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Another Lawsuit Filed Against Wyndham for Timeshare Fraud

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Another Lawsuit Filed Against Wyndham for Timeshare Fraud

New Lawsuit Filed Against Wyndham for Timeshare Fraud –  Jobke v. Wyndham

This law suit (Terry Jobke v. Wyndham Vacations Resorts, 3:15-cv-00038-bbc) was filed on January 20, 2015 by Terry and Lauri Jobke against Wyndham Vacation Resorts.

The Jobke complaint states in part the following:

“Terry and Lauri Jobke, previous Wyndham timeshare owners, responded to an offer made to them while they were at Wyndham’s resort in the Wisconsin Dells on May 4, 2014, which required them to attend a presentation by Wyndham in order to get a restaurant gift certificate. They accepted the offer and met with several Wyndham employees on that date.

At the presentation, Wyndham’s salesperson lied to the Jobkes about his position at Wyndham and the product he was selling. He also failed to inform the Jobkes of critical aspects of the offer he was making, characterizing the offer as a new program which would end the Jobkes liability for ongoing maintenance fees.

The Jobkes, trusting that Wyndham was giving them truthful, complete, and accurate information, agreed to the new program. When the Jobkes learned that Wyndham did not provide truthful, complete and accurate information, they tried to get help from Wyndham but Wyndham would not return their calls.

This is an action for damages, injunctive relief and declaratory relief brought by the Jobkes for Wyndham’s violations of: Wis. Stat. § 100.18(1), governing fraudulent representations; Wisconsin Chapter 707, governing timeshare sales in Wisconsin; civil theft pursuant to Wis. Stat. §§ 943.41(2) and 895.446; Wisconsin Administrative Code ATCP 121 on Referral Selling; and intentional misrepresentation.

The Jobkes seek recovery of their pecuniary loss, actual damages, double damages, treble damages, punitive damages, statutory damages and relief, disgorgement of profits, declaratory relief, injunctive relief, and costs and attorney’s fees. The Jobkes had previously purchased timeshares from Wyndham.

16. On May 4, 2014, a Wyndham employee told the Jobkes that if they attended a two-hour presentation they would get a restaurant gift certificate that they could use at a restaurant in the Wisconsin Dells.

17. The Jobkes agreed to attend the presentation later that day.

18. The presentation turned out to be a high-pressure sales presentation made by Wyndham’s employees in an effort to get the Jobkes to make a purchase of another timeshare.

19. Wyndham’s employees who met with the Jobkes on May 4, 2014 were not honest about the product they were selling and used high-pressure sales tactics and sales techniques which violate the laws of the State of Wisconsin in an effort to get the Jobkes to make a purchase on that day.

20. Wyndham has a pattern and history of training its sales employees to lie, engage in high pressure sales tactics, and use sales techniques that violate the laws of the State of Wisconsin in order to sell timeshares.

21. As of May 4, 2014 Wyndham had knowledge that its Wisconsin Dells sales employees lied to customers in order to make sales.

22. As of May 4, 2014 Wyndham had received complaints from customers alleging that its Wisconsin Dells sales employees lied to customers during sales presentations.

23. As of May 4, 2014 Wyndham had knowledge that its sales employees in other resorts around the United States lied to customers in order to make sales.

24. As of May 4, 2014 Wyndham had received complaints from customers alleging that its sales employees in other resorts around the United States lied to customers during sales presentations.

25. The Jobkes told the Wyndham employees numerous times on May 4, 2014 that they did not want to buy anything new from Wyndham and that they could not afford any additional purchase.

26. At the May 4, 2014, sales presentation, a Wyndham employee made the following untrue, deceptive, and misleading statements and representations to the Jobkes:

A. That he was not a salesman, he was a manager.

B. That he was not going to sell them anything.

C. That Wyndham had a new program whereby the Jobkes’ monthly maintenance fees would have an end date.

D. That under the new program the Jobkes maintenance fee obligation would end when they finished making loan payments.

E. That, as part of the new program being offered, Wyndham would combine the Jobkes’ outstanding loan amounts on their current Wyndham timeshares, so that the resulting monthly payment would only be approximately $50 more than they were currently paying on the outstanding loan amounts.

F. That the new program would be based in Wisconsin.

G. That he was throwing in an extra 210,000 timeshare points as an incentive for them to enter the new program.

H. That under the new program all of the Jobkes’ maintenance fee obligations would end on the date the new loan was paid off.

I. That under the new program the Jobkes would end up with only one payment a month to Wyndham.

J. That under the new program the Jobkes maintenance fee obligations would be wrapped into their new loan payment.

K. That under the new program Wyndham would buy back any unused timeshare points from the Jobkes at the rate of $8.00 per thousand points, only if the Jobkes took advantage of the new program that day.

L. That the May 4, 2014 presentation would last two hours.

M. That the offer Wyndham presented to the Jobkes was good only for that day.

27. All of the above statements were not true but made by Wyndham with the intention of inducing Terry and Lauri Jobke to make a purchase that day. The Jobkes believed the statements and relied on them and agreed to enter the new program.

28. The Wyndham representative crunched numbers on a piece of paper and later told the Jobkes that luckily this program would only cost them an additional $32.00 a month above what they were currently paying, rather than the $50 figure provided earlier.

29. As part of the sales presentation on May 4, 2014 Wyndham’s employees used a referral selling plan whereby Wyndham asked Terry and Lauri Jobke for names of people that Wyndham could solicit to attend sales presentations and make purchases, and in exchange offered the Jobkes monetary payments or credits that would pay their maintenance fees. The benefits Wyndham promised the Jobkes for making referrals were not given to the Jobkes before Wyndham used the referral selling plan.

30. Based on all of the information provided by Wyndham on May 4, 2014 Terry and Lauri Jobke agreed to the new program as represented to them.

31. A Wyndham salesperson and a Wyndham document signer met with the Jobkes on May 4, 2014 and engaged in a confusing and misleading presentation of documents related to the new program.

32. The Jobkes were presented with multiple documents, contracts, disclosure forms, booklets, catalogs, and other forms. Rather than give the Jobkes the opportunity to take the pile of documents home to read and review and/or get the advice of an advisor or attorney, Wyndham’s employees rushed Terry and Lauri Jobke through signing on May 4, 2014 and gave brief or no descriptions of the content of the documents. Instead, a Wyndham employee simply indicated places on the forms where signatures and initials were required. Wyndham engaged in this conduct to hide the true nature of the documents and the transaction.

33. Terry and Lauri Jobke entered into a WB-26 Timeshare Contract and addenda with Wyndham, among other documents presented to them on May 4, 2014. According to the WB-26Timeshare Contract, Terry and Lauri Jobke paid a cash down payment of $30,625.18 on May 4, 2014.The WB-26 Timeshare Contract also contained the following terms, among others: Cash Price-$94,466.00; Amount Financed- $64,189.82; Finance Charge – $53,225.38; Closing Costs – $662.50;Total Sales Price – $148,040.38. Also according to the WB-26 Timeshare Contract, Terry and Lauri Jobke would be paying 13.38% interest. They would have to make 120 monthly payments in the amount of $978.46.

34. Under the terms of the May 4, 2014 timeshare contract, the Jobkes are also liable for maintenance fees in an amount of no less than $3,781.44 each year, in perpetuity. The Jobkes have made several monthly maintenance fee payments to date.

35. Many of the representations which were made to Terry and Lauri Jobke at the presentation conflict with or contradict terms of the documents Wyndham had the Jobkes sign on May 4, 2014.

