Victims of the Royal Holiday Club timeshare operation are fighting back with websites and news stories publicizing the fraudulent practices of this business. In addition, a major television newsmagazine is gathering stories of victims for a possible segment on their show. It also goes by the name Premier Royal Holiday.
Groups with names like "RoyallyScammed", Royal_Holiday_scam, and Royal-HolidaySucks, have all been started by victims of the company that targets travelers on vacation to get them to sign illegal contracts and relieve them of thousands of dollars. RH has sales agents primarily in Cancun and Cozumel, but also in the Bahamas and other Caribbean locations.
They have joined to share their stories, tips on how to help new victims get refunds, and press for changes that will put Royal Holiday out of business. So far, their one small victory has been to get Royal Holiday to stop listing Hyatt, Marriott and a host of other big hotel chains as 'affiliates' on their website (although RH still makes this claim in their printed material).
Other changes they would like to see are the credit card companies refusing to process incoming charges from this fraudulent company, or at least immediate process chargebacks on the basis of a fraudulent transaction (rather than a mere contract dispute).
How does this happen to supposedly intelligent adults?
"They're so slick. They have this veneer of respectability because they have a huge office off the main lobby of the hotel," said one victim on the RH scam site. RHC does not actually own any of the resorts in their slick, thick catalog. They claim at least part ownership; in fact they nervily claimed in a letter of Dec. 2004 that they had just acquired the "Park Royal Los Cabos", and also that they had added a "strategic alliance" with Mexicana Airlines so as to offer its members special packages.
In fact, the sales reps for RHC make up anything to get a sale. They offer fictional air packages/discounts/flyer miles; they offer fictional golf packages; and lately they reportedly offer fictional annuities!
Mike, the head of the Yahoo group, Royal Holiday scam, has summed up all the company's angles very succinctly.
"The key points that I believe should be emphasized are (especially #13): 1) They hound you in the lobbies of reputable hotels (so the hotel is complicit) to give you the presentation so forcefully that it ruins your vacation. 2) They often serve drinks and offer amenities and spend hours at the presentation to get you to join. 3) They offer selling your timeshare at inflated prices to pay for your membership – They gave me a certificate for $14,500 from Century 21 which was bogus. 4) They promised that my 15,000 points would get me a two bed oceanfront suite which they showed us – another lie and typical scam tactic. 5) They said that Royal Holiday was an exclusive club and as such was all inclusive – another lie and typical scam tactic. 6) They claim that Royal Holiday has part ownership of most of their resorts - another lie and typical scam tactic to give them credibility; in fact, they rent out blocks of rooms at deeply discounted rates which translate to very poor service for those rooms. 7) I charged the down payment to my credit card for $3087.50 (and have the voucher) but when I got my bill they changed the amount to $3875.50 another tactic reported by several members here. 8) They say that you can cancel with 10, 30, (45 days in my case) but do not honor your requests to cancel and delay you until your options run out - another common problem. 9) They charge you credit card at will without authorization unless you report your card stolen - another tactic reported by several members here. 10) They charge you ridiculous fees at the first sign of a hurricane repair property they don't even own. 11) Their service is terrible if you actually do try to use them – they charge you so many fees that the cost of the vacation is almost always greater than what you would pay if you simply booked it through an online agency such as Travelocity. 12) Once you realize that they are a scam and decide to stop paying, they call you incessantly at home, make threats and get very belligerent – lying all the time again to delay any compensatory action on your part. 13) Credit card companies seldom honor fraud complaints and seldom refund your money – VISA or MC should remove Royal Holiday as an authorized vendor. MAKE THIS POINT LOUD AND CLEAR!!!! 14) They report you to American based collections agencies (Monterey and Concord Servicing) with whom they have million dollar contracts with Royal Holiday to collect charged off debts – accounts that are over 90 days and given up for lost. These collections agencies are aggressive and abrasive, violate the fair trade and debt collection laws, and have been known to file complaints against a couple of our member's credit report. 15) Most often relief is only attained after a long hard stressful battle with them through the PROFECO – the Mexican consumer protection agency."
Another victim, Diane Sgro of Connecticut, said it is partially the government's inability to hold timeshare developers to their contracts that has compelled her to dissuade all of her friends from investing in Bahamian timeshares.
"We got Hoovered," Sgro said. "I tell every-body...(The Bahamas is) just not worth it. As much as they put out that there are laws, there's nothing there."
