HGVC and DRI are different:

HGVC is a deeded only system. If HGVC takes back a deed, then they must pay the MF on it. It becomes a burden on HGVC financials. As @dayooper said, HGVC has created a healthy resale market by enabling resale to have value. This allows owners to exit and keeps their books in good condition. It keeps everyone happy.

DRI is a trust system. If DRI takes back a deed, they then can dump it into the trust where The Club owners pick up the MF cost. They even take $1000 for each developer unit they take back and won't take resale. A reason DRI won't take resale is that they have destroyed their resale market by architecting so many resale limitations. If they opened deedbacks to resale, then they would be flooded with dissatisfied owners exiting and then they would have many other Club owners wanting to exit because MF will skyrocket. You reap what you sow.
I don't know how HVC can fix this DRI mess, perhaps easing some of the resale restrictions to make market resales more attractive? An easy low/no cost fix would be to allow resales to have same access to the entire Club instead of only the collection and some of the other benefits. Perhaps a low cost entry into MAX to requalify resales?

 

[dioxide45]

The business model of HGVC and DRI are different:

HGVC is a deeded only system. If HGVC takes back a deed, then they must pay the MF on it. It becomes a burden on HGVC financials. As @dayooper said, HGVC has created a healthy resale market by enabling resale to have value. This allows owners to exit and keeps their books in good condition. It keeps everyone happy.

DRI is a trust system. If DRI takes back a deed, they then can dump it into the trust where The Club owners pick up the MF cost. They even take $1000 for each developer unit they take back and won't take resale. A reason DRI won't take resale is that they have destroyed their resale market by architecting so many resale limitations. If they opened deedbacks to resale, then they would be flooded with dissatisfied owners exiting and then they would have many other Club owners wanting to exit because MF will skyrocket. You reap what you sow.
I don't know how HVC can fix this mess, perhaps easing some of the resale restrictions to make market resales more attractive?

Even if a deed is dumped into the trust, the unsold inventory still has to carry itself. Do if DRI is sitting on x number of unsold points, they have to cover the maintenance fees on those unsold points. That can't be passed on to other owners in the trust. The MF per point is calculated by total number of points in the trust not just the unsold points in the trust.

As for resales, I suspect they are just using it to be punitive for some reason. The population of resale owners in timeshare is relatively small (usually under 10%). I suspect resale owners are also happier overall as a percentage than those that buy direct. Resale owners usually did some amount of research into what they were buying vs. someone who signed up during a high pressure sales pitch.

 

[CalGalTraveler]

Good point @dioxide45 but wouldn't the overall cost of those points be shared with all owners of the trust? It also makes it easier for them to sell the points because they are not selling the dog deeds? That is why HGVC doesn't want the dog deeds...although MAX requalification for HGVC deeds provided a good way to offload many of these.