New RCI Claas action against rentals, now Points

Started by Carolinian, October 02, 2009, 17:32:38

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RCI is facing another class action lawsuit in the US, this time on behalf of its points members, against RCI's rental policies.  Here is the scoop from Timesharing Today magazine.  BTW, for those who do not subscribe, this is an excellent publication.  You can subscribe on their website.


RCI faces another Class Action Suit - Points

TimeSharing Today recently learned that a Points member filed a class action Complaint in the same United States District Court in New Jersey as the Class Action lawsuit by Weeks Members. There are similar allegations in the Points Complaint in that it states RCI engages in a "fraudulent, deceptive and unconscionable marketing scheme" by representing "that only members of the program can access the timeshares," whereas RCI actually engages in the "practice of skimming a large percentage of the timeshares from the system, including many prime timeshares, and renting them to the general public at a profit to RCI, or selling them to vendors who then rent them to the general public."

It is interesting to note that Count II of the 38-page Points Complaint includes: A Breach of Implied Covenant of Good Faith and Fair Dealing. ( See the article below: What the heck is an implied covenant of good faith and fair dealing?)

RCI has filed a motion to dismiss certain aspects of the Complaint. The court has not yet ruled on that motion. A case management conference, setting deadlines for pretrial discovery and other pretrial procedures, is scheduled for October 26, 2009.

If you have not yet read a complaint in a class action lawsuit, take a few minutes to view the Points Complaint at

TimeSharing Today will continue to follow events in this lawsuit as it has done in the in Weeks Members Lawsuit. Another Fairness Hearing in the Weeks Member suit is scheduled for November 30th.

To send your comments, email: Subject: Points Class Action

What the heck is an implied covenant of good faith and fair dealing?

According to The Free Dictionary, it is "a general assumption of the law of contracts, that people will act in good faith and deal fairly without breaking their word, using shifty means to avoid obligations, or denying what the other party obviously understood".

As an example: A homeowner signs a contract with a real estate broker to sell a house. However, the seller always has a reason why the broker can't bring over a prospective buyer or has the house in a complete mess when buyers do get in, so the house can't be sold.

The Points Class Action, mentioned above, includes a claim that RCI's actions are a breach of the implied covenant of good faith and fair dealing. because RCI's actions in skimming weeks from the Spacebank frustrates the plaintiff's expectations and thwarts the fundamental purpose of the agreement, which is access to the deposited weeks.

Please send comments to Subject: Good faith

Weeks Class Action update

Objectors to the proposed RCI Weeks Class Action Settlement are waiting for news regarding a Court determination on whether it will appoint a Lead Counsel for the Objectors.

Two attorneys have submitted applications to be named "Lead Counsel for the Objectors" in order to coordinate Objections and to enjoy more formal status in the case: Susan Collins, a matrimonial attorney from Western New York who owns 9 timeshare weeks, and who has extensive experience with timesharing and exchanges, and Stephan Willett, a former patent attorney whose parents own a timeshare week, and who is has some experience as a class-action attorney. TST's publisher, Shep Altshuler, who has attended the court appearances and has seen both attorneys in action, has supported the appointment of Ms.Collins as Lead Counsel for the Objectors.

A new notice about the proposed settlement is expected to go out within a few days. A link to the 38-page proposed settlement can be found at the bottom of RCI's log-in page. (Readers should be careful when printing the document, or they will print all 291 pages including the attachments!)

A summary of the major points of the settlement prepared by

TimeSharing Today can be viewed by Clicking Here:

What's a Contract of Adhesion?

According to The Free Dictionary, it is "a type of contract, a legally binding agreement between two parties to do a certain thing, in which one side has all the bargaining power and uses it to write the contract primarily to his or her advantage. An example of an adhesion contract is a standardized contract form that offers goods or services to consumers on essentially a "take it or leave it" basis without giving consumers realistic opportunities to negotiate terms that would benefit their interests".

Yup, you're stuck when you go along with an arrangement that fits the above description. So, our questions to you are:

1. Were previously aware of this clause?

ASSIGNMENT OF RIGHTS. By Depositing Vacation Time with RCI, each Member relinquishes all rights to use that Vacation Time and agrees that such Deposited Vacation Time may be used by RCI for any commercially reasonable purpose, including but not limited to the satisfaction of Exchange Requests, for inspection visits, promotions, rental, sale, marketing or for other purposes at RCI's sole discretion, including use in other exchange or accommodation programs.
2. Read it carefully. What does it mean to you?

3. When RCI says that Deposited Vacation Time may be used by RCI for any commercially reasonable purpose, are all uses reasonable?

RCI, as far as TimeSharing Today has been able to determine, relies on this clause when it insists it has the lawful right to rent weeks. When the Plaintiffs Attorney in the Weeks Members Class action law suit was asked if "other purposes" were ever questioned. The reply was that the focus of the lawsuit was on rentals.


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