36. Wyndham did not provide Terry and Lauri Jobke with all disclosures required by Wisconsin law including, but not limited to, the disclosures required to be in the Timeshare Disclosure Statement.

37. Wyndham knew that Terry and Lauri Jobke would not receive the benefits of the new program that Wyndham promised at the sales presentation.

38. The documents that Wyndham provided to the Jobkes contain inconsistent and contradictory notices of cancellation rights.

39. One document that Wyndham presented to the Jobkes indicates that Wyndham gave the Jobkes a discount of $56,534.00 on the new program. The Jobkes were not told that they were making a new purchase or that Wyndham was providing a discount to them.

40. The natural effect of Wyndham’s sales practices caused Terry and Lauri Jobke to misunderstand the true nature of the transaction and their rights and duties under the transaction.

41. Wyndham had an obligation of good faith in regards to the timeshare contract with Terry and Lauri Jobke and the duties within Chapter 707 and failed to comply with that obligation.

42. Upon information and belief, Wyndham never recorded the WB-26 Timeshare Contract, or any other documents evidencing the timeshare transaction, with the Sauk County Register of Deeds.

43. After realizing they had been lied to by Wyndham’s employees, Terry and Lauri Jobke contacted Wyndham to try to resolve the problems but could not get a satisfactory response from Wyndham.

44. Terry and Lauri Jobke bought the timeshare points for personal, family or household purposes and not for any business or commercial purposes.

45. To this day Wyndham wrongfully retains funds belonging to Terry and Lauri Jobke.

46. Terry and Lauri Jobke have suffered actual damages as a result of Wyndham’s actions.

47. Wyndham acted maliciously toward the Jobkes and intentionally disregarded their rights.

48. Wyndham engaged in the same conduct with regard to other purchasers and the sales tactics used to get Terry and Lauri Jobke to sign documents are Wyndham’s usual and customary practices.

49. At all times relevant to this lawsuit all Wyndham employees who interacted with Terry and Lauri Jobke or who worked on their timeshare transaction were agents of Wyndham.”


New lawsuit filed against Wyndham for timeshare fraud – Morrison v. Wyndham

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New lawsuit filed against Wyndham for timeshare fraud – Morrison v. Wyndham

Owners file law suit against Wyndham for timeshare fraud – Morrison v. Wyndham

A Class Action has been filed in Missouri against Wyndham Vacation Resorts, et. al. (Case No. 6:14-cv-3452 Morrison v. Wyndham Vacation Resorts, Inc.) by Clyde and Martha Morrison alleging violations of federal and state laws arising from Wyndham’s dilution of timeshare points and other fraudulent sales practices.

Morrison v. Wyndham is a classic case depicting the tactics used by Wyndham to procure the sale of additional timeshare points, known as upgrades.  The following provides a summary of the Morrison’s case.

The Morrison’s state they were injured by Wyndham in Branson, Taney County, Missouri as a result of Wyndham’s fraudulent activity.  Plaintiffs Clyde E. Morrison and Martha A. Morrison (“Plaintiffs”), husband and wife, are retired senior citizens residing in Raymore, Cass County, Missouri.

Wyndham develops, markets, and sells timeshares and timeshare interests in vacation properties throughout the United States, including Missouri.  Wyndham is not a traditional timeshare exchange where time intervals are sold, exchanged, or traded for a designated period of use at a particular resort, hotel, or other accommodation.  Instead, under Wyndham’s timeshare program, owners receive a symbolic point allocation based upon the level of their ownership interest.

Unlike the traditional timeshare exchange where only a finite number of time intervals can be sold, the point-allocation system allows Wyndham to sell an infinite number of points that are not limited by the number of time intervals actually available for use and occupation.  Wyndham profits from the sale and/or financing of timeshare points.

Owners pay a monthly homeowner’s association maintenance fee that is calculated as the number of points held multiplied by a dollar rate rather than as the owners’ proportional share of the homeowner’s association total actual expenses.  The dollar rate used to calculate monthly maintenance fees has steadily increased from year to year.

The timeshare points are renewed annually and are used to reserve accommodations through a reservation system owned, maintained, and managed by Wyndham. Owners must use their allotted points within 12 months or the points expire.

To create an incentive for owners to purchase additional timeshare points from Wyndham rather than from other owners or other sources, Wyndham created a “VIP” program with various levels of membership that purports to provide special benefits and preferential treatment for “VIP” members, including, but not limited to, advance priority booking of accommodations. To be eligible for the “VIP” program, owners must have purchased a certain number of timeshare points directly from Wyndham or from a Wyndham affiliate.

Although timeshare points may be purchased from other owners or other sources, such points do not count towards participation in the “VIP” program.

The Morrison complaint explains how Wyndham has Diluted of the Value of Timeshare Points.  In 2008, Wyndham, the Fairshare Vacation Owners Association (“VOA”), and other Wyndham affiliates executed a second-amended trust agreement setting forth the rules governing the sale, exchange, and use of Wyndham’s timeshare points.

The VOA receives revenue from the collection of monthly maintenance fees.

Upon information and belief, at all relevant times, the VOA has had a board of three non-elected directors, all of whom are also officers, agents, and/or employees of Wyndham.  To amend the trust agreement provisions governing the sale, exchange, and use of Wyndham’s timeshare points, Wyndham and the VOA board members must vote to do so.

Owners of Wyndham timeshare points are beneficiaries of the trust and members of the VOA.  Although the trust agreement states the total number of points required to reserve all accommodations shall always equal or exceed the total number of points allocated to all owners, the trust agreement does not limit the number of points Wyndham may sell and allocate and does not limit Wyndham from giving preferential treatment to owners who purchase points directly from Wyndham or a Wyndham affiliate.

Upon information and belief, Wyndham has sold and allocated points grossly unrelated to and in excess of the number of time intervals actually available for use and occupation such that the value of timeshare points has been diluted and/or nullified.

As a result, an owner who wishes to get out of the monthly maintenance fees may be forced to sell his/her points at a fraction of the price paid to Wyndham.  For example, as of September 4, 2014, 1,000,000 Wyndham annual timeshare points can be purchased from other owners for $5,500.00 or less, whereas Wyndham was selling 1,000,000 annual points for approximately $165,000.00 on September 5, 2012.

The Morrison’s also state that Wyndham had Knowledge of and Endorsed the timeshare fraud.  To increase its sales of timeshare points, Wyndham lures potential customers into attending aggressive sales presentations by offering them free dinners, free gifts, or other free benefits.

Wyndham’s sales presentations are high speed, high pressure, and are designed to induce attendees to sign contracts for the purchase and/or financing of timeshare points before the attendees leave the presentation, which can last two to three hours. Upon information and belief, Wyndham’s sales agents are paid commissions and/or receive monthly bonuses based on how many timeshare points they sell in a given month.

At all relevant times, Wyndham had actual knowledge that its sales agents were making false and/or fraudulent representations to intentionally mislead potential customers about the terms of Wyndham’s timeshare contracts in order to induce sales.

The Morrison case then references a case recently filed in California by several former Wyndham employees.  Patricia Williams wa a former Wyndham employee who allegedly was fired by Wyndham after reporting to Wyndham in 2010 that Wyndham’s sales agents were committing fraud.

According to Patricia Williams, Wyndham’s sales agents target senior citizens because they are perceived as vulnerable.  According to Patricia Williams, Wyndham’s sales agents falsely represent that if timeshare owners purchase additional points and/or upgrade their ownership interest, their monthly payments and maintenance fees will be reduced and/or capped when, in reality, such payments will merely be deferred and subject to increases.

