DRI - In Class Action - Court Case Looms!

[mavo]

On Friday 9th February 2018 a Class Action was filed in Las Vegas against various DRI/Apollo companies and company officers Michael Flaskey and Kenneth Seigel.
This action was filed by Albright, Stoddard. Warnick and Albright on behalf of numerous clients. Briefly it alleges violation of the securities act 1933 and is built seemingly around the selling practices during presentations by sales agents also known as vacation counselors.
The document is very lengthy and detailed (Some 43 pages in fact) and the plaintiffs have demanded a trial by jury for the defendants.

A couple of years ago I happened to do some research into Albright, Stoddard. Warnick and Albright and what I gleaned from that research was that they very very rarely lose cases that they take on.

What does this mean for the industry of timeshare? Is it a bad thing?
My view on the answer to both the above questions is that it is not necessarily a bad thing. Should DRI/Apollo be found guilty it will either kill it or cure it. By that I mean that it will either start the ball rolling on much needed industry reform. Reforms that consumers such as myself and Charlie 1 have been putting forward for years. Or the industry will ignore the need for reform and continue its downward spiral.

[helpmate1]

We believe that this Class Action will have implications beyond the outcome of a court case with DRI. This could be the ripple effect that becomes a Tsunami in the timeshare industry. We have seen the likes of Anfi, Silverpoints, Diamond and MGM lose in the courts in Europe. However, this is the first time we have seen Diamond really challenged on their own ground of Vegas.

DRI have come under a lot of criticism from a percentage of their members over the years alleging that they were miss-sold and complaining that they can’t viably sell their DRI Points. So it has its fair share of disgruntled members particularly those between the ages of 65 and 75 as they are locked in to their timeshare and on limited income pensions.
In the USA there does not appear to be a single reputable reseller who is willing to take on the sale of DRI Points and so this situation can only lead eventually down the path that this Class Action is taking.

DRI suddenly closed down its sales force in Europe in November of last year and one wonders if the above scenario is the reason why?
It is unlikely, given the background of Albright. Studdard that they would be taking on any case if it were not pretty solid.

A full copy of the papers of the looming court case are provided in the Pdf below

[Lawnmower75]

Mavo I know from the past that you were a great believer in Diamond Resorts and you were a member from the start what is your view on them now and is it affecting your holidays

[mavo]

My view is the same as ever. Timeshare is a great concept spoilt only by corporate greed and the failure at corporate level to provide decent customer service. When you join any club (in this instance a points club) you have rights as a member of that club. You are part of something.

I believe that as such you have the right to be treated with respect not just at the resort but at the corporate end of the club. You should have the right to go to an update or presentation and not be lied to. You should have the right to join the club by being given the correct information to make a decision on what joining entails and not be given a lot of false promises. You have the right to expect that what you are told at presentations will be honoured and you should not be told after the event that what is said in order to induce you to buy should be ignored if it is not in the contract. Nor should consumers be persuaded to buy more points in order to gain more benefits which are then withdrawn at a later date.
Lying seems to be widespread throughout most of the industry that is run by the larger developers and it is no surprise to me that eventually a large and highly successful law company would latch on to this and gather enough disgruntled consumers to begin a class action.
Points owners want Customer Service not lip service. Some of our guides on here are there because of the failure of customer services at corporate level to provide the necessary education to their customers on how to best use the products sold to them.

My further view is that although we can expect the wheels of justice to roll very slowly with a lot of heel dragging. It will either kill it or cure it in as much as it will either lead to much needed reform (which is recognised by the industry) or it will lead to the further decline of an industry which just does not seem to have the will to grasp the nettle and get working on what they know to be necessary. They know what to do but it means conceding to consumers and that cuts across 30 years of doing just as they liked, before the advent of the internet.

Make no mistake Timeshare worked correctly by its users gives great value for money. You only need to compare it with the likes of package holidays run by such as Jet 2 to realise that in reality and if you know what you are doing a timeshare week can cost as little as half the cost of a package holiday and the quality is consistent in that you know what you are going to get beforehand.

In conclusion: I hope that this is the shot across the bows that the top end of the industry needs and they now get on with what is necessary so that I and others can be allowed to continue to take wonderful holidays at affordable prices.

[Charlie1]

In my experience there is always a plus when a timeshare group is challenged like this. Rather than just be defensive there is an opportunity to review sales practices under the radar.

Questions I would be asking myself.

1) If the sales model is not working how can we introduce and develop other effective areas to market our business model?

I believe with effective marketing, with online support a new approach could be made. You would still need a representative on the resort. In my opinion they would need a whole new approach BEFORE timeshare owners and guests come to the resort.

We should only be giving consumers what they need by asking real questions rather than selling to them under pressure. The old selling model is dead!

Resort representatives would need a whole new training program. I would not be employing those that had been in timeshare before. The approach would need to be radically different so coupled with the right marketing you would end up with happy consumers.