Charles, the founder of the online group Royally Scammed, was also a victim. "My wife and I got scammed when we went to Cancun, Mexico. We never owned a timeshare but everything they told us sounded good. We travel quite a lot and thought it was a reasonable deal. The problem is that Royal Holiday will lie to anyone just so they purchase the membership. Almost everything they tell you about the membership is a lie. I can't believe they continue to scam people." His site is at www.royallyscammed.com
KING5 television news ran an excellent story last fall on the problems with the RH contracts.
KING 5 had University of Washington law professor Kate O'Neill look at [one victim's] contract.
[reporter]: "Would you sign that deal?"
Kate O'Neill: "I hope not."
O'Neill points to several clauses in the contract that all prospective timeshare owners should look for. Here's one: If the [victims] want to sue Royal Holiday, they'll have to make a long trip.
"The purchase and sale agreement says the governing law will be the law of the state of Mexico City," O'Neill said.
The contract also has customers sign a merger clause.
"They are very dangerous clauses for consumers to sign," O'Neill said.
The merger clause basically means verbal agreements can't be added to the contract. Though the salesman told the [victims] they could sell time back to the club, there are no rules for that in the contract. So they are out.
"I doubt my typical first-year law student would understand what this means until after I teach them contract law," O'Neill said.
The full story can be accessed online here at http://www.king5.com/business/stories/NW_101707INV_timeshare_KS.1789c8d63.html
Victims of the Royal Holiday scam are encouraged to join any of the groups to share information and fight back. They give email or web addresses of the appropriate governmental and private consumer offices where you might get your refunds or make changes to business laws inre dealing with foreign companies. Some members of the Yahoo group have had success listing their story with the Squeaky Wheel.
The FTC is reportedly interested in complaints; one rep said that "if they get enough complaints from people they can stop them from operating, it has to be a group tho, not just 1 or 2 individuals."...I'm sure the info is out there already, but if for some chance not it is 1-877-382-4357, or www.ftc.gov/credit.
Another victim who was successful in getting a full refund says, "go here to write the Mexican Administration for Tourism: http://www.sectur.gob.mx/wb2/secturing/sect_8509_mailbox. As you can see, if you are persistent, you too can get all money returned and out of the contract. Do what she did, and you too will have good luck. Mexico does not have class action suits, and since these agreements were signed in Mexico, you can not file a class action suit. What you can do, is use the power of the Internet, be heard, share your story, and as others join in we are more powerful than a class action suit."
Major hotel chains, credit card companies, and travel agencies all seem complicit by at least turning a blind eye to slick scams operating in their midst. It would help if the government travel warnings from the State Department, etc. were more explicit about fraud. Only the Florida Attorney General's official warning is more explicit, although its office is little help after the fact. You can read their warning here: http://myfloridalegal.com/newsrel.nsf/newsreleases/22334FF77D6CFA10852573170044A67A: "Beware Foreign Timeshare Investments" and from the Florida consumer affairs office at ConsumerAffairs.com at http://www.consumeraffairs.com/news04/2007/07/fl_timeshares.html.
Knowledge is power, but few travelers think to check online before signing any contracts while on vacation.
The text of this article is Copyright © 2008 Minnie Apolis. All rights reserved.
AMENDED TO ADD:
I have come across a suggested template for a letter to the credit collection agency used by Royal Holiday (RMI). It cites specific consumer law or regulation, and should be very effective. It should be worded something like this:
Account Number: (insert your account number here)
Dear Sir or Madam:
This will serve as your legal notice pursuant to the Fair Debt Collection Practices Act, 15 U.S.C. Section 805, to cease and desist all further communication with me in regard to the above referenced debt or debts. You are hereby instructed to cease collection efforts immediately or face legal sanctions under applicable Federal and State law.
If you fail to heed this notice, I will have grounds to file a formal complaint against you with the Federal Trade Commission who is responsible for the enforcement of the FDCPA and with the Attorney General's office.
I have decided that I will not work with your collection agency or any other collection agency under any circumstances. I am disputing the charge with the original creditor. By sending this letter, it is my intention to stop all phone calls and collection activity from this day forward.
I also reserve the right to file suit against you for any future violations of this law. I may utilize telephone recording devices to document any telephone conversations that we may have in the future if you fail to comply with this cease and desist letter. You are also notified that should any adverse information be placed against my credit reports as a result of this notice, that appropriate action will be taken.
I intend to keep a log of any contacts you make with me after you receive this letter. In addition, you may not contact me at my place of employment as my employer forbids such communication. Please give this very important matter the utmost attention.
And then do it! Keep a note pad by the phone to make a note of any phone calls that come from a collection agency after sending this letter. You will need to note the exact date and time, and brief summary of what was said.