According to Patricia Williams, Wyndham’s sales agents encourage owners to upgrade their timeshare ownership interest by advising them they will be able to enroll in a guaranteed buy-back program, even though no such program exists.

According to Patricia Williams, Wyndham’s sales agents enroll customers in a “Bill-Me-Later” program without disclosing that the program will make them ineligible for a refund.  According to Patricia Williams, Wyndham’s sales agents falsely promise customers that by purchasing additional points, they will be able to “rent out” their points and generate sufficient income to cover their monthly maintenance fees.

According to Patricia Williams, Wyndham’s sales agents deceive timeshare owners into purchasing additional points by telling owners that by signing certain papers they can “re-negotiate” their existing loans when, in reality, the owners were signing credit card applications to maximize the available credit for taking on additional loans and purchasing additional points.

According to Patricia Williams, Wyndham encourages its sales agents to engage in such fraudulent conduct in an effort to drive additional sales.

Marty Whitney is a former Wyndham employee who allegedly was fired by Wyndham after reporting to Wyndham that Wyndham’s sales agents were committing fraud.  According to Marty Whitney, Wyndham’s sales agents trick senior citizens into signing contracts for the purchase of timeshare points.

According to Marty Whitney, Wyndham’s sales agents prey on the elderly and/or those who are easily overwhelmed and confused by complicated legal documents and fine print.

According to Marty Whitney, Wyndham instructs its sales agents that as long as people can walk in, be on a walker, or be in a wheelchair, it does not matter if they know or understand the contracts they are signing.

According to Marty Whitney, Wyndham told her to keep her mouth shut about the fraudulent practices or she would be fired.

The Morrison Plaintiffs are senior citizens who retired in 2008.  In 2008, Plaintiffs purchased a timeshare from Wyndham and applied for a Wyndham Rewards Visa credit card (the “2008 Wyndham Rewards Visa”) in order to take advantage of various programs offered by Wyndham.

In return, Plaintiffs received 777,000 contract points plus 105,000 “bonus” contract points for use at Wyndham.   The purchase of timeshare points was financed through Wyndham.

On or about September 5, 2012, while vacationing in Branson, Missouri, Wyndham offered a free dinner to Plaintiffs if they agreed to attend a sales presentation.  During the September 5, 2012 presentation, Wyndham’s sales agents advertised, represented, advised, suggested, and implied that Plaintiffs may be eligible to re-negotiate their existing loan with Wyndham and to obtain more favorable terms and benefits if they would just fill out a new credit application.

During the September 5, 2012 presentation, Wyndham’s sales agents aggressively encouraged Plaintiffs to trade in their old timeshare points and to purchase new points from Wyndham through a special, limited-time offer.

During the September 5, 2012 presentation, Wyndham’s sales agents advertised, represented, advised, suggested, and implied that the special, limited-time offer was only open and had to be accepted before leaving the presentation.  During the September 5, 2012 presentation, Wyndham’s sales agents advertised, represented, advised, suggested, and implied to Plaintiffs that if they traded in their existing timeshare points and purchased new points right then and there, Plaintiffs would be upgraded to the “Platinum” level of Wyndham’s “VIP” program, which, among other things, would guarantee Plaintiffs’ monthly maintenance fees would be capped and would not increase any further over time.

During the September 5, 2012 presentation, Wyndham’s sales agents advertised, represented, advised, suggested, and implied to Plaintiffs that if they traded in their existing timeshare points and purchased new points right then and there, they would receive a promotional “ONE YEAR PRICE FREEZE,” meaning that any future purchases of additional timeshare points made by Plaintiffs before September 5, 2013 would be “locked in” at the price such points were selling for on September 5, 2012.

During the September 5, 2012 presentation, Wyndham’s sales agents advertised, represented, advised, suggested, and implied to Plaintiffs that if they traded in their existing timeshare points and purchased new points right then and there, Plaintiffs would be able to generate rental income by renting out their unused timeshare points.

During the September 5, 2012 presentation, Wyndham’s sales agents advertised, represented, advised, suggested, and implied to Plaintiffs that Wyndham had expert and superior knowledge about the resale market for Wyndham timeshare points and that the demand was high and the supply was low.

During the September 5, 2012 presentation, Wyndham’s sales agents advertised, represented, advised, suggested, and implied to Plaintiffs that Wyndham was aware of dozens of people who were able to generate sufficient rental income from their unused timeshare points to cover their monthly maintenance fees.

During the September 5, 2012 presentation, Wyndham’s sales agents advertised, represented, advised, suggested, and implied to Plaintiffs that if they were unable to afford the required down payment but did not want to miss out on the special, limited-time offer, they could defer all or a portion of the required down payment through a “Bill Me Later” program.

On September 5, 2012, as a result of Wyndham’s sales presentation, Plaintiffs were induced to fill out credit applications and to participate in the special, limited-time offer because Plaintiffs were interested in stabilizing their monthly fees and were interested in purchasing additional points in the future at that day’s price.

On September 5, 2012, as a result of Wyndham’s sales presentation, Plaintiffs were induced to execute a “ClubWyndham Access Vacation Ownership Plan Equity Trade Agreement and Addendum” (“2012 Trade Agreement”) trading in 777,000 existing timeshare points for 1,000,000 new points.

On September 5, 2012, as a result of Wyndham’s sales presentation, Plaintiffs were induced to execute a “ClubWyndham Access Vacation Ownership Plan Retail Installment Contract Purchase and Security Agreement” (“2012 Security Agreement”) purchasing and financing 1,000,000 points through Wyndham for a total price of $164,824.00 at a rate of 11.49% per annum.

On September 5, 2012, Plaintiffs received $67,148.03 in trade equity for their existing 777,000 timeshare points.  On September 5, 2012, as a result of Wyndham’s sales presentation, Plaintiffs were induced to execute an “Acknowledgment of Application for and Use of a Bill Me Later Account” (“2012 Bill Me Later Acknowledgement”) financing Plaintiffs’ down payment of $10,397.31 to Wyndham at a rate of 19.99% per annum and containing releases of liability and other terms and conditions.

On September 5, 2012, as a result of Wyndham’s sales presentation, Plaintiffs were induced to execute a “Contract Addendum” (“2012 Contract Addendum”) modifying the 2012 Security Agreement and stating that Plaintiffs have the option to pay the loan balance within 30 days with no interest due and/or to increase the down payment within 30 days to receive a lower interest rate or monthly payment.

On September 5, 2012, in the 2012 Security Agreement, Wyndham charged Plaintiffs $30.00 as a “closing fee” and an additional $349.00 fee to cover “the administration and preparation of various documents related to the sale.”

On September 5, 2012, during this transaction, Plaintiffs provided their credit card information to Wyndham and authorized Wyndham to charge Plaintiffs’ 2008 Wyndham Rewards Visa credit card a one-time amount of $1,237.77 and in monthly installments of $451.67.

On September 5, 2012, Wyndham provided to Plaintiffs at the point of sale and transaction a printed receipt that contains and reveals the expiration date (month and year) of Plaintiffs’ credit card in three different places.

On or about August 16, 2013, while vacationing in Branson, Missouri, Wyndham offered a free dinner to Plaintiffs if they agreed to attend a sales presentation. During the August 16, 2013 presentation, Wyndham’s sales agents advertised, represented, advised, suggested, and implied that Plaintiffs may be eligible to re-negotiate their existing loan with Wyndham and to obtain more favorable terms and benefits if they would just fill out a new credit application.

