Law breaking by Diamond Resorts ?

[Sandy Grey]

On 8th February 2013, in  the Royal Sunset Beach Club,  Tenerife,  a consumer signed an agreement with Diamond Resorts (Europe) Ltd. to purchase membership of their 3 year “Discover Diamond” package.  The written agreement quite properly disclosed that the purchaser had a 14 day cooling off period.

But Diamond took twp payments of up-front money from the consumer’s credit card and bank accounts on 8th February and 12th February respectively. On the face of it this is illegal!

I wonder if this is a new policy by Diamond in an attempt to hold in sales or the unsupervised activities of a rogue salesperson ?     Or is there a simpler explanation ?

Sandy Grey

[Carolinian]

I suspect that DRI would not be so foolish as to start doing this as a matter of policy, but I am sure that some members here will report this post to Cloobeck, so maybe we will get an answer.

[Boss Man]

Under what pretence was the money taken for both the consumer and the admin department ?

[Sandy Grey]

Following my message of 17 February a fuller picture has now emerged which does not show Diamond Resorts in a favourable light..

What appears to have happened:

•    On 8 February – whilst at Royal Sunset Beach Club - Mr & Mrs S (the consumer) signed a 3 year  agreement for membership of “Discover Diamond” priced at £2,350. The price was shown on the agreement when they signed, confused by “Deposit £2,350; Balance £NIL” on the related Membership Form !    They was given a copy of this agreement
•   Mr & Mrs S also signed a document  headed “Membership Form Preview Purchase” (a holiday which was to be taken within 12 months) which did not show any price. Mr & Mrs  S were led to believe that this was part of the Discover Diamond package.  They was not given a copy of this agreement.
•   Mr & Mrs S were asked for, and paid, £795 which they understood was the deposit for the Discover Diamond agreement. The money was taken partly on 8  February (card) and partly on 12 February (cheque)
•   On their  return home they wrote (within the 14  day cooling off period which was disclosed on the Discover Diamond   agreement) but they were subsequently told on the ‘phone that the £795 was not refundable.
•   At that   point they contacted the TCA
•   On19 February Mr & Mrs S obtained copies, from Diamond Lancaster, of all “their” documents which included one that they had not been given a copy of  – the  Preview form  which showed the price of £795.     It appears that the price had been added after Mr & Mrs S had signed !

The use of the “dual agreement” dodge in an attempt to circumvent the law banning the taking of a deposit for purchases of greater than 12 months is common amongst the likes of   {banned word/phrase} and, Leisure Alliance  etc. but hardly expected of a responsible trader. When the Timeshare Directive was being drafted (a job I assisted in) it was intended that any contract for more than 12 months, however worded, should be caught by the law.   Whilst technically the dual agreement dodge is probably not illegal it’s purpose is certainly contrary to the intention of the law   If Diamond are having to resort to such sharp practices then their business really must be struggling.

The   hiding of the purpose of the £795 by failing to put a price on the agreement  when Mr & Mrs S signed and failing to give Mr & Mrs S a copy on the day,  appears to have been done with the intent to defraud.

When  Stephen Cloobeck took over  The Former Company he promised to  clean out the dodgy marketing techniques introduced by his predecessor, Nick Benson.   To all  intents and purposes, he did exactly that.    So he may care to comment is this questionable sales practice at RSBC 

[Carolinian]

Following my message of 17 February a fuller picture has now emerged which does not show Diamond Resorts in a favourable light..

What appears to have happened:

•    On 8 February – whilst at Royal Sunset Beach Club - Mr & Mrs S (the consumer) signed a 3 year  agreement for membership of “Discover Diamond” priced at £2,350. The price was shown on the agreement when they signed, confused by “Deposit £2,350; Balance £NIL” on the related Membership Form !    They was given a copy of this agreement
•   Mr & Mrs S also signed a document  headed “Membership Form Preview Purchase” (a holiday which was to be taken within 12 months) which did not show any price. Mr & Mrs  S were led to believe that this was part of the Discover Diamond package.  They was not given a copy of this agreement.
•   Mr & Mrs S were asked for, and paid, £795 which they understood was the deposit for the Discover Diamond agreement. The money was taken partly on 8  February (card) and partly on 12 February (cheque)
•   On their  return home they wrote (within the 14  day cooling off period which was disclosed on the Discover Diamond   agreement) but they were subsequently told on the ‘phone that the £795 was not refundable.
•   At that   point they contacted the TCA
•   On19 February Mr & Mrs S obtained copies, from Diamond Lancaster, of all “their” documents which included one that they had not been given a copy of  – the  Preview form  which showed the price of £795.     It appears that the price had been added after Mr & Mrs S had signed !

The use of the “dual agreement” dodge in an attempt to circumvent the law banning the taking of a deposit for purchases of greater than 12 months is common amongst the likes of   {banned word/phrase} and, Leisure Alliance  etc. but hardly expected of a responsible trader. When the Timeshare Directive was being drafted (a job I assisted in) it was intended that any contract for more than 12 months, however worded, should be caught by the law.   Whilst technically the dual agreement dodge is probably not illegal it’s purpose is certainly contrary to the intention of the law   If Diamond are having to resort to such sharp practices then their business really must be struggling.

The   hiding of the purpose of the £795 by failing to put a price on the agreement  when Mr & Mrs S signed and failing to give Mr & Mrs S a copy on the day,  appears to have been done with the intent to defraud.

When  Stephen Cloobeck took over  The Former Company he promised to  clean out the dodgy marketing techniques introduced by his predecessor, Nick Benson.   To all  intents and purposes, he did exactly that.    So he may care to comment is this questionable sales practice at RSBC

Thanks for the additional details, Sandy.  I do think Cloobeck or someone high at DRI does need to respond to this.  I am sure his ''eyes'' on this board have already allerted him to this thread.

It would also be interesting to see if any major heads roll in sales at the resort involved.  If they do, perhaps it is a local problem that has at least been dealt with internally.  If they don't, well that would speak volumes, too, but in another way.

[charlie1]

As Carolinian mentioned earlier. If the facts stack up this has to be a rogue salesman and has to be nipped in the bud I cannot see DRI desperate enough to take £795 off each customer wrapped up in an additional 12 month contract. However it does seem as though the company is supporting this if the new member received copy documentation from Diamond.

It would appear in this case that the salesman did not inform the client that a part of this contract was a separate 12 month additional holiday contract. It would be interesting to see if this 12month holiday contract has to be a part of the 3 year DRI deal or is an add on that the salesman can include if the new member is happy. Sometimes there is an extra commission attached to contracts of this nature and payment is more prompt to the salesperson.

[jcorrea-lawyer]

Good afternoon everyone,

I am new to the forum, in fact this is my first post. I find it very interesting the subject of this debate. It seems that companies, or at least one, selling timeshare have found de way to overcome the ban on receiving any anticipated money now that it can't be given in any way, nor guarantee it, nor via third parties (or trustees). Using a previous contract, with a duration of less than a year could be a chance. Every law has its loophole...
As I said, I am more than interested in seeing how this ends.

Javier Correa

[Sandy Grey]

In the absence of any response from Diamond, either to Mr & Mrs S or on this forum,  we have to presume that the -  possibly fraudulent -  use of the  “dual agreement” sales process   at Royal Sunset Beach Club is endorsed by Diamond Resorts management.    Effectively the The Former Company dirty tricks operations have  returned despite Stephen Clóobeck’s  claims to have cleaned up the business.

As Stephen Cloobeck is a key speaker at the TATOC conference in a few days time a public discussion on the use/misuse  of the  “dual agreement” selling technique would be very enlightening  Perhaps Tom Longfield, a TATOC Director and a Diamond Member, would be good enough to raise the subject ?

Sandy Grey

[Carolinian]

Sandy, if you want to make sure the subject is raised, the best way to do that is to attend yourself and do so.  It would be good to have a direct answer from the top on this issue.

