RCI apparently sued again over rentals

[reddiablosv]

I for one am happy to see this lawsuit. I can't be certain that RCI is "skimming" off the best weeks, but the lawsuit offers at least a reasonable chance of finding out if that is the case or not, and perhaps stopping it if it is the case.

I am not a lawyer, but I very much doubt that RCI has the right to rent out any weeks that it chooses and pocket the proceeds, even if RCI's Terms & Conditions says that RCI can do anything that it wants with deposited weeks. The fact that RCI presents itself as an exchange company implies that they will, in fact, provide exchanges, not just take weeks and rent them out. Also, RCI says that they provide comparable exchanges, which will not be possible if a substantial portion of desirable deposits are diverted to rentals.

Furthermore, if RCI really intends its T&C to mean that they can do anything with the weeks they receive (rent them, let them expire even if people want them, give them to their CEO for free, whatever) then I think they are setting up a "lack of consideration" situation. The "RCI can rent out all the weeks because its T&C says so" argument basically says that members give RCI the $89 membership fee and their timeshare week, and in exchange, RCI is allowed to pocket the $89, take the week for its own use, and give the members nothing. This doesn't sound like an legal agreement to me.

As for the advice to just not use RCI, let me point out that people with weeks banked at RCI gave those weeks to RCI as much as three years ago, before the allegations of "skimming" started. The "Don't use RCI" advice doesn't work if they already have your week.

Judy, you are right on target. RCI will not be the first company to try to make illegal or unethical behavior legitimate by writing self serving T&Cs that has been shot down under legal challenge. In addition, there is the whole notion of full disclosure. The timeshare owner deposits his week with RCI with the expectation of getting a comprable exchange. Is he being told that what percentage of the weeks deposited are being diverted to the rental pool? Would he still deposit his week, if he was told that 90% of all Hawaii summer weeks deposited are diverted for rent rather than being offered for exchange? Would he still deposit his week with RCI or might he choose HTSE if he was given full disclosure?

 

[copper]

My hat is off to Steve and the few others who have kept these issues in front of us, but especially to Steve, who has fought a good fight here despite opposition that has been no less than vicious at times.

Very well put.

 

[BocaBum99]

Very well put.

If the descriptor of "vicious" is used, I'd have to say that it goes both ways.

 

[BocaBum99]

I for one am happy to see this lawsuit. I can't be certain that RCI is "skimming" off the best weeks, but the lawsuit offers at least a reasonable chance of finding out if that is the case or not, and perhaps stopping it if it is the case.

I am not a lawyer, but I very much doubt that RCI has the right to rent out any weeks that it chooses and pocket the proceeds, even if RCI's Terms & Conditions says that RCI can do anything that it wants with deposited weeks. The fact that RCI presents itself as an exchange company implies that they will, in fact, provide exchanges, not just take weeks and rent them out. Also, RCI says that they provide comparable exchanges, which will not be possible if a substantial portion of desirable deposits are diverted to rentals.

Furthermore, if RCI really intends its T&C to mean that they can do anything with the weeks they receive (rent them, let them expire even if people want them, give them to their CEO for free, whatever) then I think they are setting up a "lack of consideration" situation. The "RCI can rent out all the weeks because its T&C says so" argument basically says that members give RCI the $89 membership fee and their timeshare week, and in exchange, RCI is allowed to pocket the $89, take the week for its own use, and give the members nothing. This doesn't sound like an legal agreement to me.

As for the advice to just not use RCI, let me point out that people with weeks banked at RCI gave those weeks to RCI as much as three years ago, before the allegations of "skimming" started. The "Don't use RCI" advice doesn't work if they already have your week.

I agree with most of your points. I, too, like that RCI is being challenged. I'd just like for the truth to come out one way or another.

What I disagree with is your last point. A person who deposited their week 3 years ago could have exchanged it 3 years ago. They had the opportunity to exchange and they chose not to do so. If the choices are not as good now, they were the ones who took the chance and lost out.

