Author Archives: Sharon Newman

Festiva Ordered to Issue Vacation and Timeshare Refunds

Tennessee Attorney General Herbert H. Slatery III recently announced a $3 million settlement with Festiva, a network of vacation and timeshare companies, for alleged violations of the federal Telemarking Act, federal Telemarketing Sales Rule, and the Tennessee Consumer Protection Act.

Under the terms of the settlement, Festiva has agreed to provide $1,250,000 in cash restitution and up to $1,000,000 in loan forgiveness for eligible Tennesseans, and make a $750,000 payment to the State of Tennessee. In addition, Festiva has agreed to specific guidelines prohibiting unfair, deceptive, or misleading acts or practices in connection with their telemarketing and face-to-face sales of vacation or timeshare products.

Certain consumers who purchased vacation or timeshare products from Festiva companies, including Festiva Adventure Club and Etourandtravel, will be eligible to have their Festiva contracts cancelled and receive partial refunds of the money they have paid to date. In addition, some consumers who financed their Festiva purchases will be eligible to have the entire balance of their Festiva loans forgiven.

“Tennessee prides itself on being one of the top tourist destinations in the country. Our office has zero patience for the type of activities exhibited in this instance and will take swift action against companies that do not play by the rules,” Slatery said. “We hope this settlement will remind consumers to always do their homework and research a company before turning over hard-earned dollars to that company.”

The settlement resolves allegations that Festiva operated a telemarketing and direct mail enterprise that used fraudulent and deceptive tactics to lure Tennesseans into attending high-pressure sales presentations designed to sell them expensive vacation memberships and products. According to complaints reviewed by the Tennessee Attorney General’s Office, consumers were misled into believing they had won or been selected for a valuable prize, but to claim the prize, had to comply with many undisclosed requirements including a lengthy, high-pressure sales presentation.

Once consumers purchased their vacation or timeshare products, they learned the vacations were different from what was promised at the sales presentation or during the telemarketing call. Onerous rules and terms allegedly made the products difficult to use, and desirable vacation locations were difficult to book because of unavailability.

The defendants, all headquartered in Asheville, NC, include Festiva Development Group, Inc., d/b/a Festiva Adventure Club, Festiva Real Estate Holdings, LLC, f/k/a Festiva Resorts, LLC, Festiva Resorts Adventure Membership Club Association, Inc., Festiva Sailing Vacations, Inc., Human Capital Solutions, LLC, f/k/a Festiva Resort Services, LLC, Resort Travel & Xchange, LLC, f/k/a Festiva Travel & Xchange, LLC, Patton Hospitality Management, LLC, f/k/a Festiva Management Group, LLC, Zealandia Capital, Inc., f/k/a SETI Marketing, Inc., Zealandia Holding Company, Inc., f/k/a Festiva Hospitality Group, Inc., as well as Festiva principals Donald K. Clayton and Herbert H. Patrick, and Festiva marketing executive Richard A Hartnett. Additional Florida and Arkansas-based defendants were later added to the case including Etourandtravel, Inc., Escapes Travel Choices, LLC, and Festiva/Etourandtravel principal J. Lance Croft.

Known eligible consumers will be notified by mail by the Tennessee Attorney General’s Office in approximately one month. Tennesseans who believe they may be eligible to share in the Festiva settlement are encouraged to contact the Tennessee Attorney General’s Office by April 30, 2016.

Any Tennesseans who believe they may be eligible to participate in this settlement, or have questions about the settlement, should call the Tennessee Attorney General’s Office at (615) 741-1671.

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Diamond Resorts International Announces 2015 Earnings Conference Call

February 11, 2016, Las Vegas, Nevada – Diamond Resorts International, Inc. (NYSE:DRII) announced today that it will release its fourth quarter 2015 earnings results after the market closes on Wednesday, February 24, 2016, and hold a conference call to discuss the quarter’s results at 5:00 p.m. ET that day.

On the call will be Diamond Resorts President and Chief Executive Officer, David Palmer, and Executive Vice President and Chief Financial Officer, Alan Bentley.

To access the call, dial (888) 753-4238 from the United States, or (706) 643-3355 from outside the U.S. The conference call I.D. number is 44866691.  Participants should dial in 5 to 10 minutes before the scheduled time and must be on a touch-tone telephone to ask questions.

The call will also be available as a live webcast which can be accessed at the Diamond Resorts Investor Relations website at

Diamond Resorts International® manages vacation ownership resorts and sells vacation ownership points for over 350 managed resorts and affiliated properties and cruise itineraries.

Mainstream Media Show Split Personality

The March 2016 Consumer Reports includes an article entitled, “Timeshares Come of Age.” The sub-headline states, “These vacation ownership arrangements are attracting younger, more educated, more affluent buyers, thanks to consumer-friendly changes in the industry.”

The 4-page article points to the “rocky reputation” the industry was marked by in the mid-1970’s because of consumers being lured to attend multi-hour, high-pressure sales presentations, by the offer of enticing gifts.  It goes on to report that industry insiders say that “the industry has become much more consumer-friendly and transparent, and that is largely because of the entrance of major hospitality brands into the industry. Consumers can now avoid the in-person sales pitch by going online to research timeshare properties and even contact sales reps by phone and chat sessions.”

Consumer Reports covers a lot of ground on the trend away from fixed weeks and that consumers should not consider a timeshare purchase as a real estate investment. Randy Conrads, Co-Founder of, is quoted as saying that. “It’s a lifestyle investment, not a financial one.”

The demographics of new buyers,  the economics of ownership and the challenges of selling a timeshare are discussed and the article points to timeshares that are being offered for sale at $1 on many popular resale website. It concludes with mention that owners who “really want out” can turn to companies who charge thousands of dollars to help negotiate the owners’ termination of their obligations.

Now, comes along a January 22, 2016 article written by reporter Gretchen Morgenson of The New York Times with a headline that reads, “The Timeshare Hard Sell Comes Roaring Back.”  Morgenson’s account is focused on Developer Diamond Resorts’ sales presentation and indicates the high-pressure sales tactics may still be alive and well. One owner said that an offer of a $100 gift card was made, but she ended up enduring a 5-hour of Diamond representative pressuring he to give up two of her timeshares deed  for a $30,000 purchase of Diamond’s ownership points. The owner who declined the offer, was handed documents and the end of the presentation, one of which was a copy of a voided charge on her credit card for $4840.00 for which the owner had not given approval.

Jeff Weir, a Diamond owner and Chief Correspondent for RedWeek and contributor to TimeSharing Today, is quoted as saying, “In my experience, Diamond is much more ambitious, aggressive and downright nasty in their sales presentations compared to Marriott and Westin.” He went on to say that Diamond just has an amazing reputation of being tough on people.”

The article does include comments from David F. Palmer, Diamond’s chief executive indicating that Diamond does try to bring fun to its customer interactions, both before an initial sale and once a member buys in.  “Our lifetime subscription model creates a series of systems where you can track that engagement and make sure you are constantly providing a series of experiences that exeed their expectations over many,many years,” he said.

Morgenson interviewed another owner, Walter Hunter. Hunter is a member of the homeowners’ association board at Daytona Beach Regency, a Diamond Resort in Florida. He said that he was pleased with Diamond as the management company. He acknowledged maintenance fees have significantly increased under Diamond, but said, “We are convinced that they are doing a good job.”

The extensive article contains a great deal of relevant information and can be found HERE.

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