Diamond Resorts International Club are now the subject of a Class Action as a group of timeshare owners have filed a lawsuit against Diamond, claiming that Diamond sold unregistered investment contracts.
Diamond apparently told clients during these protracted high-pressure presentations, that they were investing in their future, as their points would increase in value. They were also told that they would be able to use the points against their annual maintenance fees, bequeath the points to their heirs as an inheritance and of course sell them at any time in the future; all very familiar and dubious sales tactics in the timeshare industry. The clients claim that as these are investment contracts and therefore securities that they are covered under the United States Securities Laws and therefore in violation of the US Securities Act of 1993.
Unfortunately, when the customers came to cash in their investments, they found they were locked into perpetuity contracts, with very little resale value and of course high maintenance fees (which their points could not be used against as told).
Kaarina Pakka has instigated the class action, along with many other Diamond Resorts International clients who were coerced into signing lengthy Diamond agreements. The “group” behind the action have stated that they were told the purchase was tied to real estate and could therefore be sold for a profit. In addition, they were not allowed to discuss their purchases with legal advisors as they could not take the documents off Diamond Resort premises without having signed and they also were not given enough time to read the agreements whilst on site.
These customers have paid, in many cases, exorbitant purchase prices, Pakka herself having paid $175,356 for 50,000 points. Pakka, along with the other claimants discovered that instead of receiving a return on their investment they are stuck paying ever increasing maintenance fees and, in some cases, high interest rates if they also took out a loan to pay for their purchases.
The lawsuit is asking for a trial by Jury, they are also requesting compensation and Diamond are prohibited from continuing to market and sell unregistered securities. They are also fighting for the right for class action members to relinquish or rescind their points should they wish to do so.
So many timeshare owners are now coming to realise that they can no longer afford their timeshare, as maintenance fees continue to increase every year, or their circumstances have changed and it no longer suits their holidaying requirements, however they are tied into these ´lifelong contracts´ which can continue to haunt the family long after the well meaning parents have bequeathed them to their heirs.
It is important to remember that purchasing a timeshare should never be viewed as a financial investment; it can be said that you are investing in better holidays and how you spend your family time, but it must be remembered that there is almost NO resale value for a timeshare, a quick look on eBay will confirm this as people have them listed from as little as £1/$1.
The mis-selling of timeshares and holiday products continues throughout the industry and a positive outcome for Pakka and the other claimants will hopefully showcase Diamond and the other companies leading the field in the use of these scandalous practice’s that, enough is enough.
Posted on: March 31, 2019
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01253 804 318 or email: info@TimeshareConsumerAssociation.org.uk