During the August 16, 2013 presentation, Wyndham’s sales agents aggressively encouraged Plaintiffs to trade in their existing timeshare points and to purchase new points from Wyndham through a special, limited-time offer.

During the August 16, 2013 presentation, Wyndham’s sales agents advertised, represented, advised, suggested, and implied that the special, limited-time offer was only open and had to be accepted before leaving the presentation.

During the August 16, 2013 presentation, Wyndham’s sales agents advertised, represented, advised, suggested, and implied to Plaintiffs that if they traded in their existing timeshare points and purchased new points right then and there, Plaintiffs would be eligible for enrollment in a “Pathway” program, which, among other things, would guarantee that Wyndham would buy back Plaintiffs timeshare points if Plaintiffs ever wanted to sell their points.

During the August 16, 2013 presentation, Wyndham’s sales agents advertised, represented, advised, suggested, and implied to Plaintiffs that if they applied for a new Wyndham Rewards Visa credit card right then and there, Plaintiffs would be eligible for enrollment in a “Pathway” program, which, among other things, would guarantee that Wyndham would buy back Plaintiffs timeshare points if Plaintiffs ever wanted to sell their points.

During the August 16, 2013 presentation, Wyndham’s sales agents advertised, represented, advised, suggested, and implied to Plaintiffs that if they traded in their existing timeshare points and purchased new points right then and there, they would receive a promotional “ONE YEAR PRICE FREEZE,” meaning that any future purchases of additional timeshare points made by Plaintiffs before August 16, 2014 would be “locked in” at the price such points were selling for on August 16, 2013.

During the August 16, 2013 presentation, Wyndham’s sales agents advertised, represented, advised, suggested, and implied to Plaintiffs that if they traded in their existing timeshare points and purchased new points right then and there, Wyndham would assist Plaintiffs in transferring their ownership interests into the Clyde E. Morrison, Martha A. Morrison Trust.

During the August 16, 2013 presentation, Wyndham’s sales agents advertised, represented, advised, suggested, and implied to Plaintiffs that if they were unable to afford the required down payment but did not want to miss out on the special, limited-time offer, they could defer all or a portion of the required down payment through a “Bill Me Later” program.

On August 16, 2013, as a result of Wyndham’s sales presentation, Plaintiffs were induced to fill out credit applications and to participate in the special, limited-time offer because Plaintiffs were interested in participating in the advertised “Pathway” program, transferring their ownership interests into the Clyde E. Morrison, Martha A. Morrison Trust, and purchasing additional points in the future at that day’s price.

On August 16, 2013, as a result of Wyndham’s sales presentation, Plaintiffs were induced to execute a “ClubWyndham Access Vacation Ownership Plan Equity Trade Agreement and Addendum” (“2013 Trade Agreement”) trading in 1,000,000 existing timeshare points for 1,189,000 new points.

On August 16, 2013, as a result of Wyndham’s sales presentation, Plaintiffs were induced to execute a “ClubWyndham Access Vacation Ownership Plan Retail Installment Contract Purchase and Security Agreement” (“2013 Security Agreement”) purchasing and financing 1,189,000 points through Wyndham for a total price of $221,885.00 at a rate of 11.49% per annum.

On August 16, 2013, Plaintiffs received $80,723.15 in trade equity for their existing 1,000,000 timeshare points.  On August 16, 2013, as a result of Wyndham’s sales presentation, Plaintiffs were induced to execute an “Acknowledgment of Application for and Use of a Bill Me Later Account” (“2013 Bill Me Later Acknowledgement”) financing Plaintiffs’ down payment of $14,983.21 to Wyndham at a rate of 19.99% per annum and containing releases of liability and other terms and conditions.

On August 16, 2013, as a result of Wyndham’s sales presentation, Plaintiffs were induced to apply for a new Wyndham Rewards Visa credit card (the “2013 Wyndham Rewards Visa”).

On August 16, 2013, in the 2013 Security Agreement, Wyndham charged Plaintiffs $30.00 as a “closing fee” and an additional $349.00 fee to cover “the administration and preparation of various documents related to the sale.”

On August 16, 2013, during this transaction, Plaintiffs provided their credit card information to Wyndham and authorized Wyndham to charge Plaintiffs’ 2013 Wyndham Rewards Visa credit card a one-time amount of $1,785.89 and in monthly installments of $541.99.

On August 16, 2013, Wyndham provided to Plaintiffs at the point of sale and transaction a printed receipt that contains and reveals the expiration date (month and year) of Plaintiffs’ credit card in three different places. On August 20, 2013, Plaintiffs executed an “Extract of Trust Instrument” along with a cover letter (“2013 Extract of Trust Instrument and Letter”) drafted and prepared by Wyndham requesting a “Wyndham Title Services Representative” to “deed the [Plaintiffs’ timeshare ownership interest] into the name of our Trust,” i.e., the Clyde E. Morrison, Martha A. Morrison Trust.

On August 20, 2013, Plaintiffs were not charged any additional processing/closing fee because the executed “Extract of Trust Instrument” and cover letter were provided to Wyndham within 15 calendar days of the original $30.00 “closing fee” and $349.00 fee covering “the administration and preparation of various documents related to the sale” paid to Wyndham on August 16, 2013.

Finally, and most importantly, the Morrison’s state that Wyndham has completed identical or substantially similar timeshare ownership sales transactions with hundreds or thousands of other individuals.  Consequently, Plaintiffs brought this action on their own behalf and on behalf of a class of all persons similarly situated.


Wyndham’s Board of Directors Had Better Stop the Timeshare Fraud

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Wyndham’s Board of Directors Had Better Stop the Timeshare Fraud

Asking Wyndham’s Board of Directors to Stop the Timeshare Fraud

Leaving aside for the moment the inherent fact that timeshares are in and of themselves a creation to sell nothing for something, and the fact that without lying it would be utterly impossible to sell what is in essence the significantly overpriced advanced payment for vacations that one may or may not actually ever be able to take in the future – we are left with the many sordid schemes and program scams Wyndham develops each year to ensnare more and more unfortunately uninformed seniors into the life-long abyss that is a Wyndham timeshare.

A Wyndham timeshare contract is a forever or else contract.  You either keep paying Wyndham FOREVER or you lose your entire investment (equity plus fees, etc.), with the kicker that your credit will also be ruined for the rest of your life.  And make no mistake, every single person that works for Wyndham, from the Board and Executives down to the lowly sales person, knows exactly what they sell and how they manage to sell it.  Or do they?

While some of Wyndham’s wealthy, “respectable,” and “reputable” Board members may not be aware of the day to day nuts and bolts of how Wyndham succeeds in selling more and more trash to the same people – they know or should know just the same.  It’s interesting to look at the composition of Wyndham’s Board comprised of Stephen Holmes, Myra J. Biblowit, Brian Mulroney, George Herrera, James Buckman, Michael Wargotz, and Pauline Richards.  Oddly enough all directors are outside directors except Wyndham World Wide’s CEO Stephen Holmes.

And judging from Wyndham’s holding company structure, even Mr. Holmes can avoid getting his hands very dirty, operating the controversial timeshare business out of the Wyndham Vacation subsidiary and delegating all of the dirty work to others.  Im sure when Wyndham eventually gets properly investigated, Holmes and the other Board members will plead ignorance to what Franz Hanning and HIS people are doing.