2) The timeshare product needs a fresh review - not with those that are employed with the group so they make it fit. This needs a fresh pair of eyes

3) The current secondary market as it is DOES not enable sales to take place. In Europe it would appear beyond selling to another member you have to use a Resale company and the member does not have a choice how they can sell their own product??

A question I would be asking myself if I was DRI was how many sales by percentage have taken place with Travel and Leisure? The next question I would be asking was how many of those were to existing DRI members that bought additional points? So how many new members have been introduced with Travel and Leisure. How are they promoting our members points beyond listing them on their website?

Selling points outside of Europe does not work either beyond selling/giving them to fellow members it would appear that no selling broker in America will even try to sell them!

This needs a whole new rethink and perhaps DRI points are too complicated - just maybe they don't need all the different types of points in DRI where you can`t seem to be able to merge them to obtain holiday accommodation.

I have no doubt that there are DRI members that have great holidays and work the systems but just maybe the average holidaymaker does not want a degree in DRI holiday points. If you work the system no doubt substantial savings can be made, more so if your not booking prime time. If you compare 'like for like' you will save money. I would be working towards simplifying the DRI Points system.

Does anyone have experiences they would like to share or points they would like to raise?

[mavo]

One thing springs to mind from the above post Charlie 1.

What you seem to be advocating is ethical sales presentations? (Heaven forbid)
This would only work if sold by a salesperson in a salaried position with no commission payments.
If my thinking is correct then it would be a great saving to developers as it has been suggested that commissions account for more than 50% of the cost of sales and marketing.. This could mean a radical reduction in the cost of points at the initial purchase stage making the front end cost of timeshare much more reachable to the average working man and his family.

[Charlie1]

DRI sales are obviously not working! A licensed salaried position with a bonus not linked to actual sales would work. This would cut dramatically marketing and sales costs as you say Mavo. this would make the DRI product more attractive. This would work if the there was a process and structure in place to support the staff member. I have worked within sales organisations at the top end with one organisation larger than DRI (not in the holiday industry) There is always a solution - sometimes you have to work your way towards making this work with fresh eyes. Those involved will try to justify and defend they need to start with their big picture in mind and ask the question when they break down their challenge with a question at every point starting with what if ....

[Lawnmower75]

Would a salaried position help if DRI do not change clauses in there contracts one being that any verbal promise at the presentation are not part of the contract

[mavo]

With a salaried position and ethical sales training there would be no longer be the sales need to tell lies in order to generate a sale anyway. So the clause would become redundant.
We have to first accept that timeshare is a product that (without the bad publicity that commission sales has been responsible for generating) is a good enough product to sell itself.

[Charlie1]

Would a salaried position help if DRI do not change clauses in there contracts one being that any verbal promise at the presentation are not part of the contract

If the income is salaried and the bonus was not linked to sales results and the product stacked up with the concept then were would be no need to stretch the truth. Bonuses could be linked to an automated email going to the guest/member with a simple survey about their holiday like a tick box. it would end with a general comments box. In there I would also ask about the value they saw in the holiday consultant - did you sit down with our holiday/consultant Yes - No and if Yes a rating from 1-5 and the opportunity to comment.

The objective for the holiday consultant is to ensure each member knows how to use their product! By asking the right questions the member would identify if they had a need for more product.

Just a thought a further thought as there is so much that could be done. I have written on this just a 'few' times. I would maybe end with a general knowledge quiz on the DRI product all those members guests surveys that complete would go into a draw to win a free bottle of bubbly or hamper to take away with them.

If DRI actually read the results and used the intel they could adjust their training/literature/product to suit. Knowledge is king if the right questions are asked and only if you use it!

[mavo]

The fact is that Companies, Organizations ,Governments even, have not got to grips with how to use the internet to their advantage. Many of them including Timeshare Companies treat the internet as their enemy. In reality it is their friend. It has lots of negativity, that we accept, but that is capable of being turned into positives as negativity tells people where they are going wrong. Once we are made aware of where we are going wrong then we can do something about it. So it becomes simply a matter of listening to and acting upon the information that the internet offers up for free. No need to bring in costly business consultants to tell you what you can get for nothing on forums, blog sites and facebook sites.

[Lawnmower75]

What do Diamond owners think of Apollo‘s $184 million loan to Jared Kushner more money for Trump Towers

[mavo]

What do Diamond owners think of Apollo‘s $184 million loan to Jared Kushner more money for Trump Towers

This is something that seems to have generated activity from some "influential" **DR members over the pond.

** Note. It is now DR as Apollo in a rebranding seem to have dropped the International, which may, in the longer term, be more significant to us here in the UK than the loan to Kushner from Apollo.
It is also to be noted that the loan is from Apollo not DR. (DR being simply a small subsidiary of the significantly larger Apollo Group of Companies)