At a past TATOC conference, they had Bullfrog Lamont from South Africa as a speaker, and if I had known ahead of time, I would have gone just to be able to ask him some very direct questions about his operations in South Africa.  Unfortunately, I did not know he would be there until after the fact.

[Sandy Grey]

An update.

The credit card company agreed with Mr S that the transaction was improper and have refunded him the £400 paid on his card.

Now all it now needs is a cheque for £395 from Diamond attached to a personal note from Stephen Cloobeck with apologies for the “misunderstanding” to close the subject.

I’ll keep you posted.

Sandy Grey

[Carolinian]

Thanks for the update, Sandy.  Are the sales staff at the resort who were involved in this fiasco still employed?  It they have been given the sack, as you would expect if they were going rogue, that would show DRI is above board.  If they haven't, then, well, that tells a very different story . . .

[charlie1]

As Carolinian mentioned earlier. If the facts stack up this has to be a rogue salesman and has to be nipped in the bud I cannot see DRI desperate enough to take £795 off each customer wrapped up in an additional 12 month contract. However it does seem as though the company is supporting this if the new member received copy documentation from Diamond.

It would appear in this case that the salesman did not inform the client that a part of this contract was a separate 12 month additional holiday contract. It would be interesting to see if this 12month holiday contract has to be a part of the 3 year DRI deal or is an add on that the salesman can include if the new member is happy. Sometimes there is an extra commission attached to contracts of this nature and payment is more prompt to the salesperson.

It would be of interest to know the nature of this contract as it appears as if its a 3 year trial package and a tack on 12 month contract which is exempt from the timeshare act and does not require a cooling off notice.

On another note I am amazed at how some of these other companies try to dance around the Timeshare act. I was speaking to one small company who are considering a 12month contract but renewable each year for a £1.00 I did not bother with the mechanics of this, but just to be aware as that maybe the next contract out. Whatever next.

[nattaz]

Hi Sandy, the exact same thing has just happened to me in the same resort and I would be really interested to hear how the couple were successful in obtaining their £400 back from their credit card company. I doubt very much whether Diamond will honour my request to refund me and I have tried my bank but they say as I paid by debit card, there is little I can do other than persue Diamond.
I was naive as I am not that familiar with timeshare and did not know anything about companies not being allowed to ask for advance payments during the 14 day cooling off period. When Diamond sold me the VIP Preview Week and asked me to pay £795, I had been at the "90 minute presentation" for 5 hours! Strange how they make you sign for this before you see your 3 year contract with your witdrawal notice rights in them isn't it? They also do not tell you that unless you attend another sales presentation during this VIP week, they will charge you £40 per person per night! I can't see how behaviour like this is doing anything to clean up the bad image of timeshare.

[Carolinian]

Unfortunately, Sandy has passed away suddenly, a huge loss to timeshare consumers, so he is no longer there as a resource.  I do not know who to point you to, as TATOC purports to be a voice for timeshare consumers, but unlike Sandy's TCA, it seems to be thoroughly in the pocket to the timeshare developers.

Hi Sandy, the exact same thing has just happened to me in the same resort and I would be really interested to hear how the couple were successful in obtaining their £400 back from their credit card company. I doubt very much whether Diamond will honour my request to refund me and I have tried my bank but they say as I paid by debit card, there is little I can do other than persue Diamond.
I was naive as I am not that familiar with timeshare and did not know anything about companies not being allowed to ask for advance payments during the 14 day cooling off period. When Diamond sold me the VIP Preview Week and asked me to pay £795, I had been at the "90 minute presentation" for 5 hours! Strange how they make you sign for this before you see your 3 year contract with your witdrawal notice rights in them isn't it? They also do not tell you that unless you attend another sales presentation during this VIP week, they will charge you £40 per person per night! I can't see how behaviour like this is doing anything to clean up the bad image of timeshare.

[Kevscar]

Nattaz
I have tried my bank but they say as I paid by debit card, there is little I can do

Your bank has lied to you, print this out and take it to them

http://whatconsumer.co.uk/visa-debit-chargeback/ [nofollow]

[nattaz]

Thanks Kevscar, appreciate the advice.