UPDATE: RCI CLASS ACTION LAWSUIT - must read for all RCI members [Includes Results]

[bnoble]

only a fool or an idiot would ever sign a mortgage agreement, especially if s/he is a teacher who works only 10 months a year, or a seasonal employee.

Well, as a university professor on a 9-month appointment, my university helpfully pays me over 12 months (to my benefit, as it happens, because our fiscal year runs from July to June, so I get paid two months "early" vs. one month "late"). So, I am not troubled with the burden of having to plan for an irregular income stream.

Even so, if your income stream is not reliable, then you are either foolish or stupid to sign a mortgage without maintaining a cushion that you can draw upon in those months when you do not earn sufficiently to cover your obligations. That the bank does not foreclose after 45 days is only a matter of profit for the bank---foreclosures are generally less profitable than a cutomer who falls behind once in a while, but makes it up later.

So, to sum up, would I prefer it if RCI never rented out deposits? Yes.

Am I surprised that they do? No.

Do I believe the membership agreement, going back to at least 1991, gives them the legal right to do it? Yes.

On the last point, my opinion is immaterial, as I am not the judge in the case.

On the first point, I'm not as certain as I once was. For example, I'm interested in several of those city-center Hyatt hotels that have been popping up in locations without many timeshare alternatives. Those had to come from somewhere. They certainly weren't deposited by some individual timeshare owner, and I doubt that Hyatt gave them to RCI just to be nice. Somehow, RCI has to compensate Hyatt for those units that are taken via exchange---the easiest way I can think of is to rent out some units deposited for exchange in return.

I still get the sense that some of you believe that RCI owes it to us to forgo profit to improve our personal exchange fortunes. I'm under no such illusions. Like any company, RCI's only obligation is to its shareholders. While they can satisfy their shareholders and still deliver value to me, I will continue to pay them for their services. When they can no longer deliver value to me, I will stop using them. It's really that simple.

I've probably said it before in this thread, but my relationship with RCI is not personal. It is strictly business.

-brian, Defender Of Evil.

 

["Roger"]

.. While there had been some creep higher in revenue per rental, it has come down significantly since Q3 2008....

One clarification here. Rentals mean one thing here on TUG, another in Wyndham financial statements.

The primary source of rental income in Group RCI appears to be a group of branded rental companies in Europe that rent things like spaces at motor home parks, cottages, etc.

If, for example, you look at their December investor presentation (via the Wyndham Worldwide site), the comment on rental income is that they hope to expand their branded European rental properties and establish a corresponding set of set of rental properties in the US. (Nothing is said in their report to investors about their prospects for renting what had been timeshare weeks.) In quarterly reports, the figures on rental income is almost always qualified with a statement as to what the current rate of exchange for the US dollar is. (The idea here is what they report as rental income is largely affected by the rate of exchange since the rental income mainly comes from the branded European companies.)

I suspect that the income from renting what had been timeshare weeks and developer weeks is also thrown into the rental income figures, but it is not something that one can factor out from what is reported in their financial statements. (Reading Wyndham financial reports can be a bit like trying to decipher writings on walls in Beijing as to the current political winds in China.)

 

[krj9999]

Roger, good clarification. Below is from the footnotes today:

Vacation Rental Transactions: Represents the number of transactions that are generated in connection with customers booking their vacation rental stays through us. In our European vacation rentals businesses, one rental transaction is recorded each time a standard one-week rental is booked; however, in the United States, one rental transaction is recorded each time a vacation rental stay is booked, regardless of whether it is less than or more than one week.

One clarification here. Rentals mean one thing here on TUG, another in Wyndham financial statements.

The primary source of rental income in Group RCI appears to be a group of branded rental companies in Europe that rent things like spaces at motor home parks, cottages, etc.

If, for example, you look at their December investor presentation (via the Wyndham Worldwide site), the comment on rental income is that they hope to expand their branded European rental properties and establish a corresponding set of set of rental properties in the US. (Nothing is said in their report to investors about their prospects for renting what had been timeshare weeks.) In quarterly reports, the figures on rental income is almost always qualified with a statement as to what the current rate of exchange for the US dollar is. (The idea here is what they report as rental income is largely affected by the rate of exchange since the rental income mainly comes from the branded European companies.)

I suspect that the income from renting what had been timeshare weeks and developer weeks is also thrown into the rental income figures, but it is not something that one can factor out from what is reported in their financial statements. (Reading Wyndham financial reports can be a bit like trying to decipher writings on walls in Beijing as to the current political winds in China.)

 

[Egret1986]

I get that feeling very stongly from some posters here on TUG

I still get the sense that some of you believe that RCI owes it to us to forgo profit to improve our personal exchange fortunes. I'm under no such illusions. Like any company, RCI's only obligation is to its shareholders. While they can satisfy their shareholders and still deliver value to me, I will continue to pay them for their services. When they can no longer deliver value to me, I will stop using them. It's really that simple.

I've probably said it before in this thread, but my relationship with RCI is not personal. It is strictly business.

-brian, Defender Of Evil.

It IS very simple.

Even if you said it before in this thread, maybe it bears repeating.

Don't take it personally, folks!!! If it doesn't work for you anymore, you have the right to cease being a member. It's your choice.

 

[Egret1986]

While I don't believe "RCI can do no wrong", I'm sure I'm considered part of the lump

. . . it doesn't take much more than that to get lumped in with the RCI Can Do No Wrong crowd.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

RCI continues to work for me. It has for 25 years! When it no longer works, then I will move on, instead of trying to strong arm this big conglomorate. I believe choosing to continue or discontinue membership is the only real control one has over RCI and its practices.

 

[AwayWeGo]

Same Here.

While I don't believe "RCI can do no wrong", I'm sure I'm considered part of the lump

I got lumped in just for citing the user agreement language which says, in essence, that RCI can do anything it wants with deposited timeshare weeks.

So it goes.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[Susan2]

Attorney Disclaimer Ordered by the United States District Court:

I am an attorney who was admitted to represent some of the objectors in a class action pending in the United States District Court for the District of New Jersey. Any statements by an attorney, including myself, should be considered to be the personal opinion of the attorney and are not approved by the Court. As such, my statements contained herein are not approved by the Court. More information is available at www.weeksprogramsettlement.com, the Court-approved website.

-----------------------------------------------------------------------------------------------------

I still get the sense that some of you believe that RCI owes it to us to forgo profit to improve our personal exchange fortunes. I'm under no such illusions. Like any company, RCI's only obligation is to its shareholders.

"Forego profits?" Is that what you call it? I have a different term for it.

If RCI owned the timeshares they rent or otherwise transfer, I would absolutely agree that they had the right to dispose of them in whatever manner they choose. After all, people have the right to profit from property they own.

But when property is entrusted to an entity for a particular purpose, and the entity uses it for a purpose not contemplated by the owner of that property, nor specifically agreed to by the owner of the property (and in this situation most often not even known about by the owner) it is called "conversion," NOT "legitimate corporate profit." The excuse that "we make more money this way" just doesn't cut it!

We have multitudinous examples of this sort of corporate "profit" today, and some is being criminally prosecuted. Much of the rest should be.

I posit that if RCI truly believes that this practice is legitimate, THEY WOULD ADMIT TO THE GENERAL MEMBERSHIP, AS WELL AS TO THEIR OWN EMPLOYEES. The fact that they continue to deny it to members who ask, means that they feel they need to hide it.

WHAT DOES THAT TELL YOU?

 

[Carolinian]

RCI continues to work for me. It has for 25 years! When it no longer works, then I will move on, instead of trying to strong arm this big conglomorate. I believe choosing to continue or discontinue membership is the only real control one has over RCI and its practices.

You are burying your head in the sand, and pretending the problem will go away. RCI's slimy activities in embezzling our exchange deposits to rent out for their own profit is also impacting the financial health of our resorts. This issue is a lot bigger than us personlly. What we need to do is be pro-active and get our resorts actively involved in migrating as much of their exchanger membership base as possible to other exchange outlets.

