Unethical high pressure sales tactics [merged]

[Cindysue82]

Newbie here.

In a moment of pure desperation for something good in our lives, we went to a timeshare presentation at Lawrence Welk in San Diego for the free vacation promise only. Somehow, despite the fact that we had almost no money in our bank account, we got talked into purchasing a timeshare. I didn't even think it would be possible that we would qualify considering neither my husband nor I had good credit, we didn't have enough money to put down the deposit they required, and also we didn't even want a timeshare! At that time, I was very mentally unstable, shortly after this huge mistake, I started therapy and got put on antidepressants for anxiety and depression. So I was not in the best state of mind and unfortunately let myself be convinced over the 5 hour presentation that this was a good decision.

The part that gets me the most is how they pushed the purchase through. Because we didn't have the money for the deposit, they applied for a credit card with Quorum Federal Credit Union for me, so that the deposit could be payed for with this line of credit. And then, they set up the payments for the timeshare to be automatically withdrawn from this credit card. This just seems incredibly unethical to me....feels reminiscent of the sub-prime home loans that led to the housing bubble bursting and the 2007-2009 recession in the UNited States.

We couldn't even qualify for a $10,000 small business loan at that time, so how did we qualify to purchase a timeshare that cost $13,000, with no down payment?? I remember thinking, man this guy is gonna do whatever it takes to get this sale, and by the end of it, I felt bad that he had spent so much time with us, I felt like we owed it to him to follow through with the purchase!

That was in 2013, it is now 2016 and we haven't used a single day of our timeshare. Why? Because we can't afford it! We live on such a tight budget that we can't take time off. We have been on Medi-Cal health insurance for years because we are below the poverty line. Welk continues to put the timeshare payments on the Quorum credit card they so strategically provided for me, but we are only making the minimum payments on it and we haven't been able to pay our maintenance fees, so at this point I'm guessing we will be headed toward foreclosure.

If anyone can confirm that these practices were illegal, please respond. I am considering pursuing a class action lawsuit against the Welk Resort Group.

 

[lawduck]

Newbie here.

In a moment of pure desperation for something good in our lives, we went to a timeshare presentation at Lawrence Welk in San Diego for the free vacation promise only. Somehow, despite the fact that we had almost no money in our bank account, we got talked into purchasing a timeshare. I didn't even think it would be possible that we would qualify considering neither my husband nor I had good credit, we didn't have enough money to put down the deposit they required, and also we didn't even want a timeshare! At that time, I was very mentally unstable, shortly after this huge mistake, I started therapy and got put on antidepressants for anxiety and depression. So I was not in the best state of mind and unfortunately let myself be convinced over the 5 hour presentation that this was a good decision.

The part that gets me the most is how they pushed the purchase through. Because we didn't have the money for the deposit, they applied for a credit card with Quorum Federal Credit Union for me, so that the deposit could be payed for with this line of credit. And then, they set up the payments for the timeshare to be automatically withdrawn from this credit card. This just seems incredibly unethical to me....feels reminiscent of the sub-prime home loans that led to the housing bubble bursting and the 2007-2009 recession in the UNited States.

We couldn't even qualify for a $10,000 small business loan at that time, so how did we qualify to purchase a timeshare that cost $13,000, with no down payment?? I remember thinking, man this guy is gonna do whatever it takes to get this sale, and by the end of it, I felt bad that he had spent so much time with us, I felt like we owed it to him to follow through with the purchase!

That was in 2013, it is now 2016 and we haven't used a single day of our timeshare. Why? Because we can't afford it! We live on such a tight budget that we can't take time off. We have been on Medi-Cal health insurance for years because we are below the poverty line. Welk continues to put the timeshare payments on the Quorum credit card they so strategically provided for me, but we are only making the minimum payments on it and we haven't been able to pay our maintenance fees, so at this point I'm guessing we will be headed toward foreclosure.

If anyone can confirm that these practices were illegal, please respond. I am considering pursuing a class action lawsuit against the Welk Resort Group.

Not sure why you think it's illegal. What was the illegal practice? caveat emptor

Just because you think you bought something you can't afford doesn't make it illegal. The law doesn't, and shouldn't, protect one from their own bad decisions.

You are paying for this timeshare and should find a way to go use it.

