On Wednesday 16th August 2017 New York Attorney General Eric T. Schneiderman announced that the owners and operators of The Manhattan Club, will be paying a $6.5 million settlement after admitting they lured over 1400 people into buying timeshare with a “bait and switch” scheme.
The Manhattan Club is an upscale timeshare building situated near New York City’s iconic Carnegie Hall. The hotel’s website describes the property as a “unique” “residence-style boutique hotel” that blends “a vacation ownership retreat with a luxury suite hotel.”
This has been a long case that began in 2014 after many “owners” complained about ever increasing maintenance fees, inability to sell timeshare which led to some “owners” having to sell their timeshare for as little as $1 to avoid paying further fees and lack of availability. “Owners” were led to believe that The Manhattan Club was exclusive to timeshare owners but this was not the case as the general public could book a room over the Internet.
Many of the buyers paid $10,000 to $40,000 upfront, plus yearly maintenance costs in hopes of owning a little bit of New York City real estate, even if only for a few weeks a year, according to the New York Attorney General’s office. However, they found that besides being unable to book rooms, their maintenance costs were spiraling out of control.
An alleged owner wrote on consumeraffairs.com
“My husband & I are like almost everyone who has written regarding their Manhattan Club timeshare. We’ve had it for about 8 yrs & never able to use it. We were assured that if we didn’t want it anymore they would sell it or buy it from us… Now they say that was never an option!!! We have never been able to get a reservation & as one owner said, it’s cheaper & easier to get a room in a hotel for the weekend. The fees are OUT OF CONTROL!!! I want out & cannot get out. Please help!!! I was also scammed by ITE into paying for them to sell it & never heard from them again nor can reach a human by phone.”
Investigators from Schneiderman’s office posed as potential buyers and found that The Manhattan Club’s sales staff used high pressure sales tactics and misinformation to win sales. It was also found that the timeshare had been sold to over 1400 people although there is only 286 suites.
With the false promises and shady tactics used, The Manhattan Club violated New York Law.
The Attorney General’s office says this settlement is the “largest in recent history for the Attorney General’s Real Estate Finance Bureau“ and that Manhattan Club’s operators “acknowledge that they repeatedly misled shareowners about the club’s reservation process, their ability to sell back their shares, and the details of the club’s state-approved offering plan.” Besides the $6.5 million fee, the operators are “barred from the timeshare industry; will sell their stakes to a third-party purchaser and relinquish management control;” and will “Remove all sponsor-appointed current officers and directors from their positions as members of the Board of the Timeshare Association.”
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk