A survey of administrative remedies (and some non-administrative ones as well) for timeshare owner consumers to consider if they are seeking relief
This article is divided into three sections: an introduction, a more detailed description of each of the reported agencies available, and a summary and conclusion. This initial section is an introduction into the complaint process, who the players are, what’s involved in filing and what to anticipate in terms of agency response.
The second section will list and describe any “agency” we are aware of who will accept a complaint on a consumer-related timeshare issue. Instructions for initiating the process will be included along with a summary of the agency’s particular makeup and its relationship to the consumer and the timeshare industry.
The last portion, the Summary and Conclusion, brings into play the more complicated questions of whether filing a complaint is a worthy endeavor if your intent is solely to get someone to actually assist you with your dispute.
The issue of effectiveness of the complaint in terms of enhancing your developer dispute by bringing in some third party “muscle” will be discussed throughout this text, addressing what the author perceives as an overall general ineffectiveness in the administrative complaint process and some speculation on the possible reasons therefore. For now, let me suggest that in the absence of a resort’s willingness to address your grievance with you, I do strongly recommend filing complaints with all or as many agencies as practicable. It’s important that record of your dispute be made; do not accept “no” for a final answer without taking your dispute as far as possible. Although I cannot provide you with any assurance that your issue will be appropriately addressed, your failure to register a complaint will both guarantee it won’t be addressed, and further deprives the industry from any notice or incentive to improve its relationships with owners.
The agencies I recommend you reach out to are both public and private, with the public, or governmentally sponsored ones divided into state and Federal. There is significant logic in attempting to involve the Feds, particularly if the state administrative agencies with primary regulatory control do not appear to be vigorously attempting to advocate the consumer’s issues.
In addition to the agencies included in this survey, I’d encourage you to be creative and look to local agencies, legislative channels, and even news agencies if your specific facts warrant that kind of exposure as well. The more fuss you can stir up the better.
In summary and to further emphasize this point, we do recommend you avail yourself of all avenues of dispute you have available to you. Even if your complaint isn’t addressed to your satisfaction, you haven’t lost anything but the amount of time in so doing, and, if you don’t make the attempt, the results of your inaction are clear. Recall the adage, “nothing ventured, nothing gained.” Lastly, if not for your own situation, take some solace from the fact that your input may assist other owners with their further issues (there is strength in numbers, after all).
Agency Research
Better Business Bureau (“BBB”) (non governmental non regulatory organization)
A.) Overview
The BBB is a nonprofit private (nongovernmental) organization focused on promoting “an ethical marketplace where buyers and sellers trust each other.”[1] The BBB promotes trust between buyers and sellers by setting standards, encouraging and supporting best practices, celebrating marketplace role models, calling out and addressing substandard marketplace behavior, and
creating a community of trustworthy business and charities.[2] It is important to emphasize that the BBB is not a regulatory agency and its purpose is not to solve consumers’ dispute but to create and promote a community of business and charities that consumers can trust.
B.) Dispute Process
If the BBB’s purpose is not to resolve consumers’ disputes, then why file complaints? Although an individual consumer’s complaint may not bring about a desired result, it alerts future consumers against an untrustworthy business.
Before discussing how the dispute process works, a consumer must keep in mind that the BBB does not handle several types of claims such as employee/employer disputes or discrimination claims.[3] Further, a consumer should set emotions aside when describing the problem[4] and refrain from abusive or foul language since the BBB reserves the right to reject complaints that contain that language.[5]
Filing the complaint with the BBB is quite simple and relatively effortless. As the consumer answers questions, others will be prompted to come up based on the previous answers. Consumer will then provide his/her personal information and the information of the business, and finally have an opportunity to tell the story.[6] See the footnote below for the web based complaint site.
After filling the complaint, the BBB will notify the business within 1-5 days. The business has 30 days to respond to the BBB. Once the business responds to the BBB, the consumer will be notified of the response. If consumer is not satisfied with the business’s response, the consumer can file a rebuttal within 10 days. The case is then closed. If the business does not respond to the BBB within 30 days, the BBB will inform you on days 31-35. Most complaints close within 35 days from filling.[7]
The success of the process is not based on the outcome but whether the business responded or not. So consumers should be aware that the BBB ratings represent the BBB’s opinion of how the business is likely to interact with its customers.[8] It is extremely hard to predict or foresee the outcome of a BBB complaint because businesses are not even required to answer to those complaints.
C.) Agency Conclusion
Although the BBB is not a regulatory agency, it can give consumers an idea of how cooperative and responsive a business will be in case there is an issue faced by the consumer. The consumer should rely on the BBB’s rating only to the extent to determine how responsive the business will be regarding BBB’s complaints. It could very well be that a business would rather deal with a consumer directly (in fact, BBB recommends reaching out to the business before filing a complaint).
But consumers should not be discouraged by the lack of positive results but continue to file complaints as to alert other consumers and thus fulfill the BBB’s mission to create a community of trustworthy businesses. Somewhat ironically, at Finn Law Group, we’ve found the BBB complaint to be more effective than those filed with some of the other agencies included within this survey. We attribute this to a couple of factors, one being that the resort has more control over state regulatory agencies (more on this subject later) and second, that many resorts are concerned enough about public perception of their consumer friendliness to initiate a dialogue that at minimum pays lip service to working out consumer issues.
Federal Trade Commission (“FTC”) (Federal Regulatory)
A.) Overview
The FTC is an independent agency of the United States government created in 1914 whose purpose is to prevent unfair and deceptive acts or practices to consumers, to educate the public on the competitive process, and to accomplish these goals without adding an undue burden on legitimate business activities.[9]
B.) Dispute Process
Filing a complaint with the FTC is not complicated. A consumer just needs to provide contact information, type of product or service involved, information about the business, and the details about the transaction.[10]
After filing the complaint, unfortunately, consumers should not expect an immediate result or even an individual acknowledgement. In fact, consumers should not expect a resolution at all because the FTC cannot resolve individual complaints, but can provide information about the next steps a consumer may take.[11]
So what is the purpose of filing a complaint with the FTC if they are not going to resolve the consumer’s dispute? The FTC looks at fact patterns in the industry. Although one single consumer complaint will not be resolved, several complaints may indicate to the FTC a pattern of fraud and abuse which may lead the FTC to investigate and eliminate those unfair business practices.[12]
C.) Agency Conclusion
Although the FTC is a regulatory agency and it does have the authority granted by Congress to adopt industry-wide regulations rules,[13] the FTC does not resolve an individual consumer complaint. The FTC will only investigate patterns once it decides enough similar complaints have been filed with them. A consumer should not be completely discouraged by a lack of personal resolution but should take encouragement that if there is an unfair and deceptive practice that is reported multiple times, the FTC will investigate and, if it sees appropriate, will create rules that will fix an entire industry. The caveat, consumers must report.
Consumer Financial Protect Bureau (“CFPB”) (Federal Regulatory)
A.) Overview
The CFPB is one of the newest government agencies created in July 2010. It was created as a result, in part, of the mortgage crisis in the late 2000s. Consumers were not being protected against a rapid growth in irresponsible lending practices. The CFPB focuses on consumers and its one goal is to watch out for American consumers in the market for consumer financial products and services.[14] Since the timeshare industry utilizes various financing tools in its sales practices and presentations, a CFPB complaint may be a very viable option depending, of course, on the nature of the complaint.
B. Dispute Process
Filling a complaint with the CFPB is not difficult. A consumer only needs to choose the type of loan, product, or service involving the matter, fill out an electronic form with consumer and business’s information, and then tell his/her story.[15] Another great feature provided by the CFPB is the ability to track the complaint,[16] which is a feature not found with other regulatory agencies like the FTC.