One wonders why the Board would keep Hanning and other unsavory characters around.  The simple answer is Hanning, etc. do a great job of violating countless consumer protection laws while avoiding for the most part any liability.  It’s always the poor elderly couples fault; they just got confused as to what the sales people actually told them.  The other and possibly more important reason Wyndham Vacation’s people are kept around is plausible deniability.  If and when investigators find out what Wyndham actually is and does, the Board can side with the shocked members of government agencies and Wall Street supporters with the mantra – We had no idea Franz and his people were allowing such evil to be perpetrated against all these poor senior citizens; shame on him.

We’d all like to think Wyndham’s outside six Board members are in the dark on all this; that Stephen has carefully kept such “baseless accusations” from ever appearing in their inboxes.  Perhaps the Board members just think Wyndham’s timeshare business is simply a very successful legitimate enterprise which makes available to them huge income opportunities from the exercise of their many stock options.  The problem I have is that these Board members are well educated successful business people that should know the old adage “if it looks too good to be true it probably is.”  In any event, whether the Board is truly without any knowledge that half of Wyndham’s revenue is derived from a con game, they SHOULD know.  After all, that’s their fiduciary duty to their shareholders – made up primarily of insiders and institutional investors who only care about WYN stock hitting 90 and 100 soon.  And maybe that’s the answer, the shareholders just want this party called Wyndham stock to keep going, and don’t care how Stephen and Franz make it happen.

In any case, Wyndham keeps on selling air to people who already have plenty of it, its Officers and Directors keep selling stock for enormous returns, and the trusting members of our “greatest generation” keep getting hurt while ensnared in Wyndham’s timeshare tornado.

And unfortunately, no one that is in the know about Wyndham’s con game really knows what to do about it.  Sure we can write more letters to State AG’s and other agencies, ding Wyndham again on BBB, or file a law suit, but Wyndham has that part of the world convinced the “con game” is untrue and that the real problem is the timeshare aftermarket, filled with unscrupulous people who operate black market reseller, rental and termination companies.  Yes, there the real problem – not Wyndham.

So the investigators smile and look the other way, convinced that a Fortune 300 company simply could not be involved in anything so terrible.  You know, these are the same investigators and Wall Street executives that were convinced that other large public companies such as Enron, WorldCom, Tyco, AIG, Lehman, HealthSouth, Adelphia, Global Crossing, etc. also could never do anything wrong.  After all, like the SEC investigators always say with surprise, “they’re a public company with strong board and regulatory oversight, how could this have ever happened.  Well, if we learn anything from the past, it happens when the Board Members are busy looking the other way, counting and recounting their stock gains.


Wyndham Sales Practices Violate Numerous Credit Related Laws

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Wyndham Sales Practices Violate Numerous Credit Related Laws

Wyndham Sales Practices Violate Numerous Credit Related Laws

It has long been rumored that Wyndham Sales agents routinely completed credit applications for their sales prospects (for third party credit accounts such as PayPal, Barclays and Bank of America Credit Cards) without the prospective owner’s knowledge or consent.  However, when Wyndham changed its commission plan for sales people a few years ago, the above described practice got way out of control.

The revised Wyndham compensation plan allowed the agent to get significantly higher commissions for all cash sales (paid in full at closing), or sales where the prospect paid a large deposit (percentage of the purchase price) at closing (e.g. 50%).  The new opportunity to make greater commissions has resulted in the aggressive push by Wyndham sales representatives to qualify every prospect for third party credit, resulting potentially in a fully paid timeshare closing, or at least a substantial down payment.

Unfortunately for the sales person, when they asked the prospect if they would like to pay for the timeshare by going thousands of dollars in debt to 3 or more creditors, the customer would start looking for the nearest door.  So instead, the sales people made that decision for them by completing credit applications on behalf of the client, thereby securing one or more credit accounts in the client’s name that would be used to pay for the timeshare.  At closing, the Sales Person would fly threw the signing of 100 pages of documents, telling the upgrading owner that they qualified for no down-payment, etc.  The unsuspecting owner often wouldn’t know they had just obtained two or three more credit cards or credit accounts (charged up to each cards credit limit) till the bills started arriving in the mail month(s) later.

Unfortunately for Wyndham and its sales force, this conduct violates far too many laws to recite in this article, not to mention constitutes intentional financial fraud on both the timeshare owner AND the third party creditors.  As far as the owner is concerned, such activity by Wyndham violated numerous federal statutes including the Truth in Lending Act (“TILA”), Federal Credit Practices Rule, Federal Credit Reporting Act (“FCRA”), Federal Debt Collection Practices Act (“FDCPA”), Electronic Fund Transfer Act, Fair Credit Billing Act, Rights to Financial Privacy Act, not to mention all of the mortgage related federal laws that regulate creditor transactions.

Also, the creditors such as Bank of America or PayPal (Bill Me Later) may soon start asking why the new accounts signed up by Wyndham have such a high default rate.  If such an investigation is conducted by a bank, they will also find another dirty secret of Wyndham’s operation.  When Wyndham’s sales people complete the credit applications, they tend to, in the words of a Wyndham Whistle-blower, “make the clients financial condition looks so much better than it is.”  According to another sales person, “if their credit looks weak, it’s not uncommon for the owner’s income to rise by a zero or two.”

Finally, because the prospective buyer or upgrading owner isn’t exactly aware they are getting new credit cards, etc., the transaction also violates disclosure provisions in various laws.  For example, under the Truth in Lending Act (“TILA”), a creditor or issuer must provide comprehensive disclosures when the new credit is solicited or opened.  Regrettably, such required disclosures do not occur “during” a Wyndham timeshare transaction.  While our investigation found that some buyers may eventually receive information from the creditor by mail weeks or months later, the prospect is not provided the disclosures when required by law – “with a solicitation or an application.”  The whole point behind the disclosure requirements is to provide the potential debtor with adequate information BEFORE entering into a credit agreement so that they will be able to make a “fully informed” credit decision.

While Wyndham’s sales activities violate numerous laws (e.g. Wyndham timeshare owners are not informed about the legally required mortgage rescission period), this paper is not intended to be a law review article on Consumer Financial Protection Laws.  Instead, this article is provided for three purposes: 1) To warn Wyndham’s prospective timeshare buyers of these illegal sales tactics; 2) To call upon Wyndham to put an end to these activities; and 3) To inform previous buyers that they may have one or more legal causes of action against Wyndham and its sales agents.

Website Note:  We selected this article to republish because we believe the fraud depicted is a routine pattern and practice at Wyndham.  Sales fraud has become inherent throughout Wyndham Vacation Ownership and needs to be stopped.  It is time for Wyndham’s Board of Directors to take a stand against this corporate corruption.  We believe the failure on the Board’s part to root out these practices constitutes a breach of their fiduciary duty to Wyndham’s shareholders, and in our opinion makes them culpable for the company’s fraudulent practices. Each of the following are responsible as Board Members – Stephen Holmes, Myra J. Biblowit, Brian Mulroney, George Herrera, James Buckman, Michael Wargotz, Pauline Richards, as well as all Directors and Officers of Wyndham Vacation Ownership including Franz Hannng and Ryan Morettini.

We also call on all attorneys at Wyndham to stop fighting these poor elderly seniors that did nothing but rely on the misrepresentations of your sales people to their very destructive detriment.  You add insult to injury when you drag out their administrative or legal claims.   Wyndham Lawyers Scott McLester, Lynn Feldman, Gregory John Bendlin, Charles Bott, Thomas Alan, Ryan Morettini and all the other Wyndham lawyers need to start having some compassion on these poor elderly people!  Your Sales Force has lied and deceived these owners relentlessly.  You know these claims and complaints are truthful.  You should do the right thing and pay back these innocent people for the wrongs perpetrated by your client – Wyndham!

Finally, we call on the outside counsel that represents Wyndham in the many lawsuits filed across the nation.  Lawyers such as the following should take notice that participating in a cover up of such activities is at a minimum a violation of your professional code of conduct, and may constitute much more significant legal breaches.

Kaitlyn M Burke, Littler Mendelson, PC

Patrick H. Hicks, Littler Mendelson, PC

Kent Michael Fandel, Graham & Dunn PC

Daniel J. Oates, Graham & Dunn PC

Eugene (Gene) Podesta, Jr., Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

Donald E. Christopher, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

Sara M Turner, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

Joy A. Boyd, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC (Nash)

Andrew W. Coffman, King & Ballow

R. Douglas Hanson, King & Ballow

R. Eddie Wayland, King & Ballow

Stephanie Leigh Adler-Paindiris, Jackson Lewis LLP

Juan C Lopez-Campillo, Jackson Lewis LLP

Jessica DeBono Anderson. Jackson Lewis, PC

Mary Ruth Houston, Shutts & Bowen, LLP

Paul J. Scheck, Shutts & Bowen, LLP

James J. Henson, Shutts & Bowen, LLP


Wyndham’s Timeshare Schemes – Why Wyndham Timeshare Owners Upgrade

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Wyndham’s Timeshare Schemes – Why Wyndham Timeshare Owners Upgrade

Wyndham’s Timeshare Schemes – Why Wyndham Timeshare Owners Upgrade – Pain v. Pleasure Tactic  (Reprinted From Real Estate News)

When I first started researching the timeshare industry in general, and Wyndham’s timeshare division in particular, my reaction was similar to most – how could these people continue to buy such trash.  Its one thing to be duped into buying the “Discovery” program, but these same people continue to upgrade (buying more points) against what they will confess is their better judgment.

When I was first told by Wyndham timeshare owners that Wyndham’s timeshare business was built on fraud and deception I was very surprised.  After all, those of us who are not familiar with timeshares or Wyndham’s timeshare business know “Wyndham” to be a high end hotel brand.  But when one looks more carefully at Wyndham, one finds some very interesting facts.  First, over half of Wyndham’s revenue comes from its more controversial timeshare division.  In fact, if you add to that its Vacation Exchange division, comprised mostly of RCI (an equally controversial timeshare exchange business), one finds that a small percentage of Wyndham’s revenue is actually generated by its higher end hotel division.

So that seems to explain why so many people, almost one million, would even consider purchasing a Wyndham timeshare – they walk in thinking they are being pitched by a reputable high end hospitality company.  However, Wyndham Vacation Ownership (WVO), Wyndham’s timeshare brand, is run by a very different brand of people.  WVO is run top to bottom by sales people – the types of sales “experts” that can sell the proverbial ice to the eskimo.   Because that’s really what they do – they sell more and more timeshare points to people that already own plenty of timeshare points.

The following fact may surprise many readers.  Over 70% of all Wyndham’s timeshare sales are to EXISTING timeshare owners.  At first glance I thought this must mean that Wyndham’s members really enjoy owning Wyndham timeshare points – right?  That couldn’t be farther from the truth.  In fact, Wyndham always quotes an old ARDA report that claims 83% of all timeshare owners are pleased with their timeshares.  Wow – 83%.  That almost seems impressive except for two facts.  First, ARDA is the trade association (lobbyist) for the big timeshare developers like Wyndham – so its not exactly a neutral source.  Second, Wyndham should actually be embarrassed by this statistic (they use this same study in every annual report apparently to evidence to their investors that their owners love them).  Since Wyndham has about a million owners, this study reveals that at the very least 170,000 don’t appreciate being Wyndham timeshare owners.

But – it gets worse.  After a little research one discovers that this ARDA data was actually submitted by their clients – the timeshare developers.  One now has to wonder just how much this 83% was inflated.  Take Wyndham for instance, their data comes from their very own client surveys – allegedly completed by timeshare owners following a purchase.  But…that’s not all together true.  Upon interviewing numerous current and former Wyndham sales representatives, one begins to hear the same sordid practice.  The majority of sales people interviewed said that they, the sales person, actually complete the survey.  Encouraged by their managers to ensure high ratings, the sales people fill out the customer surveys.  Well, there we have it.  The number of dissatisfied Wyndham timeshare owners is probably a multiple of the 170,000 (my guess is over 300,000 dissatisfied owners).

But, all this digresses from the purposes of this paper – answering the question of WHY Wyndham timeshare owners continue to buy more timeshare points.   After all, these timeshare junkies know that timeshares are largely worthless – but they just can’t seem to stop themselves.  This timeshare schizophrenia (failure to recognize what is real or false) is hard to understand until one really delves into the details of the timeshare system itself.

After researching Wyndham’s timeshare division, the reasons for this self-perpetuating addiction to timeshare upgrades slowly began to reveal themselves.  This research will be presented in 10 parts, each designed to explain and support one contention.  The following begins our findings.

Number 1 – Psychology of Pain and Pleasure – The first reason Wyndham timeshare owners continue to upgrade their timeshares are what we’ve entitled the Pain v. Pleasure Tactic.  Every timeshare owner was asked why they would continue to subject themselves to the long and arduous high pressure sales meetings.   Everyone’s response is generally the same – they are forced into these meetings every time they try to use the timeshare they’ve already purchased.  In other words, these owners go to use their timeshare at a Wyndham resort and are coerced and badgered until they attend what is normally called an “owner update” meeting.  I’ve yet to find an owner that says they in any way appreciate these update meetings.

These meetings have nothing to do with helping the owner use their existing timeshare, and everything to do with selling more timeshare points.  In fact, these “meetings” routinely last hours longer than promised, using every sales manipulation tool in the text book to convince the owner they simply MUST buy more points.   In the words of several owners, “they can make your vacation hell if you refuse to attend these sales meetings.”  Remember, these owners are there to use their timeshare for vacation – the pleasure end of the equation.  They resolve that they have to endure some pain (the sales meeting) in order to get on with their vacation (the pleasure).

Any Wyndham owner will tell you though that these meetings still aren’t that simple.  We’ve been told by countless owners that the sales tactics used by Wyndham are far beyond anything they have ever experienced.   What was amazing was how consistent each owner’s story was no matter where the resort was located.  Whether in California, Florida, Nevada, South Carolina or Missouri – the stories were strikingly the same.  Many of the lawsuits against Wyndham attempt to list the numerous bait and switch techniques used by Wyndham sales people.  One lawsuit, however, seemed to sum these techniques up the best – that Wyndham will simply “say anything to get you to buy more points.”  In fact, there are recordings on YouTube of Sales Managers telling their agents just that – tell the customer whatever you have to get them to buy more points.

One particular technique is especially difficult to overcome however.  These largely elderly owners are routinely shamed, intimidated and ridiculed into purchasing more points.  Wyndham is the only company I’ve ever researched whose sales staff routinely put down other Wyndham resorts and sales representatives to sell more points.  Owners are told that the last purchase really screwed up their accounts, and that the only way to fix things is to  . . . buy more points.  That in order to qualify for a “new” program, whether its Club Wyndham Access, Pathways, or some new VIP level, that just happens to fix everything wrong with that customers timeshare – is to upgrade.

