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Nightmare on "Exit" Street: According to Lawsuit Filed by Diamond Resorts, Couple Paid So-Called Timeshare Cancellation Companies Thousands of Dollars & Received No Legitimate Service, Only Financial Ruin
LAS VEGAS, Sept. 15, 2020 /PRNewswire/ -- Diamond Resorts®, a global leader in the hospitality, vacation ownership and entertainment industries, and victims of a timeshare "exit" scams are warning timeshare owners not to work with fraudulent third-party exit companies. Diamond has filed a lawsuit against Newton Group and DC Capital Law Firm, LLP for allegations of false advertising and fraudulent business practices. As part of its complaint, Diamond alleges that the Newton Group deceived former timeshare owners into purchasing illusory timeshare exit services.
According to Diamond's lawsuit filed through the Superior Court of the District of Columbia, Paul and Diane Reeves were first introduced to the Newton Group in 2017 when they heard radio advertisements claiming that the company had a "safe and legal" process to help owners out of their timeshare contracts. The Reeves also received a mailer from the Newton Group warning that there were new timeshare laws that allow developers to increase maintenance fees "with no restriction." This advertisement is undeniably false, as there were no such new timeshare laws, and it was designed solely to scare timeshare owners. The Reeves contacted the Newton Group and attended a presentation where they were promised a legal exit from their interest with Diamond Resorts – a promise supported by a 100% money-back guarantee. The Newton Group also told the Reeves that the exit would be completed within a year. None of these promises were true.
But, based on these false claims, the Reeves paid the Newton Group over $6,000 in upfront fees and waited for confirmation of their exit. In the interim, the Newton Group "hired" DC Capital Law Firm, LLP, and they both told the Reeves not to communicate with Diamond and to stop paying their financial timeshare obligations. Unbeknownst to the Reeves, DC Capital sent Diamond a letter demanding that Diamond stop communicating with the Reeves, in order to conceal from the Reeves the true status of their timeshare – which was default and foreclosure, due to the lack of payment. Despite Diamond sending delinquency and default notices to the Reeves, DC Capital never provided the Reeves with this critical information. The couple had no idea about the financial ruin they faced by following DC Capital and the Newton Group's instruction.
Indeed, it was not until 2019 when the Reeves received an IRS tax form identifying their potential tax liability that they reached out directly to Diamond and discovered that the Newton Group and DC Capital had no legitimate legal exit process. Instead, the Newton Group and DC Capital simply allowed the Reeves to go into foreclosure and touted it as a successful exit. The couple never wanted this outcome, nor the consequent credit reporting and tax-related issues. They were also unaware that there was no reason to work with a so-called "exit" company in the first place. The Reeves could have contacted Diamond Resorts to discuss changes to their contract without paying thousands of dollars in upfront fees and negatively impacting their credit history and finances.
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