(no legal advice contained in this message)

 

[dioxide45]

Welcome to Tug

Unethical, yes. Illegal, probably not. They are not likely to foreclose until the unit is paid in full. Which in your case will be a while. It would seem that under new lending laws, timeshare companies should be forced to verify the borrowers ability to repay the loan based on income and credit rating. I don't think the same laws apply to timeshare loans as they do for residential mortgage. In your case, they just applied you for a credit card to buy the timeshare. So no mortgage involved.

In the case of timeshares, there is very rarely any kind of credit score run and everyone qualifies. If they have to foreclose, they just resell the week to someone else for a hefty profit.

If you could somehow pay off the credit card and cancel or close it. Is it also possible to close it to new purchases? That would force the timeshare company to come after you for payment, then you just let them foreclose. You don't have a credit score to protect.

 

[TUGBrian]

very sorry every time I read a story like this (and there are lots of them)

the problem comes into play with a lawsuit because unless you have a recording of the presentation (wow, 5 hours?)...it would just come down to a "your word vs the salespersons"

believe me, there is a special place in hell for scumbag salespersons, and we wish more people would report these issues and out these salespersons by name...I wish we had better news for you than what was posted above...but as in your case, its been quite a long time since the original purchase, and id bet that particular salesman has moved on (its an extremely high turnover job)....and welk resorts would likely just apologize that you had such an issue simply excuse themselves explaining he is no longer with the company etc.

have you written a letter to welk resorts explaining all of this in detail? perhaps they would provide some assistance as you mention you are already delinquent in the payments and headed to foreclosure...it'd probably even be cheaper for them for you to surrender it willingly.

 

[Talent312]

It's not illegal for slick-talking salespeep to talk gullible marks into buying things they can't afford. They have no duty to act in your interest. Quite the opposite. They act in their own interest.

In your situation, there are 3 ways to get this monkey off your back:
1. Try to get Welk Resorts to take it back "inl ieu of foreclosure;"
2. File Bankruptcy (that costs $$) so you'll no longer be liable for it;
3. Stop making payments and suffer a foreclosure.

They'll threaten to take assets or garnish wages. Don't worry about that.
Either they won't or can't - and it they try, you're prolly 'judgment proof.'
.

 

[LannyPC]

Additional warning

Now that you've made your plight and story public on a forum like this, you might start getting calls and e-mails from various outfits claiming they can work wonders for you such as suing the resort/TS company/salesperson(s), getting your money back, cancelling your TS and its mortgage, etc. Or you might be tempted to Google various companies like this.

We usually warn people in situations like yours to avoid such companies because they will charge a hefty, upfront fee (usually in the thousands) and likely not accomplish what you paid them to do.

Follow some of the advice you've been given in some of the above responses.

 

[ronparise]

I dont know whether or not its illegal to make a loan to an unqualified borrower, it should be, but as has been said here its probably not

But neither is it illegal to not pay a loan back

There are consequences, no doubt spelled out in that pile pf papers you signed, but we havent had a debtors prison in the US for a long time. so I wouldnt worry about that

I would contact the credit card company...(the credit union) and de-authorize the auto pay plan or just cancel the account. and then try to negotiate a deed back, and loan forgiveness.

There is a lawyer with experience with timeshare issues, I know that might do that class action you are talking about, or at least take your individual case, but Tug officials believe he is just out to take your money too, so I wont name any names. It doesnt really matter, you can do for yourself, what he would do, (not the class action) ie contact your creditors, and make your case that you cant pay these loans

The problem is that as long as you are making payments you are showing them that you can make the payments... As I suggested above, Id stop paying. There will be consequences but I cant imagine those consequences are any worse than what you are living with now

I had a bankruptcy lawyer tell me once that as embarrassing as a bankruptcy is and as difficult as it is, the relief that you feel on the other side makes it all worthwhile. Id explore that option as well.... but of course they want to be paid up front (usually after a free consultation) and folks here on Tug will tell you that anyone that wants to be paid up front is by definition a scam artist... so be careful

Good Luck... just know that there is life after you get through this thing... Im proof of it

 

[RLS50]

Ironically, high pressure or not, it can be argued the entire timeshare sales industry is unethical. They are selling a product that is essentially worth maybe 5% to 10% of their selling price. They try to carefully find, prescreen, and select people with little knowledge of the timeshare market and actual timeshare values.

If effect they are trolling for inexperienced suckers. It is predatory, unethical, and immoral.

 

[theo]

Suspending disbelief...

Ironically, high pressure or not, it can be argued the entire timeshare sales industry is unethical. They are selling a product that is essentially worth maybe 5% to 10% of their selling price. They try to carefully find, prescreen, and select people with little knowledge of the timeshare market and actual timeshare values.

If effect they are trolling for inexperienced suckers. It is predatory, unethical, and immoral.

I agree with you wholeheartedly on all stated points. Unfortunately, the one thing their slimy, deceitful and manipulative practices are not is illegal.

It troubles me a bit that people are sometimes willing to believe that attorneys are magicians who can somehow extricate them from the contractual obligations arising from their unfortunate (but entirely voluntary) bad choices and decisions. It just ain't so, whether it's via class action lawsuit or by individual legal representation.
Remorseful buyers may not choose to believe that predatory, parasitic developers have and use capable (and well-compensated) attorneys of their own --- but they do.

OP: I am not going to offer you any legal advice, nor any input that is intended in any way as a substitute for consulting licensed legal counsel in your own state.
However, that being said, if you are in truly dire straights financially (obtaining legal counsel notwithstanding), you might at least consider cancelling that credit card and at least putting the brakes on your mounting debt for a non-essential item you don't use and won't be using. Yes, allowing foreclosure will surely create a credit report "ding" for you, but from my uninformed distance it seems like you're currently just digging your financial hole a little deeper with each subsequent monthly credit card charge and (minimum) bill payment. Interest on that card's growing unpaid balance will just keep mounting. Give serious consideration to at least stopping the bleeding of monthly credit card charges for a discretionary, luxury item that you're not using, won't be using --- and plainly just cannot afford. You don't need an attorney to simply ask Welk if they will accept "deed in lieu of foreclosure". You can ask that question for yourself --- today. If you make the request, do so in writing, not by phone.
Just continuing to do what you have been doing for the past 3 years since the initial 2013 purchase and are still doing at present is certainly not your best option.

I hope things turn around for you. Good luck.

 

[ronparise]

removed my comment, on second read, its probably bad advice

 

[MSchleicher]

This situation is unfortunate. However, I highly doubt that you would be able to claim that the sale was illegal. Although you may not have qualified for a small business loan, it doesn't mean you were an unqualified borrower. Banks have been under a lot of pressure in regards to small business loans because so many small businesses fail. There are many up-and-coming entrepreneurs that would qualify for mortgages and car loans greater than the amount of a denied small business loan inquiry.

It appears that you have two options:
a) Try to find a way to get out of the loan and ability to use the timeshare (e.g. foreclosure, bankruptcy, etc.). However, many of those decisions can lead to a lengthy and burdensome course of action.

b) Find a source of funds to pay off the credit card. Although it isn't ideal, you may want to consider using money from your retirement accounts to pay for the credit card.

You need to decide what action you want to take. Nobody here can tell you what you should do. Not to sound harsh, but you were the one that signed the paperwork purchasing the timeshare and authorizing the credit card to be in your name.

 

[ronparise]

removed,,,,

 

[TUGBrian]

pretty sure its been mentioned more than once (including in the post right above yours) that they are most welcome to discontinue paying their bills using a variety of options if they so choose...there are upsides and downsides to both.

everyone here is an adult...and should know there are possible negative consequences to both making bad decisions...and not paying bills.

 

[e.bram]

See if you can find a local law school legal clinic to help you. Claim fraud in the inducement and ask for a jury trial. OJ got off so maybe you can too with the proper jury.

 

[ronparise]

pretty sure its been mentioned more than once (including in the post right above yours) that they are most welcome to discontinue paying their bills using a variety of options if they so choose...there are upsides and downsides to both.

everyone here is an adult...and should know there are possible negative consequences to both making bad decisions...and not paying bills.

Sorry Brian, I was responding to these comments found in this thread

"The law doesn't, and shouldn't, protect one from their own bad decisions."

"it would just come down to a "your word vs the salespersons"

"gullible marks "

"inexperienced suckers"

"contractual obligations arising from their unfortunate (but entirely voluntary) choices and bad decisions"

"Not to sound harsh, but you were the one that signed the paperwork purchasing the timeshare and authorizing the credit card to be in your name"




I did probably go too far with my comment, there is plenty of good advice here. its just that for me its overshadowed by the harsh criticism directed at the op

Ill remove my comment and wont offer my advice again on this subject

 

[TUGBrian]

we clearly share a different interpretation between "harsh criticism" and "reality"

im pretty sure everyone wishes there were a better answer to this question as we get it alot.