After the consumer files the complaint, the CFPB forwards it to the company who then has 15 days to respond to the consumer and the CFPB.[17] The CFPB expects companies to close complaints within 60 days. If the complaint is deemed to be more complex, then companies can take longer to close the complaint, but the CFPB does not define nor does illustrate what a complex complaint entails.[18] A consumer can view the CFPB as a hub for all complaints because it can determine that another agency would be better able to assist the consumer and if it does make that determination, then the CFPB forwards the consumer’s complaint to that agency and notifies the consumer of such.[19]
Since this is a government agency, the CFPB does publish the subject and data of the complaint to the public[20] feeding its Consumer Complaint Database.[21] Further, the CFPB will report to Congress with the purpose of enforcing federal consumer financial laws and writing better rules and regulations.[22]
The CFPB provides report snapshots that allow consumers to see what type of complaints have been filed and their outcomes. As of June 2014, 11% of the complaints were closed with monetary relief; 11% closed with non-monetary relief; 68% closed with explanation; 2% closed (without relief or explanation); 3% administrative response; 2% under review; 3% the company did not provide a timely response.[23] This gives the consumer an idea of what to expect as an outcome to their complaint. Although the individual complaint will be resolved, only a very small percentage of the complaints will be closed with a monetary relief, with the top two categories in which consumers received monetary relief being (1) Bank Account or Service at 26% and (2) Credit Card with 33%.[24] However, as more credit card transactions involving timeshare purchases are generated, the credit card financing aspect should not be overlooked by the consumer looking for a monetary resolution to their timeshare purchase issues assuming a credit card was utilized. More and more timeshare developers are acting as new credit card originators for third party financial provides such as Bill Me Later (a division of PayPal) Barclay Bank, Bank of America, and a couple of credit unions.
C.) Agency Conclusion
Unlike other regulatory agencies, companies must reply to the CFPB’s complaints and inquiries. This is great news for consumers because it means consumers will be heard. But being heard and made whole are two different things. Consumers should still file their complaints with the CFPB and expect a modest resolution and an opportunity to be heard. However, the more complaints the CFPB receives regarding a company, practice, or industry, it is likely that those complaints will be presented to Congress who have the power to create new rules and regulations that will improve the market for consumers. Although that is not the ideal individual resolution a consumer may want, consumers still have a chance of having their individual complaint resolved and in the process may end up helping future consumers when Congress reviews and enacts new laws.
Florida Department of Business Professional Regulation (“DBPR”) (state regulatory agency)
In the State of Florida, the DBPR is an extension of the executive branch of the Governor, and is charged with licensing and regulating all businesses and professionals within the state.[25] The DBPR’s mission is to “license efficiently,” and to “regulate fairly.”[26] The DBPR is led by the Secretary, who is appointed by the Governor, and the secretary is responsible for all duties and functions that are vested in the DBPR, as well as its divisions, bureaus and other subunits.[27] Directly below the Secretary of the DBPR is the Chief of Staff, Deputy Secretary of Professional Regulation, and Deputy Secretary of Business Regulation.[28] The Deputy Secretary of Business Regulation oversees the subdivision relating to timeshares known as the Division of Florida Condominiums, Timeshares and Mobile Homes (“Timeshares Division”).[29]
Division of Florida Condominiums, Timeshares, and Mobile Homes (“Timeshares Division”)
The Timeshares Division licenses and regulates timeshares and claims to provide “consumer protection for Florida residents living in the regulated communities through, education, complaint resolution, mediation, arbitration and developer disclosure.”[30] The Timeshare Division states that their mission is “to be the model timeshare regulatory organization in the U.S.” by making sure all parties comply with timeshare laws and rules by implementing and enforcing Chapter 721 of Florida Statutes.[31] The DBPR and its Timeshare Division are charged with the enforcement of Florida Statutes Chapter 721 as well as Chapter 61B-37 through 41 of the Florida Administrative Code.[32] The Timeshare Division provides forms not only for resorts to meet filing requirements but also for consumers to file complaints with the Timeshare Division.[33]
A.) Dispute Process
