A hearing was held on June 16th at the Federal Courthouse in Newark, New Jersey. There were four attorneys representing each side.
Shep Altshluler, editor of Timesharing Today Magazine, spoke eloquently on behalf of timeshare owners re: complaints about difficulty obtaining fair exchanges, rental of timeshare weeks to the general public, lack of transparency and oversight of the methods used to determine trading value of deposited weeks, etc... He expressed dissatisfaction with many aspects of the proposed settlement. And he particularly emphasized the lack of proper notice to RCI members.
A very passionate, articulate, and well informed attorney, Susan B. Collins, came all the way from West Seneca, N.Y. (400 miles-she flew in and rented a car) to address these issues and concerns--not as an attorney but as a timeshare owner. Sadly, there were no other RCI members present except for Yours truly and spouse. I spoke for about 25 minutes.
The Judge seemed to be very fair. He is a dignified, calm gentleman who listened carefully to each speaker and asked excellent questions. The RCI attorneys were given ample time to respond and explain their positions. The judge made some remarks indicating skepticism about some of their well-rehearsed rhetoric.
The main purpose of this hearing was to determine if RCI members had received adequate notice of the proposed settlement so that they would have had an opportunity to send letters to the Court expressing their approval or objection to the terms. RCI proudly stated that 15,500 members had submitted the required form by the April 6th deadline requesting one of the token "peace offerings". The Judge said that he considered that to be a rather low response considering that there are 1,500,000 weeks members. And more than 15,500 should have stepped up to claim freebies worth up to $100. if they had known about it.
An RCI attorney went on an on about how notice was given to members through publication in the Endless Vacations Magazine.
Miss Collins handed the Judge a copy of the EV issue and challenged him to find the notice. While he was searching, someone blurted out that is was on page 94. The RCI attorney volunteered that it was also listed in the Table of Contents. Miss Collins pointed out that it was in print much smaller than the other topics listed and could be easily overlooked. She suggested that it should have been prominently displayed on the cover of the magazine. The Judge seemed to agree.
When the RCI attorneys stated that the RCI web site also contained a link to information of the proposed settlement, Miss Collins handed the judge over 100 pages of "legalese" that she had printed out from the link. She said that even though she is an attorney, it was a daunting task for her to read through it all and try to comprehend what was being proposed as the settlement. I later pointed out that many timeshare owners are older folks who are not computer literate and do not visit the RCI web site.
When the Judge asked if RCI had sent Email notices to members, the attorneys said that they only had Email addresses for less than 50% of the members. I later pointed out that they sure bother me enough with Emails trying to sell something. Yet I never received an Email about the settlement. The Judge asked point blank if they had sent Emails about the settlement to any of the members and they conceded that they had not.
One issue in which the Judge seemed to have a particular interest was why the proposed settlement changes would last for only two years. The RCI attorneys spoke in general terms about how their busines model requires flexibility to adjust to changing conditions in the world (e.g "911" and the economy and gas prices, etc...). Their vague answers didn't make much sense to me. I don't think the Judge bought it either.
The attorneys who brought the suit were asked the same question. They said that RCI had convinced them that it would take so much time and trouble and expense to make the changes that they felt certain RCI would then leave the changes in place indefinitely. I doubt that anyone in the courtroom believed that one. The Judge asked about it again and again and said that if changes are needed they should become permanent so as not to have more lawsuits brought after the 2 year period expired.
One other issue the Judge questioned was why so many members seem dissatisfied about the exchange process. The RCI attorneys blamed the developers for over-promising during the sales presentation. They kept saying that they have no control over what the salespeople say and do. They even had the nerve to say that they would be addressing that issue as part of the changes that would be implemented as a result of this settlement. (Yeah, right!). There is not a word about that in the settlement. The Judge asked how they would do it and they made vague statements about holding some training sessions.
When I spoke, I discussed the "incestuous relationship" between RCI and the resort developers and sales teams. I said that most people attend a presentation to obtain a free gift. They did not do prior research and did not plan to buy a timeshare. The main selling point is usually the promise that they will be able to exchange their week if they buy one. They are shown the RCI "wish book" and led to believe it will be easy to just pick up the phone and make a reservation anywhere in the world they want to go. Most are led to believe that the week they are being offered has great trading power, even if it is a mud week in an undesirable location. This would not happen if there was some way for them to obtain an objective valuation of the week and its exchange potential before buying it or within the recission period, which by the way, should be much longer.
I mentioned how Redweek.com assigns a point value to a week before you deposit it. You are able to look through their inventory of already deposited weeks and determine what you will be able to obtain as an exchange. And you can purchase additional points, if necessary, to obtain a desired week that has greater trading power than yours. Redweek does not remove any of these weeks and sell them elsewhere. (Of course I'm aware of other problems with their system but I was trying to keep things simple). I observed the Judge jot down Redweek on his notepad.
But honestly, if RCI did not exist and most people deposited with Redweek (or a similar company), AND Redweek did a better job of properly valuing the weeks, and did not become beholden to developers and resorts, I think it would provide a far better outcome than the way RCI now operates. Redweek would be satisfied making a reasonable profit running an honest business. I'm afraid RCI will never be satisfied. They will always try to come up with new ways to make more and more money, no matter what tactics they have to use, and no matter how unfair or dishonest it may be to their members. When will companies stop letting GREED be their driving force. Hasn't enough damage already been done to the economies all over the world?
Both sides were directed to submit briefs by 4:00 p.m. June 23rd re: the matter of sending first class mail notices to members of the class action lawsuit. Thereafter the Judge will render a decision. STAY TUNED!