The Big Boys can be turned around with the right consumer pressure. The self-styled ''cockroaches did it with US Airways in a couple of weeks. Delta passengers did it with www.saveskymiles.com although that was a three year slog. Yes, there were naysayers like the RCI happies on this board who blasted those who tried to do something in those cases, constantly saying the airlines were too powerful and nothing could be done on FlyerTalk. From the activists continued onward and ultimately backed down the big companies.

 

[Carolinian]

In a consumer protection lawsuit, the issue is not what is buried in the fine print of a membership agreement that RCI changes at will without notifying members. The standard is simple, are their acts and practices ''unfair'' oir ''deceptive''. Both are very broad concepts. When other statements from RCI that are much more visible to members than that buried language in the fine print, you have a classic case of deception. Of course the whole rotten scheme is patently unfair.

The fine print is not an ironclad defense for RCI. On the contrary, it can be part of the proof of their wrongdoing.

Well, as a university professor on a 9-month appointment, my university helpfully pays me over 12 months (to my benefit, as it happens, because our fiscal year runs from July to June, so I get paid two months "early" vs. one month "late"). So, I am not troubled with the burden of having to plan for an irregular income stream.

Even so, if your income stream is not reliable, then you are either foolish or stupid to sign a mortgage without maintaining a cushion that you can draw upon in those months when you do not earn sufficiently to cover your obligations. That the bank does not foreclose after 45 days is only a matter of profit for the bank---foreclosures are generally less profitable than a cutomer who falls behind once in a while, but makes it up later.

So, to sum up, would I prefer it if RCI never rented out deposits? Yes.

Am I surprised that they do? No.

Do I believe the membership agreement, going back to at least 1991, gives them the legal right to do it? Yes.

On the last point, my opinion is immaterial, as I am not the judge in the case.

On the first point, I'm not as certain as I once was. For example, I'm interested in several of those city-center Hyatt hotels that have been popping up in locations without many timeshare alternatives. Those had to come from somewhere. They certainly weren't deposited by some individual timeshare owner, and I doubt that Hyatt gave them to RCI just to be nice. Somehow, RCI has to compensate Hyatt for those units that are taken via exchange---the easiest way I can think of is to rent out some units deposited for exchange in return.

I still get the sense that some of you believe that RCI owes it to us to forgo profit to improve our personal exchange fortunes. I'm under no such illusions. Like any company, RCI's only obligation is to its shareholders. While they can satisfy their shareholders and still deliver value to me, I will continue to pay them for their services. When they can no longer deliver value to me, I will stop using them. It's really that simple.

I've probably said it before in this thread, but my relationship with RCI is not personal. It is strictly business.

-brian, Defender Of Evil.

 

[Carolinian]

ANd not only is that contract of adhesion not enforcible, but the fact that RCI projects a contrary line to its members means that langugage is actually part of the proof to sink RCI in this lawsuit.

Companies cannot just put anything they want in the T&C and have them enforcible. The standard in comsumer protection laws is where their acts or practices, including that language as well as other things is ''unfair'' or ''deceptive'', then they become ''unlawful''.

I got lumped in just for citing the user agreement language which says, in essence, that RCI can do anything it wants with deposited timeshare weeks.

So it goes.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[ecwinch]

Not defending RCI here, but am posting latest data from Wyndham's quarterly results. The only things I can read from the data are: RCI membership continues to grow; rental volume is fairly flat; and exchange dues/fees per member is slowly declining. While there had been some creep higher in revenue per rental, it has come down significantly since Q3 2008.