To initiate the dispute process, a consumer must first file a written complaint with the Timeshares Division[34]. This standard form must be completed and submitted to the Timeshare Division for review. Keeping in mind that a complaint is not confidential[35], once submitted, the claims will be investigated by a Department investigator.[36] While the Division states that they will reply to a complaint within thirty-days, they also state that “[o]n average, complaints take about four months to be investigated…”[37] After the investigation is completed the case will be legally reviewed.[38] Once the complaint reaches the legal department, the DBPR states that “[i]t typically takes an additional two months to one year to settle” a case depending on the complexity.[39] If the Timeshare Division determines that the facts established during the investigation support a violation of Florida law, the case will be prosecuted.[40]
The Office of the General Counsel (“OGC”) will serve as prosecutor and will prosecute an administrative action to enforce Florida law or impose penalties and fines as discipline.[41] The OGC represents the interests of Florida residents and does not represent individual complainants.[42] The OGC prosecutes under administrative law and cannot seek to award monetary damages on behalf of a victim or cause a licensee to be sentenced to prison.[43]
If the case is prosecuted by the OGC, the OGC has the ability to impose discipline whether through a formal hearing or a settlement agreement.[44] In most cases however, the Department, even if prosecution is successful, does not typically recover money that a consumer has lost.[45
B.) Possible Outcomes
Florida Law protects any complainant from civil liability with regard to information furnished in any Department investigation or administrative proceeding, unless the complainant acted in bad faith or with malice.[46] However, as stated above, in most cases, the Department cannot recover money that has been lost by the consumer. The Timeshares Division does have the power to discipline, which could be a any combination of the payment of fines, completion of continuing education classes, payment of costs, probation, suspension of license, revocation of license.[47]
Nevertheless, many consumers rightfully wonder what the likelihood of success would be if they take the time to file a complaint. Statistically speaking, between April, 2014 through April, 2016, the Timeshares Division received 2,360 complaints. Of those complaints, only 110 resulted in action by the Timeshare Division, a rather dismal measure of relief for consumers of less than 5%!
C.) Agency Conclusion
To conclude, while the DBPR and the Timeshares Division aspire to protect consumers as it relates to timeshares, they often fall short of this goal. This is reflected by their complaint action percentage, which is slightly higher than four percent between 2014 to 2016. Most timeshare consumers are looking for expedited relief in the form of canceling their timeshare obligation as well as recovering any moneys paid. The DBPR and Timeshares Division process usually takes anywhere from four to sixteen months, and even if successful cannot recover monetary compensation or damages to consumers. Therefore, on an individual basis, the timeshare consumer is typically left in the same position they were in before initiating the complaint process.
Attorney General (“AG”) (State’s Attorney)
A.) Overview
The Florida Attorney General (“AG”) is a publicly elected position. The AG is charged as the chief legal officer of the state of Florida, and is the head of the Florida Department of Legal Affairs. The AG’s Office proclaims to protect “timeshare owners by investigating business practices” relating to the sale and resale of timeshare interests.[48]
Specifically, the Office for the Attorney General has charged the Consumer Protection Division (“Division”) of the AG with the civil enforcement authority to investigate and prosecute violations of the Florida Deceptive and Unfair Trade Practices Act (“Act”).[49] The Division, on behalf of Florida Consumers, pursues individuals and entities that have or are engaged in violations of the Act.[50] The Division is additionally responsible for the enforcement of the civil provisions of the Racketeer Influence and Corrupt Organization (“RICO”) Act, which punishes businesses and “enterprises” of conducting patterns of illegal activities within the state.[51]
B.) Dispute Process
As with most regulatory agencies, to initiate the dispute process, a consumer must file a complaint with the agency. The Division has provided consumers with two avenues of which to file a complaint. The consumer can either call by phone a toll-free number to initiate a complaint, or the consumer can fill out a complaint contact form on the AG’s website.[52] Notably, however, the AG by law cannot represent private citizens in legal disputes.[53] Thus, when a complaint is filed by a consumer, and the AG investigates the alleged misconduct, the AG does not represent the consumer on an individualized basis, but rather the interest of consumers in Florida as a whole.
C.) Possible Outcomes
If the Division investigates the complained of actions, and is successful in prosecuting or settling the action, there is a potential for recovery. The Division “regularly handles hundreds of active civil cases.”[54] The Division claims that since 2011, 558 investigations have been resolved and that approximately $9.8 billion “has been scheduled or has already been returned to the benefit of Floridians.”[55] However, that being said, on an individualized basis, the likelihood of a single consumer ever recovering from a consumer complaint is bleak.
C.) Agency Conclusion
In conclusion, the Florida Office of the Attorney General is the civil enforcement authority in Florida and have been successful in recovering from wrongdoers. However, since the AG cannot represent consumers on an individualized basis, the average consumer receives little to no monetary compensation for a timeshare resorts wrongful actions.
National Timeshare Owners Association (private member based non regulatory association)
The National Timeshare Owners Association is a social purpose organization dedicated to educating, advocating and protecting ownership interests. For nearly 20 years, the NTOA has worked to ensure that owners have resources available to them including a toll free help desk supported throughout North America.
As the oldest and largest member based association, the NTOA works closely with other industry associations and stakeholders such as CRDA, TBMA, TATOC, CARE and FTOG. Our members are benefited by NTOA’s extended relationships in the timeshare community that also include domestic and international developers, HOA’s and management companies. As one of the most collaborative organizations in the vacation ownership industry, the NTOA seeks to find solutions to some of the industry’s most complex issues. They are committed to making all of the benefits of timesharing accessible for all owners. For more information on the NTOA, please call (844) ASK NTOA or email us at info@ntoassoc.com
Summary and Conclusion
In reviewing all the associations and agencies enumerated in this article, the inescapable conclusion, as supported by the numbers, is that appealing to the state and Federal regulatory law enforcement agencies themselves is, statistically speaking in the vast majority of cases, an exercise in extreme futility for the consumer.
Ironically, perhaps consumers seeking any form of relief from the purported misdeeds of the timeshare developers may be slightly better served by filing complaints with private agencies and organizations such as the Better Business Bureau and the National Timeshare Owners Association.
From a consumer’s perspective, the absence of governmental regulatory enforcement is nothing less than a true travesty of justice.
How, you may inquire (if you’re consumer-orientated), has it come to pass – with Florida statutes that require the DBPR to “regulate fairly” and the Attorney General to “investigate and prosecute violations of the Florida Deceptive and Unfair Trade Practices Act” – that less than 5% of consumers who file complaints receive any relief whatsoever? What avenues, if any, exist for the unwary consumer who gets pressured into purchasing a $25,000 (or more) timeshare interest with credit at a 19% annual interest rate, along with a lifetime maintenance fee obligation, and then come to realize that the purchase contract contains no way out, and then further learns that no significant secondary resale market exists to even unload the liability?
To perhaps state the obvious, the timeshare industry is a well-organized and wealthy industry that has the ability to lobby for favorable laws and treatment and is not the least bit shy about doing so. They’re more than capable of utilizing the finest blue chip lawyers and lobbyists to achieve their goals. Contrast this with the average consumer, who is economically stretching to afford a $25,000 timeshare interest to attempt to insure one week out of the year to have a place to take his or her family on vacation. When a dispute arises between owner and developer, it’s not difficult to predict the outcome.
It’s beyond the scope of this article to assess the deeper question of how to even up the playing field between “David,” the consumer, and “Goliath,” the timeshare industry. Florida already has some very good consumer protection laws in its books; passing stronger laws is not necessarily the answer. The timeshare industry enjoys a very comfortable relationship with the state of Florida, both within the Attorney General’s office and the DBPR. It’s ironic that although our government is fully funded with taxpayer dollars, the political power that is unleashed via campaign contributions, lobbying efforts and other indirect connections with the government seems to speak with a much louder voice than “the People’s”.
Let me conclude by observing that it seems statically clear that if over 95% of all timeshare consumers who filed a complaint with a governmental agency received little to nothing in terms of regulatory relief, then there is something terribly wrong with the interpretation and practice of consumer protection in Florida (and many of the other states housing a significant timeshare presence). Statically, I would expect a 50% consumer recovery.
I submit the political climate needs to be tilted back quite a bit to garner support for the consumer and require the timeshare industry to function in a much greater social compliance role. For an industry that serves families, the lesson should be clear. It’s absolutely unfathomable to comprehend the present state of affairs between an industry with little social conscience and the consumer public that supports both the industry and the alleged government watchdogs, who apparently are neither watching nor doing much dogging.