In other words, Wyndham has become an expert at upgrading their own timeshares because what the owner was originally sold was simply wrong, inappropriate, not sufficient, etc.  These poor owners are consistently told that the previous sales person really lied to them, and that the only way to fix things is to . . . buy just a few more points.  So what begins as an owner update meeting normally ends with the owner signing another stack of 30 or 40 documents (usually over 100 pages that Wyndham is banking on the owner never reading till the rescission period expires) to purchase another 154,000 Wyndham timeshare points.

The Next installment of “Why Wyndham Timeshare Owners Upgrade” will be released next week.  In the mean time – STOP BUYING POINTS!

Reprinted From Real Estate News.

Editors Note:  We at Wyndham Litigation believe the fraud depicted in this article is a routine pattern and practice at Wyndham.  Sales fraud has become inherent throughout Wyndham Vacation Ownership and needs to stop.  It is time for the Board of Wyndham to take a stand against this corporate corruption. Failure on the Boards part to root out these practices constitutes a breach of their fiduciary duty to Wyndham’s shareholders, and in our opinion makes them culpable for the company’s fraudulent practices. Each of the following are jointly and severally liable – Stephen Holmes, Brian Mulroney, George Herrera, James Buckman, Michael Wargotz, Pauline Richards, and all Directors and Officers of Wyndham Vacation Ownership including Franz Hannng and Ryan Morettini.


The Lawyers Responsible for Wyndham’s Tactics

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We believe the fraud depicted in this sites articles are a routine pattern and practice at Wyndham.  Sales fraud has become inherent throughout Wyndham Vacation Ownership and needs to be stopped.  It is time for Wyndham’s Board of Directors to take a stand against this corporate corruption.  We believe the failure on the Board’s part to root out these practices constitutes a breach of their fiduciary duty to Wyndham’s shareholders, and in our opinion makes them culpable for the company’s fraudulent practices. Each of the following are jointly and severally liable – Stephen Holmes, Myra J. Biblowit, Brian Mulroney, George Herrera, James Buckman, Michael Wargotz, Pauline Richards, and all Directors and Officers of Wyndham Vacation Ownership including Franz Hannng and Ryan Morettini.

We call on all the attorneys at Wyndham to stop fighting these poor elderly seniors that did nothing but rely on the misrepresentations of your sales people to their very destructive detriment.  You add insult to injury when you drag out their administrative or legal claims.   Wyndham Lawyers Scott McLester, Lynn Feldman, Gregory John Bendlin, Charles Bott, Thomas Alan, Ryan Morettini and all the other Wyndham lawyers need to start having some compassion on these poor elderly people!  Your Sales Force has lied and deceived these people out of their last penny.  You know these claims and complaints are truthful.  You should do the right thing and pay back these innocent people for the wrongs perpetrated by your client!

The following attorneys represent Wyndham against the many defrauded seniors.  You should feel free to write any of them to express your disappointment with their tactics.

Ryan Morettini, Litigation Counsel
Wyndham Vacation Ownership
6277 Sea Harbor Dr
Orlando, FL 32821-8043
407-626-4262
ryan.morettini@wyn.com

GREGORY JOHN BENDLIN, Attorney
WYNDHAM VACATION OWNERSHIP, INC.
6277 SEA HARBOR DR
ORLANDO, FL 32821-8043
United States
(407) 523-7810
Gregory.bendlin@WYNDHAMWORLDWIDE.COM
Gregory.bendlin@wyn.com

Scott McLester
Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer
Wyndham Worldwide
22 Sylvan Way
Parsippany, New Jersey 07054
973-753-6000
Scott.McLester@WYNDHAMWORLDWIDE.COM
Scott.mclester@wyn.com

KORIN ALISE NEFF
WYNDHAM WORLDWIDE CORPORATE LEGAL DEPARTMENT
22 SYLVAN WAY
PARSIPPANY, NJ 07054-3801
United States
(973) 753-7849
KORIN.NEFF@WYNDHAMWORLDWIDE.COM
Korin.neff@wyn.com

Some other In-house Wyndham Lawyers that can be reached at the above contact information:

Lynn Feldman ((973)753-6461), Charles Bott, Thomas Alan, Susan Crane, Kristen Hotchkiss ((973)953-3591), Curt Stevens, Marcus Banks, and Christoper Nowak

Wyndham’s Outside Lawyers: 

William J Anthony
Jackson Lewis PC (NY)
18 Corporate Woods Boulevard
Albany, NY 12211
anthonyw@jacksonlewis.com

Paul DeCamp
Jackson Lewis LLP (Reston VA)
10701 Parkridge Boulevard
Suite 300
Reston, VA 20191
703-485-8305
703-483-8301 (fax)
decampp@jacksonlewis.com

James R Mulroy, II
Jackson Lewis LLP (Memphis)
999 Shady Grove Road
Suite 110
Memphis, TN 38120
901-462-2600
901-462-2626 (fax)
mulroyj@jacksonlewis.com

Kaitlyn M Burke
Littler Mendelson, PC
3960 Howard Hughes Pkwy, Ste 300
Las Vegas, NV 89169
702-862-7711
702-974-2816 (fax)
kmburke@littler.com

Patrick H. Hicks
Littler Mendelson, PC
3960 Howard Hughes Parkway
Suite 300
Las Vegas, NV 89109
phicks@littler.com

Kent Michael Fandel
GRAHAM & DUNN PC
2801 ALASKAN WAY
STE 300 PIER 70
SEATTLE, WA 98121-1128
206-624-8300
FAX 340-9599 (fax)
mfandel@grahamdunn.com

Daniel J. Oates
GRAHAM & DUNN (SEA)
2801 ALASKAN WAY
STE 300 PIER 70
SEATTLE, WA 98121-1128
206-340-9631
doates@grahamdunn.com

Eugene J. Podesta, Jr.
Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
Suite 2000
165 Madison Ave
Memphis, TN 38103
901/526-2000
901/577-2303 (fax)
gpodesta@bakerdonelson.com

Donald E. Christopher
Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
Suite 2900
200 S Orange Ave
Orlando, FL 32801
407/422-6600
407-841-0325 (fax)
dchristopher@bakerdonelson.com

Sara M Turner
Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
Suite 1400
420 N 20th St
Birmingham, AL 35203-5202
205/250-8316
205/488-3716 (fax)
smturner@bakerdonelson.com

Joy A. Boyd
Baker, Donelson, Bearman, Caldwell & Berkowitz, PC (Nash)
211 Commerce Street
Suite 800
Nashville, TN 37201
(615) 726-5632
(615) 744-5632 (fax)
jboyd@bakerdonelson.com

Heidi Oertle
Schiff Hardin LLP
233 S. Wacker Dr.
Suite 6600
Chicago, IL 60606
312-258-5771
312-258-5700 (fax)
hoertle@schiffhardin.com

Andrew W. Coffman
King & Ballow
315 Union Street
Suite 1100
Nashville, TN 37201
(615) 726-5488
(615) 726-5417 (fax)
acoffman@kingballow.com

R. Douglas Hanson
King & Ballow
315 Union Street
Suite 1100
Nashville, TN 37201
dhanson@kingballow.com

R. Eddie Wayland
King & Ballow
315 Union Street
1100 Union Street Plaza
Nashville, TN 37201
(615) 259-3456
rew@kingballow.com

