Regular readers will be aware of the term used above “the licence to lie”. In short the phrase comes from the intransigence of timeshare developers to police the sales techniques and verbal representations used by their sales staff. Whilst we say that developers don’t “police” their sales staff, in virtually all cases they are completely aware of what takes place and what is said on the sales floor but turn a blind eye.
In examples received by TCA we have even seen evidence of this in timeshare sales training manuals. Maybe it could be argued that if such methods were verbally relayed by a sales trainer, whilst still unacceptable, could be passed off as a rogue staff member, but when the “licence to lie” goes to print in a glossy manual we doubt that this has escaped the bosses eye.
Unfortunately this problem is not isolated; it happens wherever in the world there is a timeshare resort below we will take a little closer look at some of the companies that have been caught out.
Caught in the act
Last week we published an article surrounding a court case in the USA where a small developer, FantaSea Resorts, was found guilty of systematically lying to customers, the upshot of which was refunds to owners of over $1 million. No doubt other developers have been subject to similar cases where the licence to lie came into play but those were probably settled out of court.
We ask if the problem is isolated to the sales staff, with senior management being blissfully unaware of what happening on the sales floor, for a start, we very much doubt that and by way of evidence we share a video below:
Click on the picture to see the full video but in short the clip features Richard Siegal, son of the owner of the largest independent time share company, Westgate Resorts. Mr Siegal is presenting at the morning wind up sales meeting. In one section he says every person in the room should own at least one timeshare but if you don’t “lie and say you do”. Later on he commands all present to not let any prospect to leave that days’ sales presentation without buying something. From this it appears that not only management are aware but in the case of Westgate, even the owners’ son is not only aware but party to the licence to lie.
Does this only happen in America?
As we stated above, where there is timeshare the problem exists. Another news item came to our attention recently, this time featuring a timeshare company in Australia. Earlier this year Ultiqa, an Australian timeshare developer failed consumers with multiple breaches of Australian financial services laws. Between October 2017 and March 2019, financial advisers acting as authorised representatives of Ultiqa advised consumers to invest in the Ultiqa Lifestyle Scheme, a timeshare scheme, despite such advice not being in the consumers’ best interests and not being appropriate to their circumstances.
Consumers reported the upfront cost of joining the Scheme was between $10,000 to $25,000 with ongoing annual fees of up to $800. Most consumers who bought into the timeshare scheme took out a loan with a company related to Ultiqa to pay for their timeshare.
Naturally the judgement was quite long but in the summing up, some interesting points were raised by the presiding Judge:
“In handing down her decision, Justice Downes found that Ultiqa’s authorised representatives prioritised sales objectives and targets over their clients’ best interests, saying, ‘That they gave such priority also manifested by the authorised representatives engaging in tactics to pressure the consumers to sign up at the presentation, including (in one instance) preventing the consumer from obtaining external advice, (in two instances) misleading the consumers by representing that the interest in the Scheme was not a timeshare scheme.”
A further note of interest is that Justice Downes echoed the points we raised earlier in this article:
“Justice Downes’ decision also quoted a sales manual provided to Ultiqa’s authorised representatives that said, ‘Once your client is on the Sales Deck they come to the grim realization that this is a sales environment and what is going through their mind is “How can we get out of here?”, and, if you give them the chance, they will. DO NOT GIVE THEM THE CHANCE! Do everything you can do to amuse, interest, excite, relax, humour, flatter and if necessary cajole your clients into staying.”
In the end The Court declared that Ultiqa failed to:
- act efficiently, honestly and fairly;
- provide relevant training to its authorised representatives;
- monitor and supervise its authorised representatives appropriately; and
- put in place documented policies and procedures to support the advice process
Upshot was that Ultiqa have now ceased trading.
TCA comment
To a certain extent the content of this article is superfluous to existing timeshare owners because in many cases they have already fallen prey to the licence to lie, but for those thinking of buying into timeshare, let this be a warning. Because timeshare basically is a non tangible product it’s very hard to tell at a sales presentation whether the product will do “what it says on the tin”. If it came in a tin then maybe there would be a chance but as its all thin air, what chance?
We honestly can think of no other product that can be presented with the potential for so many untruths as timeshare. As owners we would guess that many of the promises you were told to persuade you to buy have not come true, but you only found out when it was too late. Our question would be, is it not time that stronger consumer protection laws were enforced on the entire industry, unfortunately Hell may freeze over first. At least the two cases we have highlighted show a glimmer of hope but the reality is, that’s all it is, a glimmer.
We would like to thank the Australian Securities & Investment Commission for the content we have used. If you would like to read the full article in may be accessed here.
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