The Diamond Resorts International Timeshare Scam
A few months ago I signed up for a sweepstakes to win $100.000 or dream car at Camarillo Premium outlets. Then just this week I got a call from Diamond Resorts International that I was selected as the few finalists. They explained that even if I didn’t win the main price I would get a free trip and I was also promised a bonus gift of 2 nights accommodations if I came to their showroom in Encino California to listen a 90 minute presentation of their timeshare offering. I also needed to bring my wife and two forms of identification and a credit card but I was under no obligation to buy anything.
At this point my scam alarm went off as I’ve heard about all these timeshare scams. Still I was interested to see it in action and see if I could actually get anything they promised to me so I agreed to go there with my wife to whom I explained that this is probably a scam but let’s see if we can actually get something out of it. I got my invitation which also had a one full letter size page full of small print with the terms and conditions. I actually read it and surprise surprise there was a lot of restrictions like they had to be used off season and a minimum 30 to 90 days prior had to be booked.
Before going there I did little bit of internet research on their timeshare and found out that there’s ridiculous maintenance fees and it’s nearly impossible to get the kind of vacations they promise. Armed with this information we arrived to their showroom to play the part of easily manipulated and unsuspecting mark. We registered at the front desk and waited for our agent.
Our agent Shannon started by explaining how the thing works that she would do a presentation of their offering and after that we could get our gifts. She also told us that they could give us a deal today and only today because they were “bribing” us to come there they were limited by law to get our business only today. After today we could get the same deal as anyone else and none of the perks. First we talked about our vacation habits and destinations we were interested in. She made it sound like they were taking a survey to learn more about their potential customers.
Then she gradually started showing how their system differs from a traditional timeshare how they had this point system and how those points could be redeemed for free nights at any of their resorts or steeply discounted rates at any Interval International resorts world wide. She painted a picture how we could stay in a penthouse suite and have private chefs cook for us. It all seemed so good a little too good to be true. We watched a video where paid actors eh members told how they love it. We saw some models of their resorts and pictures and floor plans. She appeal to the emotional side how it was good for our health and relationship etc.
For the rational side she played with the numbers she got from us as how much we spend yearly on travel and how much it would accumulate in 30 years and then some weird math how inflation would triple that number. Now that we were in the ballpark what their 15 000 point silver plan would cost at $6 per point. Next up was April who I suppose was supposed to close me with numbers. She told me that just today they have a deal where I don’t have to buy the full 15k points but I could start at lower number like 6k or 4k points. The 4k points was around $15k dollars to own. Also they would offer financing where I only pay a downpayment of $2500 and for the 4k it would be $250 per month. So wouldn’t it make sense to payoff something I own since I’d be spending that money anyways on vacation.
Of course she didn’t tell me until I asked that that $250 per month is a 10 yr loan with 16.99% interest. Now let’s calculate how much that will actually cost me. 120 x $250 + $2500 = $32500. That is over double the slightly less than $15k. Of course I could pay it off at any point.
I was hesitant with $250 dollars a month so she offered me a even lower option with 2k points at $150 per month. At that point she realized it wasn’t about the money. Because I was constantly saying I’d need to sleep on it and look at the papers. At that point she got a bit hostile saying that their boss Stephen J. Cloobeck the CEO of Diamond Resorts International had been in the Undercover boss and how Guggenheim had invested $1B dollars on them. Surely their lawyers would do better research that I would. I’m sure they would but I’m sure they didn’t buy points. I even asked if I could get papers on the anytime deal but they couldn’t even give those out since I could from their competition.
She got frustrated with me and gave up. Now here comes the manager to do quality assurance. I can’t remember his name but he was Armenian. He was very understanding to us that we don’t do impulse buys. Also at this point the maintenance fees finally come up. If I’m not mistaken it was around $2600 per year for the 15k points and at 4k points it was around $900. So let’s do a quick recalculation on the 4k points: 12 x $250 + $900 = $3900 per year.
He wasn’t done yet he had one more offer a 15k points trial for 18 months which would cost around $2800 or $166 per month for 16 months plus a $399 downpayment. This offer was limited to 16 of their best resorts. This was also the first time could see what the points actually get us. One example in driving distance from home was their Lake Tahoe resort. At the peak season you’d need 10k points for one week stay in one bedroom room. The 2k points wouldn’t have gotten us even a 4 day stay during low season.
After a while he realized that he wasn’t able to convert me either and thanked us for our time and directed us to our prize drawing. We got two gift cards that had to redeemed through Odenza Marketing Group. Redeeming them requires a $50 reservation deposit as bank draft or cashiers check on each. I will write about the later on how the process goes.
I went there thinking this is some kind of scam and surely enough that’s exactly what it is. When ever something sounds too good to be true it usually is. Especially when you have to make a decision right there and then without having possibility to review all the material and then ask the questions on anything that bothers you. The whole situation was very pressuring for me to sign up and it was like they were doing me a favor by inviting me to this opportunity.
I’m sure this works for those that can buy the minimum 15k points right there and then without financing and if you don’t care about paying the high maintenance fees. They prey on gullible people and this country has a lot of them and non existing customer protection. Even after several requests I couldn’t get any papers to take with me even on the anytime offer I’m able to participate at any time. I’m sure they’ve covered their ass with a ton of fine print that you can’t take home to review or to show a lawyer. The gifts also smell like scam but I’m going to find that out myself and report on it later.