Vacation
Exchange
and Rentals
Average Number
of Members
(in 000s)
2009 3,789 3,795 N/A N/A N/A
2008 3,632 3,682 3,673 3,693 3,670
2007 3,474 3,506 3,538 3,588 3,526
2006 3,292 3,327 3,374 3,429 3,356

Annual Dues
and Exchange
Revenue Per
Member
2009 $134.38 $117.59 N/A N/A N/A
2008 $150.84 $128.91 $124.51 $109.56 $128.37
2007 $155.60 $132.33 $131.38 $124.59 $135.85
2006 $152.10 $130.37 $132.31 $128.13 $135.62

Vacation
Rental
Transactions
(in 000s)
2009 387 324 N/A N/A N/A
2008 387 319 360 282 1,347
2007 398 326 360 293 1,376
2006 385 310 356 293 1,344

Average Net
Price Per
Vacation
Rental
2009 $335.54 $422.00 N/A N/A N/A
2008 $412.74 $477.63 $553.69 $400.09 $463.10
2007 $349.73 $415.71 $506.78 $426.93 $422.83
2006 $312.51 $374.91 $442.75 $356.16 $370.93

Not clear on what the column headings are - is it unit size or region?

ie. for Vacation
Rental
Transactions
(in 000s)

2008 387 319 360 282 1,347

387 = equals what column - same for 319,360,282
1347 = equals the annual total (?)

 

[Jennie]

I believe choosing to continue or discontinue membership is the only real control one has over RCI and its practices.

One of the benefits of this lawsuit is that RCI will be required to acknowledge that they rent out some of the weeks members deposit into the exchange "pool'. You'd be amazed at how many RCI members, to this day, have no idea this is occurring.

As I mentioned earlier, when a member of a large timeshare owners group I belonged to in New York, made this information known at a meeting in 2000 by distributing an enlarged copy of the RCI "Terms and Conditions" stating that they had the "right" to do so, almost every person in the room was shocked and appalled. Many of them dropped out of RCI as a direct result of this "revelation" and they have not returned.

For several years I was able to get multiple prime Febraury weeks in southeast Florida for about $250.-$300. through SkyAuction.com. These were not last minute cancellations. I was winning the auctions in April and May of the year before. At no time would they have been declared "excess inventory, not likely to be wanted by RCI members". When I won the auctions, I would receive confirmations that looked identical to an RCI confirmation, complete with the RCI logo. Meanwhile I was unable to obtain any of these weeks through RCI, despite ongoing searches beginning two years out, using weeks that had great trading power. So of course I stopped using RCI except for two "junk" weeks that I bought "way back when" before I knew anything about timeshares.

People have the right to know what is going on. People who pay an annual fee to be a member of a program/club/etc... expect that they will receive benefits that are not available to non-members. If they find out otherwise, then it's up to them to decide whether to continue to be a paid member, or to drop out and maybe continue to receive the benefits at an even lower price and not have to pay any member fees.

"Knowledge is power."

 

[Jennie]

[QUOTE by bnoble: I still get the sense that some of you believe that RCI owes it to us to forgo profit to improve our personal exchange fortunes. .QUOTE]

No, RCI, like most companies, should make a profit on goods and services they supply to a consumer. By accepting annual membership fees to provide an exchange of timeshare weeks for their paid members, and then taking a week that a member is waiting for, and selling it to a non-member to make a few extra dollars, that's where I have a big problem.

 

[krj9999]

Sorry, column headings after the year are

Q1 Q2 Q3 Q4 and Entire Year

Not clear on what the column headings are - is it unit size or region?

ie. for Vacation
Rental
Transactions
(in 000s)

2008 387 319 360 282 1,347

387 = equals what column - same for 319,360,282
1347 = equals the annual total (?)

 

[bnoble]

The fact that they continue to deny it to members who ask, means that they feel they need to hide it.

The simpler explanation is that the VCs simply don't understand how the company works. Remember---these are people who get paid minimum wage (and if they work outside the US, probaly less). They can barely confirm exchanges correctly.

Maybe I'm unusual, but I was aware that RCI *and* II rented vacation weeks to the public through various channels before I ever considered buying a timeshare, let alone exchanging one. It's not that hard to figure out---the fact that both companies advertise getaways without the need to exchange, that would be your first clue.

 

[Simoncc]

The simpler explanation is that the VCs simply don't understand how the company works. Remember---these are people who get paid minimum wage (and if they work outside the US, probaly less). They can barely confirm exchanges correctly.