Nobody says that there are no exchanges available. In fact, there are plenty.

 

[JLB]

Yeah, I was around for kinder, gentler times and I still have private emails concerning Steve and his tenacity. But, he has hung in there.

It's the teaming up against one person that makes it so hard. That appears to have fueled his passion over the years.

If you really pay attention to him, though, he is not just all sour grapes. He has a strong love for and committment to timesharing and obviously would like to see it preserved for others to enjoy also. You can tell he has devoted a lot of years to it.

If the descriptor of "vicious" is used, I'd have to say that it goes both ways.

 

[BocaBum99]

Yeah, I was around for kinder, gentler times and I still have private emails concerning Steve and his tenacity. But, he has hung in there.

It's the teaming up against one person that makes it so hard. That appears to have fueled his passion over the years.

If you really pay attention to him, though, he is not just all sour grapes. He has a strong love for and committment to timesharing and obviously would like to see it preserved for others to enjoy also. You can tell he has devoted a lot of years to it.

I love Steve. He is great for timesharing. His posts have the highest ratings of any I have seen. He is the EF Hutton of TUG. When Carolinian speaks, people listen.

I have never seen anyone as committed to the purity of weeks based timesharing as Carolinian. I am certainly not as committed to my positions as he is.

My focus is on predicting outcomes. Unfortunately for Steve, the trends I see are not favorable for his desired end state for timesharing. More rentals, more point based offerings, more resort groups and slimmer pickings for weeks based exchange is what I read in the tea leaves. There are too many settled macroeconomic theories that help support those predictions.

 

[skim118]

As an RCI weeks member, I appreciate Steve's efforts in pointing out the RCI "rentals" issue.

Also I clearly remember in many threads it was "pointed" out to Steve that the absence of any lawsuits against RCI should be considered proof that RCI is in the clear !

I am glad a lawsuit has been filed; if nothing else RCI will not blatantly rent out Embassy Maui weeks thru Snaptravel for a while !

Sara

 

[Walt]

Lack of post from Pro RCI Group

As an RCI weeks member, I appreciate Steve's efforts in pointing out the RCI "rentals" issue.

Also I clearly remember in many threads it was "pointed" out to Steve that the absence of any lawsuits against RCI should be considered proof that RCI is in the clear !

I am glad a lawsuit has been filed; if nothing else RCI will not blatantly rent out Embassy Maui weeks thru Snaptravel for a while !

Sara

I find it interesting that the Pro RCI Group's plan of action appears to be to not fuel the fire with post on this Thread. This Damage Control is the same as I would expect from RCI itself.

Walt

 

[geekette]

I find it interesting that the Pro RCI Group's plan of action appears to be to not fuel the fire with post on this Thread. This Damage Control is the same as I would expect from RCI itself.

Walt

Many of us don't really feel the need to "pick a side". I'm a member of RCI Weeks and have a deposit there. I also use DAE. Please don't try to fit me into one group or another as I am pro and con.

RCI is what it is, does what it does. I've had some great vacations. Doesn't make me a cheerleader.

I like that RCI has more resorts to choose from (were all to have weeks deposited for exchange) but I don't like their rental practices or constant fee increases. Doesn't make me a basher.

 

[timeos2]

It isn't all one thing

As an RCI weeks member, I appreciate Steve's efforts in pointing out the RCI "rentals" issue.
Sara

Concentrating solely on the rental issue and weeks trades. I applaud Steve as well as he has been a great voice for those that believe the weeks based system was the best. I think he overlooks the fact that many owners are in fact dissatisfied with what they get in week for week trades and do in fact desire an improved model such as RCI Points. That doesn't mean his position is any less valid but don't try to say those of us who prefer points are automatically in the wrong.

The second mistake he often falls into is combining the rental question with points. They are two separate issues as rentals were around long before points were a gleam in RCI corporate eyes. I know he feels that points somehow triggered the explosion in rentals but IMO that happened due to the Internet more than points. We don't know for sure and it can be argued both ways but trying to make them one issue doesn't help anyones case. I have always been against renting by exchange companies but I also understand why they need to do it. What Steve & I disagree on is the "why" rents are out there not the fact that renting by exchange companies isn't good for owners. Unless either points or weeks goes away so we can see what that does to the rental offers we can't know for sure if either theory is right or if rentals will occur no matter what trade method is used.

I would far rather concentrate on the outrageous fees that DVC and now Manhattan Club charge to exchange guests who have already paid their annual costs than the silly arguments over which exchange methodology is best. Those fees hurt everyone - points or weeks - and are clearly in violation of the exchange rules. That is a class suit worth fighting but there isn't much money in the good fight so we won't see Shyster & Shyster at law jumping on that one.

 

[Walt]

Being Neutral is Fine!

Many of us don't really feel the need to "pick a side". I'm a member of RCI Weeks and have a deposit there. I also use DAE. Please don't try to fit me into one group or another as I am pro and con.

RCI is what it is, does what it does. I've had some great vacations. Doesn't make me a cheerleader.

I like that RCI has more resorts to choose from (were all to have weeks deposited for exchange) but I don't like their rental practices or constant fee increases. Doesn't make me a basher.

Being Neutral and a member of RCI is fine. My post was not meant for you.
One, you are posting on this Thread. Two, you have a RCI membership.

Walt

 

[bogey21]

I am told that there is now another lawsuit against RCI over the rental issue, and also some of the points vs weeks issues.

How many lawsuits do we know about?

GEORGE

 

[Spence]

Club Options (the Sunterra name for points) that I never saw when I did straight weeks deposits with II using the exact same ownership and not even use the whole value of the deposit to do it. To me that shows the favoritism II gives the big names they court so heavily and allow to get away with anything they ask for it seems. So I guess while I did stop paying to be an II member I am still technically in II.

SunOptions is the name for Club Sunterra's points.

 

[Carolinian]

The second mistake he often falls into is combining the rental question with points. They are two separate issues as rentals were around long before points were a gleam in RCI corporate eyes. I know he feels that points somehow triggered the explosion in rentals but IMO that happened due to the Internet more than points. We don't know for sure and it can be argued both ways but trying to make them one issue doesn't help anyones case. I have always been against renting by exchange companies but I also understand why they need to do it.

As far as exchange companies ''needing'' to do it (rent), one simply has to look at the fact that they were making very nice profits before they got off into the rentals to see that, in fact, they do NOT need to do it.

This argument that ''the internet'' caused exchange company rentals to the general public also doesn't hold water. The internet is simply the mechanism they used to push the rentals.

The great upsurge in rentals coincided with RCI's offering more and more non-timeshare frills. Yes there had been cruise exchanges, but a much wider array was added with Points Partners. I remember the arguments I had with points advocates on the old TUG board in the early days of GPN (the early name of RCI Points), where I observed that some slippery language RCI was using in its description of its new program meant that they were going to start widespread timeshare rentals to the general public to support Points Partner inventory, and that this phase of GPN virtually required them to either rent weeks themselves or to give them to the Points Partners to in turn rent out. This is one of the reasons I described Points Partners as ''polluting the timeshare exchange system with non-timeshare goods and services''. The points advocates then came up with some really creative theories as to why there would not be such rentals. We saw who turned out to be right. All it took was a little common sense.

As far as I am concerned, to bring timeshare exchanging back to where it ought to be, we need to get rid of all of the frills. Most of them are very poor value, anyway.

 

[Barbeque]

There is a new sighting posted on the sightings board that I believe would have remained in rentals had these lawsuits not been filed. Looks like damage control to me. I have received reasonable trades from RCI but have had to educate myself through TUG etc. to do so. Hopefully this will improve in the future.

 

[jerseygirl]

There is a new sighting posted on the sightings board that I believe would have remained in rentals had these lawsuits not been filed. Looks like damage control to me. I have received reasonable trades from RCI but have had to educate myself through TUG etc. to do so. Hopefully this will improve in the future.