STEPHANIE LEIGH ADLER-PAINDIRIS
JACKSON LEWIS LLP – ORLANDO FL
390 N ORANGE AVE
STE 1285
ORLANDO, FL 32801
407- 246-8440
407- 246-8441 (fax)
adlers@jacksonlewis.com

JUAN C LOPEZ-CAMPILLO
JACKSON LEWIS LLP – ORLANDO FL
390 N ORANGE AVE
STE 1285
ORLANDO, FL 32801
407-246-8440
407-246-8441 (fax)
juan.lopez@jacksonlewis.com

Jessica DeBono Anderson
Jackson Lewis, PC
Suite 1285
390 N Orange Ave
Orlando, FL 32801
407/246-8458
407/246-8441 (fax)
jessica.anderson@jacksonlewis.com

Mary Ruth Houston
Shutts & Bowen, LLP
300 S Orange Ave – Ste 1000
PO Box 4956
Orlando, FL 32802-4956
407-423-3200
407-425-8316 (fax)
mhouston@shutts.com

Paul J. Scheck
Shutts & Bowen, LLP
300 S Orange Ave – Ste 1000
PO Box 4956
Orlando, FL 32802-4956
407/423-3200 Ext 6730
407/425-8316 (fax)
pscheck@shutts.com

James J. Henson
Shutts & Bowen, LLP
300 S Orange Ave. Ste 1000
PO Box 4956
Orlando, FL 32802-4956
407/425-9044
407/423-2016 (fax)
jhenson@shutts.com

We will update this information when possible.


Wyndham Drives Numerous Senior’s into Bankruptcy

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Wyndham Drives Numerous Senior’s into Bankruptcy

Wyndham the Cause of Financial Disaster for Numerous Elderly Timeshare Owners

A review of the latest court records shows an enormous increase in the number of Wyndham timeshare owners filing for bankruptcy.   We have studied a number of recent bankruptcy filings (E.g. Scott, Feliciano, Pierson, Moreno, Robinson, Hupe, Fischer, Mulazim, Hughes, Frye, etc.) and noticed that in virtually every case, these largely elderly couples historically had very good credit ratings.   What changed to drive these seniors into bankruptcy so late in life?  In a word – Wyndham.

Wyndham’s Annual Report for 2013 includes a number of revelations about Wyndham’s timeshare business.  One of the most notable is the dramatic increase in Wyndham’s allowance for vacation ownership loan losses.  Wyndham’s 2012 allowance was 445 million.  However, the timeshare company’s allowance rose 13 % to 509 Million for the 2013 fiscal year.  This increase is even more significant given the fact that total vacation ownership receivables actually decreased in 2013.

These escalated loan losses is the result of a significant increase in the number of timeshare mortgages that have become uncollectible.   While Wyndham would deny it, the increase in unpaid timeshare mortgages is directly the result of Wyndham’s upgrade sales tactics.  Given the difficulty Wyndham has in selling timeshares to new prospects, Wyndham has turned to a strategy of selling more points to existing timeshare owners.  In fact, these upgrades account for a whopping 70% of Wyndham’s total timeshare sales.  The problem with this strategy is that it drives existing timeshare owners deeper into debt, eventually resulting in their inability to pay their timeshare mortgages.   Numerous Timeshare owners will attest to the fact that these endless coercive upgrade tactics forced them into bankruptcy.

It gets worse, however.  When owners are forced into bankruptcy, Wyndham apparently believes it’s above the law.  Wyndham routinely violates the automatic stay through continuing foreclosure and other collection efforts.    A recent case is Scott v. Wyndham Vacation Resorts, Bankruptcy Case No. 10-38633 NVA Chapter 13, Bankruptcy Court for District of Maryland.  “[Scott filed] an action for damages and injunctive relief under 11 U.S.C. § 362 and 11 U.S.C. § 1301(a), arising from the reckless conduct of a creditor [Wyndham]. Despite the protections afforded by the automatic stay to Sascha P. Scott (hereinafter, “Mr. Scott” or the “Debtor”),[Wyndham] has initiated a foreclosure proceeding in the Superior Court of New Jersey seeking, inter alia, the imposition of an in personam judgment against Mr. Scott and his wife/co-debtor Mrs. Scott. [Wyndham] continues to ignore the automatic stay despite electronic and written notice from the Bankruptcy Court.”

Count One of the Scott case entitled “Violation of the Automatic Stay” stated that “Defendant’s [Wyndham’s] actions violate 11 U.S.C. § 362(a) by attempting to collect on a debt that arose pre-petition. [Wyndham] had actual notice of the bankruptcy and has willfully violated the automatic stay. Plaintiffs have suffered and continue to suffer emotional distress as a result of [Wyndham’s] actions. Although Mr. Scott proposed a 100% plan, Defendant continues to harass Plaintiff. Additionally, plaintiffs have incurred attorney’s fees as a result of Defendant’s conduct.”  The complaint goes on to demand actual damages, punitive damages and legal fees under 11 U.S.C. § 362 from Wyndham for its violation of the Bankruptcy code.

Wyndham has over 3.3 Billion Dollars of vacation ownership contract receivables (timeshare mortgages), with approximately 350 Million of those receivables coming due each year.  These timeshare mortgages are the security for Wyndham’s corporate bond debt, which has historically carried an investment grade rating.  However, as more mortgages enter default, Wyndham’s debt could lose its higher rating or worse, depending upon the financial condition of Wyndham and each creditor’s disposition.  Consequently, as more timeshare owners default on their timeshare loans, and as more owners are forced into bankruptcy, Wyndham may find itself in a serious financial bind, with fewer creditors willing to refinance Wyndham’s mountain of debt (Total Balance Sheet Debt and Liabilities of over 8 Billion).

Consequently, Wyndham has put itself in a serious pickle.  In order to continue to drive up its stock price (and drive up the spectacular stock gains being made by Wyndham insiders), Wyndham must continue to push for higher timeshare revenue.  If Wyndham can’t sell points to new prospects (which is growing more difficult each year), they must sell more points to existing owners.  The more Wyndham pressures its owners to buy points, the more owners will inevitably fall into default – thereby driving up the already significant loan losses.

As loan losses increase, Wyndham’s corporate debt,, secured by those loans, will look less and less favorable to lenders.  At a minimum, Wyndham’s cost of borrowing will increase.  Given the amount of Wyndham’s debt, this could create a real financial problem – ultimately driving down their stock price.  Moreover, these problems would be exacerbated by the fact that Wyndham would no longer be able to maintain what has been an aggressive stock repurchase program.   Wyndham’s inflated stock price has been greatly supported by its equity redemptions.  The failure to maintain this program would likely create further downward pressure on Wyndham’s stock price.

Given the above scenario, Wyndham has no choice but to make extreme changes to its timeshare division.  Wyndham Vacation’s business model will need to be reinvented.  Wyndham will have to provide more value to its owners, and stop the upgrade sales program that is so fraught with fraud and deception.  In addition, Wyndham’s reputation will have to undergo significant repair to attract new prospects.   The best way to begin is with a change in Wyndham’s corporate attitude.  Wyndham must admit it has deeply entrenched problems with its sales practices and procedures.  The Wyndham timeshare marketing and sales philosophy should be discarded for a more transparent, open and truthful system.  In order to ensure such a dramatic reformation, Wyndham should probably replace much of Wyndham Vacation’s management, starting with Franz Hanning.  Wyndham needs new ideas built on unwavering integrity.  The organization desperately needs new people to build a new foundation of honesty and superior customer service.  Wyndham’s survival will largely depend on making these changes as soon as possible.


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