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]Advocacy for Timeshare-Exit Reform; Rejects Diamond Resorts' Push to Prevent Third-Party Assistance

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While there is a definite need for reform in the timeshare-exit industry, it is concerning when Diamond Resorts CEO Mike Flaskey publishes a national video campaign proclaiming his dedication to "shutting down" the entire exit industry. Flaskey's push to prevent Diamond timeshare owners from seeking third-party assistance when exiting a Diamond timeshare is both self-serving and dangerous for consumers. It forces consumers to have no choice but to deal with Flaskey's team about ending timeshare ownership, thereby ensuring Diamond's voice is the only one consumers hear regarding exit options. In doing so, Diamond would essentially hold consumers captive--permitting his team more opportunities to persuade owners not to exit and to continue making payments on an unwanted timeshare.

During my 15-plus-year tenure in the timeshare-exit industry, I have been an advocate of consumer education and industry reform. The timeshare-exit industry has very little regulation and oversight, so that timeshare owners don't know whom to trust. This led me, in early 2018, to write and publish the Consumers' Guide to Timeshare Exit*, giving consumers access to education before selecting a timeshare-exit company. Issues have worsened since the COVID-19 pandemic as dozens of new timeshare-exit companies with little or no experience are entering the space, making it even more difficult for consumers to navigate. The solution, however, is not to shut down every company providing third-party help to timeshare owners. The solution is to regulate the exit industry--shut down the bad actors operating in it and prevent bad actors from entering in the first place.

The American Resort Development Association publishes yearly data stating that over nine million Americans own a timeshare, making it a ten-billion-dollar-a-year industry. Additionally, I estimate that the timeshare-exit industry generates about $500-$800 million, making it more than the "cottage industry" Flaskey claims it to be. Timeshare exit is very different from timeshare sales--they are separate industries and the fact is, there wouldn't be an exit industry in our free market economy if there was no consumer demand. A trustworthy, legitimate, third-party exit company is a valuable part of a healthy life cycle of timeshare ownership.

My company alone has numerous signed legal declarations of Diamond timeshare owners, many of them vulnerable seniors, that would break your heart and make your fists ball in anger. They are declarations from clients who went back to Diamond to try and exit--only to report that they were lied to yet again by Diamond personnel in one manner or another, thus preventing an exit as Diamond continued tightening the chains of financial obligations around their necks. According to our data, of the Diamond clients who tried ending their ownership prior to hiring Newton Group, 57% had first asked Diamond to end their timeshare ownership but were rejected, or worse, upsold at the promise of an exit. An additional 29% hired another exit company that failed them, costing more time and money (see graphic for additional statistics). These numbers paint a bleak picture of desperate consumers who are facing a double-edged sword and it strikes at the heart of why the exit industry is both needed and in need of reform.

How Diamond Owners Tried Ending Timeshare Ownership Before Hiring Newton Group
How Diamond Owners Tried Ending Timeshare Ownership Before Hiring Newton Group
(Image by Newton Group)
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Flaskey's position that "there is simply no need for [exit] companies to exist other than to mislead consumers for their own benefit" is unfair to consumers. Flaskey is a salesman, and he has a financial interest in persuading consumers to talk only with Diamond. His position is self-serving and does not solve the problem created by Diamond in the first instance: a percentage of Diamond timeshare owners prefer to work with a third party as they feel they've been burned by Diamond Resorts and no longer trust them. Flaskey and his national campaign makes no secret of Diamond's objection to anyone providing any third-party help to their timeshare owners. But we know what life will be like for timeshare owners if they are left at the mercy of Flaskey and Diamond Resorts to do the right thing. We must make sure consumers have a choice, because when you lose choice, you lose freedom.

Flaskey wants to take away that freedom of choice from consumers. He would prefer that all Diamond owners have only one exit option--Diamond's discretionary exit program created and operated by Diamond itself. Flaskey was quoted in the Orlando Sentinel on July 19, 2019, stating he has yet to see a "legitimate" timeshare-exit company. As for Diamond's exit program, labeled "Transitions™ By Diamond Resorts", it is limited by a list of "Conditions to Apply". Diamond states that, through its Transitions program, "Diamond Resorts will consider your application on a case-by-case basis, reviewing it both on its own merits and in the context of all other qualifying Transition applications submitted to date. This program is subject to change or termination without notice and in the sole discretion of Diamond Resorts." Is this what Flaskey meant when he talked of "legitimate" timeshare exit? Even the name "Transitions™" implies a vague process--one ripe with disclaimers, open to Diamond's interpretation and not even guaranteed to remain in existence.

To make matters even worse, one of the "Conditions to Apply" to Transitions™ is that owners' "participation with a timeshare exit or resale company or firm may negatively impact [the] ability to apply for Transitions". Their entire program to "relinquish... vacation ownership" shocks the conscience. It's akin to hostage takers saying not to seek help from the police, or in this case, any third-party help or legal advice. Diamond resorts should not be able to treat their owners who seek third-party help any differently. Such obvious attempts to oppress their owners are harmful, appalling and should be stopped immediately.

Furthermore, Diamond Resorts has a reputation for taking advantage of consumers. For example, the Arizona Attorney General took action against Diamond based on grounds that Diamond had been misleading consumers to purchase their timeshares. In 2019, USA Today published an article about Diamond Resorts having sold $150,000 in timeshare points to a 90-year-old couple in a hard-sell job. In 2016, the New York Times published an article entitled "The Timeshare Hard Sell Comes Roaring Back", reporting that Diamond had essentially bamboozled a 77-year-old woman after a high-pressure sales presentation lasting five hours.

Flaskey is either blind to the problems that Diamond timeshare owners are facing today, or he is fully aware and his national campaign to shut down the exit industry is an attempt to keep Diamond owners locked into contracts and paying fees into perpetuity.

Consumers benefit from choice. Flaskey is missing a valuable piece to solve the problem: a need for comprehensive legislation and strict rules that protect consumers when ending their timeshare ownership. To this end, Newton Group will be publishing their recommendations for timeshare-exit reform shortly.

*Link to the Consumers' Guide to Timeshare Exit.

 

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Gordon Newton is a 15 year veteran of the timeshare exit industry. He is the author of the Consumer's Guide to Timeshare Exit and president of the Newton Group.

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