Original Message:
Re: Be careful about taking advice from the Timeshare Users Group (TUG) (by Susan B.):
@ Tracey: "From your conversations with DRI owners and various lawyers have you found any lawyers who have actually had DRI contracts nullified for their clients AND recovered any money spent"
ABSOLUTELY. You have to understand where the developer is coming from.
DRI rarely allows anything to go all the way to arbitration. The only case I know of is found on the website of a west coast "surrender" attorney. He recovered the client's $40,000 purchase money PLUS his fees. This appears to be the only case he has ever tried to litigate because his business is obtaining surrenders.
Why aren't the rest of the successful cases public knowledge? Because developers rarely allow anything to go all the way to arbitration. They have huge incentives to prevent that from happening. First, they have to pay the cost of the arbitration, which will usually be thousands of dollars.
Second, if the developer doesn't settle the plaintiff has the right to conduct discovery related to his claim. For example a plaintiff who sues for lack of available rooms, gets to find out exactly how DRI is allocating the space in their resorts. The developers are free from all oversight on this and many other issues. The only way anyone is going to get access to those records is through litigation. It makes a lot more sense to pay off any potential litigant than to have their records reviewed.
Third, if the developer loses arbitration, which it probably will, it could end up paying a full refund x 3, and they will have to pay attorneys fees. Their economic risk is worse than "double or nothing". It is more like quadruple or nothing. No sensible attorney takes those odds if he can avoid it.
Finally, if the case goes all the way to arbitration and the developer loses, the plaintiff is free to publish his success story. We have no idea how many people actually obtain refunds, but I have reason to believe it is at least 15% of all sales. Can you imagine how many lawsuits would be filed against the developers if people knew they could win? The developers would suffer devastating losses and their whole business model would fail. It is imperative to their survival that the general public buys into the ridiculous notion that they should not bother trying to find an attorney to represent them. In sum, it is far cheaper and wiser to settle with a plaintiff and get him to accept a non-disclosure agreement. The result of the settlements is that there is no public indication that anyone ever gets a lawyer and obtains a refund.
This is where the surrender industry comes in. Surrender companies have a huge presence on line and they claim that they have obtained "tens of thousands" of surrenders for their clients. The average consumer sees those claims and assumes if that many people have decided a surrender was their only option, they must be right. They don't see any evidence on line of the many people that do obtain refunds. They buy in to the myth that an attorney is going to charge them an hourly rate and they will eventually lose the case anyway. All of these "facts" are the gospel on forums like TUG. The result is that the public is successfully misdirected and the majority of consumers will accept defeat without even trying to find an attorney. Many of those that do will look for an attorney that "specializes in timeshares" and most of those attorneys are actually selling surrenders.
This whole process of misdirecting the public is just another aspect of the TS con game.
"What is the average they have recovered per client and how many timeshare clients total have they worked with? What is the average fee collected directly from the timeshare client and what is the average fee collected (if different) for a client who was unsuccessful recovering any funds and/or being released from contract where a mortgage is still being held on the timeshare?"
The non-disclosure clause prevents attorneys from giving out any verifiable information about his successful cases! As far as what fees are charged, no lawyer is going to publish that information. I can tell you that attorneys have a huge incentive to work on a contingency fee, because DRI's will pay their fees if the arbitrate and win. As long as an attorney sees the potential to win the claim, he has nothing to lose by taking the case.
I've revised my own advice to never pay anyone up front. There is a legitimate reason for an attorney to require an up front fee, even if he is certain that DRI will eventually pay his fees (whereupon he would refund the retainer fee to the client). In TS cases there is a good chance an attorney will represent an out of state client. The attorney could put in many hours on a client's case only to have the client decide to drop the case later for some reason. In that case, the attorney needs to know he will be paid for the work he has done and it's hard to collect from an out of state client. If the attorney had a retainer fee he knows he will not get ripped off by a fickle client! I would expect the retainer fee to be under $3,000.
Nice talking to you!