April 5, 2024
There are two very different Plaintiff families in the class action lawsuit, Carol and Donald Yorks, Taya and Connor Fissix, vs. Wyndham Vacation Resorts, Inc., filed March 25, 2024 in US District Court, Orlando, Case 6:24-cv-00575-CEM-DC. Taya Fissix is an active duty Army servicemember. The Yorks are seniors with significant medical challenges.
By Irene Parker
Taya represents a subclass of servicemembers eligible for the Servicemembers Civil Relief Act (SCRA). According to the SCRA, lenders are required to lower high interest rate loans, borrowed before entering service, to 6%, during the borrower's tenure with the military. Wyndham told Taya she needed only to supply her duty orders, but ignored 74 emails Taya had sent to Wyndham since September of 2023.
Much has been written about timeshare targeting the elderly, but seniors often are not that concerned about their credit score. The young are concerned that they will not be able to buy a home or car. For the military, a loan default can place security clearances in jeopardy, and can lead to involuntary separation from service.
In addition to the SCRA, Congress enacted the Military Lending Act (MLA) to protect servicemembers from predatory lending. The MLA prohibits arbitration, arguably biased against consumers, and especially military consumers. At least four timeshare Developers have been sued alleged to have violated the Military Lending Act.
Extreme adverse arbitration rulings have occurred. One active duty Navy servicemember, disputing a $12,000 timeshare purchase, was ordered by an arbitrator to pay $66,000. The amount included over $50,000 of the Developer’s attorney fees.
Oral Arguments in Steines vs. Westgate, Case 6:22-cv-00629-RBD-DAB, are to be held at the Eleventh Circuit Court of Appeals in Atlanta on April 18. Westgate Resorts appealed a lower Florida District Court’s ruling in which Florida Judge Roy B. Dalton ruled that a timeshare stay is more like a transient hotel stay than a residential stay. Residential mortgages are exempt from the MLA. Developers argue that timeshare mortgages are the same as residential mortgages.
Timeshare loans are financed at 12 to 19% and are all but impossible to sell if there is an outstanding mortgage. What house can’t be sold because there is an outstanding mortgage? Given deployments, the lack of a secondary market presents a serious risk for military timeshare buyers. As far as a timeshare being the same as a residence, Judge Dalton commented during Orlando oral arguments, “When I check out of a timeshare, I can’t leave my underwear and toothpaste.”
The Yorks and Fissix class action lawsuit follows the Eleventh Circuit Court of Appeals ruling in Bedgood et al v. Wyndham Vacation Resorts and Worldmark, Case Number: 6:21-cv-00418. The same appellate court this past December ruled that Wyndham’s arbitration clause was unenforceable in contracts that did not allow an arbitration forum other than the American Arbitration Association (AAA). Wyndham had refused to pay AAA fees because of two AAA policies they didn’t agree with.
Taya was a guest on our first Timeshare Solution or Surrender show February 26, 2024, aired on ROKU and Amazon PodTV. Taya's interview:
https://www.youtube.com/watch?v=e7vqBqsZdSIdone
According to the lawsuit complaint:
On October 27, 2020, in Las Vegas, Taya and Connor purchased 154,000 Wyndham Club points for $23,900, financing $16,274 at 15.49%. A down payment of $7,975 was charged to what the Fissixs said Wyndham agents referred to as a Rewards Account that agents opened for them, not mentioning a credit card. Taya stated in the complaint that they were told they could receive a 40% discount, because she was military.
Around December of 2020, the Fissixs began receiving weekly calls from Wyndham encouraging them to attend a meeting. At a meeting at Wyndham's National Harbor resort, Connor was informed that they could lower their interest rate if they purchased additional points. Connor was told that “their first contract was incorrect” but if they purchased additional points, it would lower interest rates on their prior loan. Connor purchased 146,000 additional points for $27,900, financing $23,111 at 14.49%. The purchase had no effect on the interest rate of their prior loan. Maintenance fees increased from $2,352.96 to $2,511.12.
On December 2, 2021 the Fissixxs rescinded a contract for 105,000 additional points. According to the Fissixs, that agent advised that it would be beneficial to consolidate their two prior loans and rent out the points to offset maintenance fees. Wyndham and other Developers have been suspending accounts of those suspected of renting for commercial purposes. Timeshare buyers industry-wide have reported that sales agents told them they could rent out their timeshare to offset maintenance fees. This is unfeasible for the average timeshare member.
Count One in the Yorks and Fissix Lawsuit: Breach of Contract
Count Two: Fraud by inducement by omission
Count Three: Violation of the South Carolina Timeshare Act
Count Four: Violation of the Uniform Trade Practices Act
Count Five: Violation of the Maryland Timeshare Act
Count Six: Violation of the the SCRA
We’ve heard from several active duty servicemembers who found their security clearances in jeopardy because of a timeshare loan default. They reported that they were told they were getting a discount because they are military, could easily refinance because they are military, or easily rent out their timeshare to cover costs if they were deployed or could not use the timeshare. None of these assurances are true.
Next week we look at Plaintiffs Carol and Don Yorks, seniors in their late 70s. Don is a retired Methodist Pastor. He has been diagnosed with Altzheimers and Carol relies on a service dog.
Related Articles and Court Cases
Know Your Military buyer
https://tarda.org/military-security-clearances-and-timeshares-don%E2%80%99t-mix
Steines vs. Westgate
https://tarda.org/steins-v-westgate-at-the-eleventh-circuit---miltary-lending-act
Bedgood vs. Wyndham
https://tarda.org/arbitration-ruling-upheld-by-the-11th-circuit-court-of-appeals
Bluegreen Vacations settled with KRYSTLE NICOLE HARRIS PARKS, and CARL PARKS, Plaintiff, v. BLUEGREEN VACATIONS, Case 9:20-cv-81910-RKA
The Servicemembers Civil Relief Act (“SCRA”) sets a six percent (6%) per annum ceiling on interest charges (including service charges, renewal charges and fees) during the period of a service member’s military service for obligations made prior to the date of entry onto active duty. 50 U.S.C. § 3937(a)(1). For mortgages, interest is capped at six percent during the entire period of military service and for one year after the period of military service. 50 U.S.C. § 3937(a)(1)(A). This reduced rate shall be applied retroactively to date of entry to active duty. Under the SCRA, any interest in excess of 6.0% per year shall be forgiven. Additionally, any payments shall be reduced by the amount of interest forgiven which is allocable to the period of such payment.
Abigail Fisher at Yahoo Finance explains why hedge funds like timeshare stocks -
In this article we are going to look at another set of evil companies that use high pressure sales tactics to trick consumers into signing complex long-term contracts that they don’t understand: timeshare marketing companies. Check out this Reddit post where the user is asking several questions about Wyndham timeshare cancellation. This person was able to cancel and receive a full refund, but many consumers don’t cancel within the 7-day or 10-day window specified in their contracts.
https://finance.yahoo.com/news/best-timeshare-stock-buy-according-135051667.html
JAMES ARCHAMBEAULT, et al., v. WYNDHAM VACATION OWNERSHIP, INC., et al., DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION, Case 6:19-cv-00649-PGB-DCI.
- Sales Compliance Reports are prepared quarterly, and they show violations of Wyndham’s sales policies broken down by individual salespersons, including violations for pitching rent.
- These reports show individuals with 30, 40, and even as high as 57 cited violations, including pitching rent violations. Wyndham did not terminate these sales representatives despite these high numbers of violations.