Maybe I'm unusual, but I was aware that RCI *and* II rented vacation weeks to the public through various channels before I ever considered buying a timeshare, let alone exchanging one. It's not that hard to figure out---the fact that both companies advertise getaways without the need to exchange, that would be your first clue.

Firstly, I'd say everyone on this site has much more knowledge than the average timeshare owner - and the fact that you were aware of the rental practices before you even bought makes you even more special .

Whether the VC's give out false information through ignorance or an evil managerial masterplan is irrelevant - RCI members are being lied to and in no circumstances can that be acceptable/legal business practice.

As has been stated above most (I'd say nearly all) members join RCI in the belief that it is purely an exchange company - none of the RCI glossy brochures or magazines contradict this. Can anyone highlight an article written by RCI to the members about their rental practices? No? Well that to me confirms that the stroy they put to members differs from the reality.

 

[rickandcindy23]

Twenty-five years ago, when we joined RCI, there was no rental program, at least not that anyone knew about. How could they implement such a program, with no internet?

I am aghast at my recent drop in trading power, and RCI doesn't have any right to drop the trading power on weeks that were already deposited, but that does help their rental program, doesn't it? Taking our business elsewhere is essentially the only way we can "get even" with RCI. And that is exactly what I intend to do.

 

[thheath]

Twenty-five years ago, when we joined RCI, there was no rental program, at least not that anyone knew about. How could they implement such a program, with no internet?

RCI started the Armed Forces Vacation Club (rentals) in 1999, this is from their website: http://www.afvclub.com

The Armed Forces Vacation Club (AFVC) is a "Space Available" program that offers Department of Defense affiliated personnel the opportunity to take affordable condominium vacations at resorts around the world for only $329* per unit per week. The AFVC makes this possible by utilizing "excess" inventory at condominium timeshare resorts. "Excess" inventory consists of condominium units that resort owners do not use, which generally means off-season or short-notice travel. If you enjoy off-season activities in popular locations without the hassle of high-season prices, crowds and lines or if you can travel on 10 days notice or less, the AFVC offers an incredible vacation value.

To determine the appeal and demand for off-season vacation travel, the AFVC began as a limited test in the Military District - Washington area - in January 1999. Eligibility was restricted to military ID card holders, only a handful of installations participated and there were just a few resorts available, all within driving distance. The program proved so popular, that it was rolled out to all CONUS on 1 August 1999 and introduced to Europe on 1 November 1999. On 1 January 2000, the AFVC went global and extended eligibility to anyone (over the age of 21) affiliated with the DoD; all seven Uniformed Services, active duty or retired (medical or regular), reserves, and National Guard (see Policies and Procedures for full eligibility details).

 

[melschey]

The simpler explanation is that the VCs simply don't understand how the company works. Remember---these are people who get paid minimum wage (and if they work outside the US, probaly less). They can barely confirm exchanges correctly.

Maybe I'm unusual, but I was aware that RCI *and* II rented vacation weeks to the public through various channels before I ever considered buying a timeshare, let alone exchanging one. It's not that hard to figure out---the fact that both companies advertise getaways without the need to exchange, that would be your first clue.

When we joined RCI in pre-Cendant days RCI did not rent to the general public. They did rent to RCI members and to become a RCI member you had to own a Timeshare. That time the main purpose of RCI was to facilitate exchanges between members. Cendant changed that and IMO RCI now stands for Rental Condominiums International.

I agree it is common knowledge that RCI rents to the general public and suggest that people that don’t like that just don’t deposit anything of value with RCI. We are RCI members and would never even consider giving a valuable week to RCI. It is obvious that RCI’s rental policy is OK with many people as they still do a lot of business. That OK with me. Whether or not to do business with RCI is a personal choice.

 

["Roger"]

[Don't make assumptions about how I feel about this. Just adding info from what I have seen.]

Way back in the late '80's or early '90's I remember reading a Consummers Report article about timesharing. They disrecommended it because the best weeks were rented and really were not available. (This does not mean that RCI itself was renting them at the time. I honestly don't remember who they said was.)

When I joined TUG, there were regular threads about how RCI was making weeks available via Dinners Club, Mall Perks, and various other programs at prices below maintenence fees. Not long afterwards they started a program in which anyone could get a week by bidding on the internet. While many TUGGERS were outraged because of the ridiculous prices that units were going for, others were bragging how they got weeks for prices like seven dollars. (I suspect that RCI dropped this program when they saw how little they were getting for the units.)

I also believe that Craig Urbane said II could not survive without renting.

Has renting expanded? I presume so, but there are also a lot more timeshares out there now. When I started, RCI membership was well below two million. Also, the developer promotions that used to fill the RCI magazine ["Five days and four nights at *** for only $199"] have all but disappeared. I presume that these units are not being rented (via RCI among others).

 

[Jennie]

[QUOTE=" When I joined TUG, there were regular threads about how RCI was making weeks available via Diners Club, Mall Perks, and various other programs at prices below maintenence fees...[/QUOTE]
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But those weeks were mainly at low demand resorts during off-season. I know because I followed it closely, helping newly retired relatives obtain some weeks to satisfy their wanderlust. The weeks were usually listed in RCI's "Last Call" inventory for several days or weeks before becoming available through the general public venues.

After a large outcry from RCI members, they stopped the public programs. Whether it was a result of the complaints from RCI members, or the unprofitabilty, is unknown.

 

[e.bram]

A look at the TUG pole shows that II has more TUGGERS as members even though RCI is amuch larger operation.

 

[Carolinian]

But that simplistic explanation is just wrong. A number of RCI VC's have posted here and on other t/s boards, and they are certainly aware of the rentals to the general public and also thorught it was wrong and was screwing members. Bootleg on this site was one of them.

Read what this RCI VC has to say:

www.timesharetalk.co.uk/forum/topic.asp?TOPIC_ID=7761

The simpler explanation is that the VCs simply don't understand how the company works. Remember---these are people who get paid minimum wage (and if they work outside the US, probaly less). They can barely confirm exchanges correctly.

Maybe I'm unusual, but I was aware that RCI *and* II rented vacation weeks to the public through various channels before I ever considered buying a timeshare, let alone exchanging one. It's not that hard to figure out---the fact that both companies advertise getaways without the need to exchange, that would be your first clue.

 

[ecwinch]

But that simplistic explanation is just wrong. A number of RCI VC's have posted here and on other t/s boards, and they are certainly aware of the rentals to the general public and also thorught it was wrong and was screwing members. Bootleg on this site was one of them.

Read what this RCI VC has to say:

www.timesharetalk.co.uk/forum/topic.asp?TOPIC_ID=7761

Do you take that as a credible source?

Show up, has all kinds of inside information. Has proof, but cannot share it. Worried about getting exposed, so cannot visit TUG or TSTODAY. When asked for specifics, gives vague answers. Does not provide a lot of specifics, and then *POOF* disappears.

 

[Carolinian]

Do you take that as a credible source?

Show up, has all kinds of inside information. Has proof, but cannot share it. Worried about getting exposed, so cannot visit TUG or TSTODAY. When asked for specifics, gives vague answers. Does not provide a lot of specifics, and then *POOF* disappears.

When Anon first started posting, the owner of the site verified his bonafides by asking a series of specific questions about his own RCI account that only someone with access to RCI's computers could possibly answer correctly. Anon came back with all of the right answers. He is who is says he is.

Then there is longtime TUG poster Bootleg, who also disappeared not too long after the class action was filed, and likely during an RCI witchhunt. Bootleg undoubtedly worked for RCI and helped quite a few Tuggers with issues. He also confirmed that he could see prime weeks on RCI computers that were deposited for exchange but put immediately into the rental pool instead.

I would bet on both Bootleg and Anon being the genuine article. There are some other posters who indicate they work for RCI who have posted similar things, but their bonafides are not as well established.