Respectfully submitted,
Michael D. Finn, Esq.
Footnotes and References
[1] http://www.bbb.org/council/about/vision-mission-and-values/.
[2] Id.
[3] https://www.bbb.org/consumer-complaints/file-a-complaint/get-started.
[4] http://www.bbb.org/blog/2013/04/bbb-offers-tips-on-when-and-how-to-file-a-complaint/.
[5] https://www.bbb.org/consumer-complaints/file-a-complaint/get-started.
[6] https://www.bbb.org/consumer-complaints/file-a-complaint/nature-of-complaint/
[7] http://odrcomplaint.bbb.org/odrweb/public/ourbbbcomplaintprocess.aspx?bbbid=3.
[8] http://www.bbb.org/council/overview-of-bbb-grade/.
[9] https://www.ftc.gov/about-ftc.
[10] https://www.ftc.gov/faq/consumer-protection/submit-consumer-complaint-ftc.
[11] https://www.ftccomplaintassistant.gov/#&panel1-1.
[12] Id.
[13] https://www.ftc.gov/about-ftc.
[14] http://www.consumerfinance.gov/the-bureau/creatingthebureau/.
[15] http://www.consumerfinance.gov/complaint/.
[16] Id.
[17] Id.
[18] Id.
[19] Id.
[20] http://www.consumerfinance.gov/complaint/process/.
[21] http://www.consumerfinance.gov/data-research/consumer-complaints/
[22] http://www.consumerfinance.gov/data-research/research-reports/
[23] http://files.consumerfinance.gov/f/201407_cfpb_report_consumer-complaint-snapshot.pdf
[24] Id.
[25] http://www.myfloridalicense.com/dbpr/os/os-info.html.
[26] Id.
[27] Id.
[28] http://www.myfloridalicense.com/dbpr/os/documents/OrgChart8.8.13.pdf.
[29] Id.
[30] http://www.myfloridalicense.com/dbpr/os/os-info.html.
[31] http://www.myfloridalicense.com/dbpr/lsc/timeshare.html.
[32] http://www.myfloridalicense.com/dbpr/lsc/statutes.html.
[33] http://www.myfloridalicense.com/dbpr/lsc/timeshare/LSCMHTimeshareForms.html.
[34] http://www.myfloridalicense.com/dbpr/lsc/documents/complaint_english.pdf; or http://www.myfloridalicense.com/dbpr/lsc/documents/TimeshareComplaintForm-090914-HANDWRITTEN-REVISED.pdf.
[35] http://myfloridalicense.custhelp.com/app/answers/detail/a_id/665/kw/complaint.
[36] http://myfloridalicense.custhelp.com/app/answers/detail/a_id/661/kw/complaint.
[37] http://myfloridalicense.custhelp.com/app/answers/detail/a_id/668/kw/complaint/related/1.
[38] Id.
[39] Supra note 13.
[40] Id.
[41] https://www.myfloridalicense.com/prosecutor.asp.
[42] Id.
[43] Id.
[44] Id.
[45] http://myfloridalicense.custhelp.com/app/answers/detail/a_id/672/kw/complaint.
[46] http://myfloridalicense.custhelp.com/app/answers/detail/a_id/674/kw/complaint.
[47] http://myfloridalicense.custhelp.com/app/answers/detail/a_id/671/kw/complaint.
[48] http://myfloridalegal.com/__85256CC5006DFCC3.nsf/0/EC5743A729C962188525791B006A54E9?Open&Highlight=0,timeshare
[49] http://www.myfloridalegal.com/pages.nsf/Main/18A7753257FE439085256CC9004EC4F7
[50] Id.
[51] Id.
[52] http://www.myfloridalegal.com/Contact.nsf/Contact?OpenForm&Section=Consumer_Protection_Division
[53] http://www.myfloridalegal.com/pages.nsf/Main/20AFA53C4EC9E3EA85256CCB00522BE1
[54] Supra note 2.
[55] Id.