 

[VegasBella]

If I were you I would ...

...say goodbye to good credit (you probably don't have good credit right now anyway if what you say above is true - even if you're always paying the min your debt to income ratio is not good)

...cancel the credit card (it probably has a horrendous interest rate and since you're only making min payments you're just getting deeper into debt via interest)

...focus on paying off only the loans you've taken out on a home and car
do a homestead if you need to protect your home from creditors
consult a bankruptcy attorney if you have significant assets to protect

...negotiate and make a payment plan - in writing - with creditors you want to pay off if you want to avoid bankruptcy (example, if you can and want to pay off the credit card then make a plan for how to do that - negotiate that interest down, you can do it but it's going to take time and patience and work)

...at the very least I would login to my Welk account and change the payment option to pay by check
This way if you want to stop paying just that one you can do so very easily. And if you want to keep paying it then you can do that too without paying the interest with the credit card.

...and try to rent out the vacations you can't use so at least you can recoup some of the money (just do the free options, don't pour more money into this)

Just my opinion

 

[clifffaith]

I'll give you harsh -- I read this yesterday right after it was posted, then had Cliff read it, and we both thought it was written by a lawyer trying to drum up business.

 

[ronparise]

I'll give you harsh -- I read this yesterday right after it was posted, then had Cliff read it, and we both thought it was written by a lawyer trying to drum up business.

That may be..

I know Im pretty naive, I tend to believe what ever anyone tells me until its too late... I took it at face value

 

[ronparise]

we clearly share a different interpretation between "harsh criticism" and "reality"

im pretty sure everyone wishes there were a better answer to this question as we get it alot.

yea, me too

 

[VacationForever]

I'll give you harsh -- I read this yesterday right after it was posted, then had Cliff read it, and we both thought it was written by a lawyer trying to drum up business.

Those have been my thoughts and hence I have not posted until now to agree...

 

[Cindysue82]

Hi thank you all for your replies. I figured it wasn't illegal, although maybe it should be.

And yes, I am considering closing the credit card in order to stop payments. It's very unfortunate all the way around. And yes, I am VERY aware of the mistake made by myself. It is literally the stupidest thing I have ever done.

I would be happy to sell it of course, but that seems to be an ordeal in itself. Obviously, I can't afford upfront fees for websites, lawyers, etc.

I will look into seeing what Welk is willing to do to negotiate a foreclosure.

 

[RLS50]

Hi thank you all for your replies. I figured it wasn't illegal, although maybe it should be.

And yes, I am considering maxing out the credit card in order to stop payments. It's very unfortunate all the way around.

I would be happy to sell it of course, but that seems to be an ordeal in itself.

I don't know your personal situation, but outside of your disgust with the company that sold you a bill of goods...can you use it? Like at all? I mean if you plan on going on vacation next year, could you use what you now own?

Regardless of that, if you can prove that you were on medication before signing for a timeshare and maybe even seeing a doctor, you might have a case for diminished capacity?

Anyway wish you the best, seriously.

 

[Passepartout]

Cindysue82
The sad truth is that Welk probably won't entertain cancelling your contract, because, well, it's current. They couldn't care less whether or not your 24% credit card bills are burying you alive. They are getting theirs.

You need to change the payment method on the account to 'Pay By Check', then don't pay. Let it go to default, then collection. Unfortunately, you will still owe what you have charged to the credit card unless and until you either pay it off, or are relieved of it through bankruptcy- and that is extremely difficult these days.

We are sorry that you made the decision to sink your finances- obviously with (mis)guidance from greedy, unfeeling salesweasels. They should be ashamed, but probably aren't.

Jim

 

[MSchleicher]

Cindysue82
The sad truth is that Welk probably won't entertain cancelling your contract, because, well, it's current. They couldn't care less whether or not your 24% credit card bills are burying you alive. They are getting theirs.

You need to change the payment method on the account to 'Pay By Check', then don't pay. Let it go to default, then collection. Unfortunately, you will still owe what you have charged to the credit card unless and until you either pay it off, or are relieved of it through bankruptcy- and that is extremely difficult these days.

We are sorry that you made the decision to sink your finances- obviously with (mis)guidance from greedy, unfeeling salesweasels. They should be ashamed, but probably aren't.

Jim

In addition to Jim's suggestion, I would highly suggest trying to rent out 2016 or 2017 usage if it has already been paid.