I thought the same thing when I saw it .... looks like poor SnapTravel (the outside vendor ) didn't get them this time. Thank you Walt ... and thank you lawsuits!

 

[timeos2]

Please - things don't move that fast

I thought the same thing when I saw it .... looks like poor SnapTravel (the outside vendor ) didn't get them this time. Thank you Walt ... and thank you lawsuits!

Already I have to break my self imposed rule. Darn.

But really - you are kidding about this, right? Yes those weeks are on sightings but the same dates are on Snaptravel - I just looked. SO either there is a glut of that time (overbuilt anyone? - just funnin') or its first come first served on those weeks. I'd bet on #2.

Hopefully thats it on the topic it but who knows. Somethings just can't go unchallenged.

 

[Carolinian]

Well, otherwise, they might have just been on Snaptravel.

 

[jerseygirl]

Well, otherwise, they might have just been on Snaptravel.

Agree -- just like last time.

 

[Walt]

Maui Embassy Exchanges were not showing up in November!

Already I have to break my self imposed rule. Darn.

But really - you are kidding about this, right? Yes those weeks are on sightings but the same dates are on Snaptravel - I just looked. SO either there is a glut of that time (overbuilt anyone? - just funnin') or its first come first served on those weeks. I'd bet on #2.

Hopefully thats it on the topic it but who knows. Somethings just can't go unchallenged.

John,

Check this Post to Ask RCI:

http://www.tugbbs.com/forums/showthread.php?t=12717&highlight=Walt

This is what I wrote on November 24, 2005:

"I was told today by the Embassy Maui that the deposit below were Owners Weeks made with a Bulk Spacebanking. The were not used for Cruises or any other Points program. I have not had one Weeks owner tell me that they can see these weeks when doing an Exchange Search. I used a week for an Weeks Exchanged Search that had Maximum Trade Value as told to me by a VC. I saw nothing."

The first point being I saw a very large number of Maui Embassy and many other Hawaiian Weeks on Snap Travel. With a Week that had Maximum Trade Power I saw nothing on an Exchange Search.

The 2nd Point, is that only Maui Embassy Owners should be seeing any Exchanges more than 6 months out.

Walt

 

[BocaBum99]

As far as exchange companies ''needing'' to do it (rent), one simply has to look at the fact that they were making very nice profits before they got off into the rentals to see that, in fact, they do NOT need to do it.

This argument that ''the internet'' caused exchange company rentals to the general public also doesn't hold water. The internet is simply the mechanism they used to push the rentals.

The great upsurge in rentals coincided with RCI's offering more and more non-timeshare frills. Yes there had been cruise exchanges, but a much wider array was added with Points Partners. I remember the arguments I had with points advocates on the old TUG board in the early days of GPN (the early name of RCI Points), where I observed that some slippery language RCI was using in its description of its new program meant that they were going to start widespread timeshare rentals to the general public to support Points Partner inventory, and that this phase of GPN virtually required them to either rent weeks themselves or to give them to the Points Partners to in turn rent out. This is one of the reasons I described Points Partners as ''polluting the timeshare exchange system with non-timeshare goods and services''. The points advocates then came up with some really creative theories as to why there would not be such rentals. We saw who turned out to be right. All it took was a little common sense.

As far as I am concerned, to bring timeshare exchanging back to where it ought to be, we need to get rid of all of the frills. Most of them are very poor value, anyway.

Here is where we start diverging in opinion. Rentals and exchanges are two birds of a feather. Both are methods of trading your week for something else of value.

More rentals are occurring because renting is a more efficient method of trading. And, markets always trend toward the most efficient method of trade (when markets are open and free trade is prevalent). Points were created because they approximate renting. Exchange companies exist only because when timesharing was started, there was not a robust rental market for timeshares. If there were a robust vacation rentals by owner market in any form when timesharing was created in the 60's, exchange companies would have never been formed. Now that a robust rental market for timeshares is being created, timeshare exchange will become less and less relevant.

 

[BocaBum99]

Many of us don't really feel the need to "pick a side". I'm a member of RCI Weeks and have a deposit there. I also use DAE. Please don't try to fit me into one group or another as I am pro and con.

RCI is what it is, does what it does. I've had some great vacations. Doesn't make me a cheerleader.

I like that RCI has more resorts to choose from (were all to have weeks deposited for exchange) but I don't like their rental practices or constant fee increases. Doesn't make me a basher.

I completely agree with you. I subscribe to the Geekette philosophy of timesharing.

 

[BocaBum99]

I think this class action lawsuit was actually initiated by RCI itself as a PR campaign for Tuggers. RCI was smart and figured out that if they just put news out there that gave timesharers hope, that those same timesharers would believe that things have changed.

It's amazing how people will read something on a message board and then believe it to be true.

 

[jerseygirl]

Boca --

I think many timeshare owners would welcome the opportunity to deposit into RCI, choose the rental option, and receive 70-80% of the rental proceeds. What people object to is RCI's rental of weeks that do not belong to them.

Without a full and fair accounting of the following two practices, I will remain in the "where there's smoke, there's fire" camp:

(1) The practice of substituting comparable inventory for points partners transactions. I'm still dying to know which weeks were given up to justify the transfer of all those Maui Embassy weeks to Snap Travel. I'm willing to bet just about any amount that seasoned TUG members would strongly disagree with RCI's definition of comparable inventory in that little switcheroo.

(2) Defining surplus inventory. Let's say the Embassy Maui has a trade power score of 95. There are probably hundreds of requests for those weeks, but the people requesting them have units with a trade power of less than 95. If no one with a 95 is requesting the weeks, I think RCI calls them surplus inventory, rather than lowering the number to 90 ... then 85, etc. I have many units with varying degrees of trading power with II. I'm convinced that II does what an exchange company is supposed to do and gradually lowers the trading power. For example, I'll be able to see X with my Y week, but not with my Z week. A few weeks later, I'll be able to see X with my Z week too.. However, I have a strong suspicion that RCI doesn't lower the trading power. What else could explain the very desirable weeks we see on Snap Travel and other rental outlets? Perhaps they're all from (1), but I don't think so.

Bottom line -- the inventory is NOT RCI's to rent. It is deposited, in good faith, by members who believe it is being made available to other members -- no matter what the terms and conditions say.

I'm not an RCI member, but I'm ALWAYS in the little guy's corner. RCI's arrogance is unbelievable, and it's way past time for someone to hold them accountable. If an outside, independent auditor (not one paid by RCI) investigates this thoroughly and says everything is on the up and up, then I'll be the first one to stand up and apologize. But, in the meantime, I couldn't be happier about those 2 (at least) lawsuits.

- Jerseygirl

 

[Carolinian]

Here is where we start diverging in opinion. Rentals and exchanges are two birds of a feather. Both are methods of trading your week for something else of value.

More rentals are occurring because renting is a more efficient method of trading. And, markets always trend toward the most efficient method of trade (when markets are open and free trade is prevalent). Points were created because they approximate renting. Exchange companies exist only because when timesharing was started, there was not a robust rental market for timeshares. If there were a robust vacation rentals by owner market in any form when timesharing was created in the 60's, exchange companies would have never been formed. Now that a robust rental market for timeshares is being created, timeshare exchange will become less and less relevant.

There is not an owner-based rental market being created. There are a couple of big exchange companies flooding the market with rentals and driving prices down for owner rentals as well as making exchanges more difficult. Points cannot be said to approximate rentals when the values are rigged from onhigh by the exchange companies is a fashion that resembes a command economy. What we are seeing is cutthroat competition by the big exchange companies against 1) owners who rent their own weeks, 2) exchangers, and 3) resorts. This has the potential to drive all 3 groups out of the market, but dries up the supply for the exchange companies in the process.

Can you point to any independent rental market for timeshare that is comprehensive and handles significant volume? Hint: one contrived by an exchange company to skim exchange inventory doesn't count!