A Delaware federal judge recently narrowed claims from plaintiffs seeking class certification in a case alleging that Wyndham Vacation Resorts Inc. failed to tell would-be buyers that their timeshares carried little to no resale value and came with hidden fees, among other omissions.
U.S. District Judge Richard G. Andrews waived claims based on the Nevada Deceptive Trade Practices Act, finding that timeshares don’t count as goods or services under the law. He found, however, that it was not too late for a plaintiff to bring claims of fraudulent inducement by omission and violations of the Tennessee Timeshare Act in the case.
At TCA we would have to say that we consider timeshare to be a service. Agreed, it certainly cannot be classified as goods because unlike say a TV as its intangible, yes it’s a product but you can’t wrap it up and take it away. All timeshare does is supply a service for owners to book and take holidays, for a fee of course. Trying to find other descriptions beats us, it’s not an investment, and it’s not a physical product, no property interests so what is it? The only description left would be a service; anyway, whilst the judge dismissed the claim under one law he ventured another that may work.
The Case
The case revolves around several timeshare owners that say Wyndham never told them that they could not refinance their timeshare purchases to avoid Wyndham interest rates as high as 15.9%. Nor were they told that annual maintenance fees could rise rapidly, that the company overbooks and oversold units, or that reservations must be made more than a year in advance, among other limits. Wyndham also rushes customers to sign timeshare contracts without giving them enough time to read the fine print, the plaintiffs argue.
Whilst as we have seen, the judge rejected the claim under the Nevada Deceptive Trade Practices Act, he was happy for it to proceed under the Tennessee Timeshare Act also quoting that the plaintiffs were within their rights under the three year statute of limitation.
TCA Comment
Yet another one to watch, however once again we have a David and Goliath scenario. At present there are only three plaintiffs, however, a number of 2,000 possibly increasing to 250,000 has been mentioned. The latter figure was knocked back as Judge Andrews denied a motion from plaintiffs to amend the size of the class from 2,000 to 250,000, finding that that request could be made when the plaintiffs move to certify the class.
Even taking that into account, Wyndham is by far the largest timeshare developer on the planet and of course, never takes any attack lying down. Just to put that into context, Wyndham operates a portfolio of 25,000 units at 220 resorts with revenue well in excess of $5bn, without doubt, they can afford the exorbitant costs of the best legal brains the USA can offer.
Once again we will have to see where this all goes but suffice to say there is a growing level of dissent amongst timeshare owners across the board. Rising maintenance fees, expensive finance, availability problems aren’t just confined to Wyndham, almost zero values and rushed decisions added are all perennial problems for the timeshare industry as a whole. Naturally, TCA will be following this case and will report more as and when further information is forthcoming.
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