Diamond Resorts International (DRI) and their CEO, Mr. Stephen Cloobeck, squeezes it's customers for millions of dollars, violates State Law in Hawaii, deceives its customers, and continues to swindle individuals to become clients. The time has come for an organization with power and influence - NBC Dateline would be perfect - exposes the man and his company in order to protect other citizens from becoming victims to their scam.
I have filed formal grievances with the BBB, the FTC, the SEC, the Attorney General of Hawaii and numerous Senators and Representatives. I have also sent a complaint to the Consumer Financial Protection Bureau. Hundreds of other deeded property owners affiliated with DRI have filed similar complaints. There are numerous financial and insurance related inconsistencies in the records of DRI and they refuse to comply with State Law when dealing with their customers. Unfortunately, unless we are able to obtain the support of a powerful media outlet, we will never have the influence to fight this giant company and win.
Background:
On 21 Oct we were notified that our timeshare required repairs that would cost 5 times the normal maintenance fees. The decision to charge such a large fee was decided by the board of directors. 5 individuals who represent the thousands of owners. 3 of the 5 board members are either DRI employees or family members of DRI employees, creating a slight conflict of interest.
In order for owners to provide feedback to the board of directors, they were required to RSVP and participate in a meeting on either the 19th of October or the 20th of October. RSVP was required before the 14th of October. The letter notifying us was postmarked on the 17th of October (3 days after the RSVP deadline). Both meetings had already been held and all decisions made before the letter even arrived.
The excessive charge is for reported water intrusion damage on the property in Hawaii. The cost of repairs is estimated (not actual) to be $65M which equates to $5,893.32 per week owned. This is in addition to standard maintenance fees. Normal maintenance fees up until now were approximately $1400.00 per year. The water intrusion issue has been known for at least 4 years by the company, however they took no action until now (and failed to notify any owners until now).
Due to their neglect, they now are charging each owner for the repairs. They "investigated filing an insurance claim" but decided against pursing this after their claim was denied. Upon reviewing their financial audit records since it appears that they have significantly modified (reduced) their mandatory insurance coverage. DRI is required to maintain insurance to cover this type of loss (with 100% of the full cost of replacing the insured buildings) per the original agreement with deeded owners. Not having this coverage, or refusing to pursue this claim, appears to be a breach of contract with the owners.
In addition to the drastic increase in fees, the company is threatening owners with delinquency fees, interest charges, excise taxes, suspension of rights and debt collection foreclosure if fees are not paid by 1 January (with 3 months notice). A group of owners have started to collect data in anticipation of legal action against the company (www.poipuowners.org).
This scenario represents definite "unfair or deceptive acts or practices" where there was willful and intentional misrepresentation, omissions and misleading comments or acts, failure to fully disclose material facts (ie water intrusion problem), that a reasonable person would interpret, causing substantial financial hardship that was not reasonably avoidable and not outweighed by countervailing benefits to the complainant or to the competition. The announcement sent to owners (based on the dates of the mailings and the board of directors meetings) are, in my opinion, a deceptive act.
I will caution you that the CEO of DRI is a large political campaign donor and appears to have a great deal of political clout. I could care less about his political affiliation, however this influence has created a protective barrier between himself and his owners.
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