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Royal Holiday Club (RHC) Screws THOUSANDS of Americans, Robert Paisola Responds

Dear Robert Paisola,

We are writing to advise you of the illegitimate business being conducted by the Royal Holiday Club (RHC) within Mexico. This company is successfully passing themselves off as a legitimate business and with their bad business practices are siphoning hard earned money from American citizens. RHC has a rating of ‘F’ for failure with the American Better Business Bureau.

We are a husband and a wife heavily involved in helping people in our community in different ways. This includes helping Mexican immigrants who have come to the United States and do not speak much English with their banking needs, so that their hard earned money is secured and managed properly. We live in California, but have been frequent visitors of Mexico for several years. We have always been impressed with the extremely high work ethic and kindness of the Mexican people, until now. On January 25, 2005 while on our usual annual vacation to Puerto Vallarta, Jalisco and after hours of being pressured by a taxi driver (named Angel) by the airport to attend a free breakfast and presentation, we finally agreed to attend. Angel advised us that by just attending the presentation he would get paid and be able to better support his family. He was very convincing and our hearts went out to him, so we wanted to help.

We had breakfast at the RHC sales office in the Los Tules Resort, and then we were paired up with a very high pressure salesman (named Claudio) who talked to us for hours adding incentive on top of incentive in order to convince us to sign a contract to buy Vacation Club Membership. This included promising 2-4 weeks a year at a 5-star plus resort and two free airline tickets per year anywhere in the world with no black out dates at any time - guaranteed. However, we continued to refuse the offers.

Even though we refused, he stood up, rang a loud bell and announced to everyone in the room that we were the newest club members and had everyone applaud. This was very awkward for us and we were extremely uncomfortable and embarrassed. He showed us paperwork with amounts that we would not agree to and then on top of that added fees and closing costs that were never mentioned during the presentation. We were initially advised that 15,000 points would cost $12,116, when actually we had to pay $14,835 due to fees, closing cost and sales taxes. We could not understand why there would be fees or closing costs on vacation club POINTS not related to any actual real estate. We refused to pay any additional fees, yet he continued to congratulate us on a membership we still did not agree to, served us Margaritas and wine in celebration, asked us for ID and a credit card. (I’m sure serving alcohol was just another tactic to get people to make a commitment when they are not able to think as clearly.)

When we continued to refuse to pay additional fees, he offered us an annuity for the amount we were paying with “Granthix Capital Financial Services” saying that we would get our money back (plus interest accumulated over the 30 years) after 30 years of membership. Additionally, they had offered us a number of free weeks and a cruise as incentives to sign. We were advised there would be no black out periods or holiday exclusions, that we could go to Europe or on cruises or basically anywhere such as Disney properties, etc. We were not given time to see/inspect any of those offers – as we had 30 days to cancel.

We finally agreed after five hours of pushy sales tactics and incentives geared to lure us into signing a contract to buy 15,000 annual credits. The sales person (Claudio) and Veronica Aguirre De Los Reyes had us sign lots of different pages/papers without giving us enough time to read anything. All they kept saying was, “don’t worry, you have 30 days to cancel the contract for any reason, just sign the contract now, enjoy your vacation and when you are back home read the contract and if there is anything that concern you let us know”

Once home, a few days later, when we actually did read the entire contract, we discovered it was not what was offered and agreed to, and that we had been victims of a clever scam. None of the incentives we were promised were included in the contract and instead there were several exclusions and restrictions we were not previously advised of. Our contract also stated ‘This agreement cannot be cancelled by either party….”, even though we were told we had 30 days to cancel. This is fraudulent according to Mexico Law. The contract also stated that we agreed with the club’s rules/regulations which we had not been given a copy of to read.
On January 28, 2005 (3 days after signing the contract and within the five-day cancellation period) we called RHC and requested to cancel the contract. We were placed on hold for an unreasonable amount of time and transferred to multiple people all stating the same thing, “I am sorry, I am not the person you need to speak to, let me transfer you” (some of the people we spoke to were: Rachael, Lisa Aranda, Marco and Richall) Unfortunately, we got the run around and no one was able to help us. We were threatened and told that the contract could not be canceled and that if we did not pay the remaining portion of the promissory note and the annual maintenance fee, RHC would report us to the Credit Bureaus and ruin our credit. All the individuals were extremely rude and unprofessional to us over the phone.
On February 2, 2005 we mailed a certified letter to RHC requesting a cancellation of the contract and a full refund. On February 15, 2005 Patrick Buchanan (Spokesman of the Board of Directors at RHC) mailed us a letter refusing our request to cancel the contract because Clause 6 on our purchase and sale agreement reads: “This agreement cannot be canceled by either party...". However, we know that this clause in the contract is in direct violation of Article 56 according to Mexican Law (ARTICLE 56 OF LEY Federal de Protección al Consumidor)

After a month or so of disappointing disputes and being forced to pay off the promissory note and maintenance fees, we decided to try to get the best out of this “Vacation Club Membership”. However, over the past two years we checked the RHC website to book a vacation realizing that 15,000 credits are only enough to go for 1 week to a few RHC locations (mostly in Mexico) out of 3,000 locations around the world that RHC claimed we would have access to. Furthermore, of these few locations there are only a few weeks during the year that the rooms are available and if the resort is an “all inclusive resort” members are subjected and forced to pay ridiculously higher rates for the food/beverages. Initially, the salesman asked us lots of questions about how we take vacations and only presented us with the one plan of 15,000 points, indicating that this would meet our specific personal vacation needs. Obviously, his assessment of our vacation needs was not accurate and we were misled into purchasing a plan that is basically useless without having to spend additional money.

The language in the contract states that we can cancel if the company was in default of their obligations in any way, which RHC obviously is. We have made additional attempts to cancel the contract via mail/email but have received no good response.
A few months ago we decided to confront RHC again to have our contract cancelled and get a full refund. In researching how best to do that, we found many websites full of people that have also been victimized by RHC and who were trying to get out from their contracts. We found that RHC is a habitual fraudulent business.
I filed a complaint with PROFECO this year, but apparently they can only help victims within one year from the date the contract was signed.

RHC claims to be one of the largest and most successful vacation clubs in the world, however they are also one of the most dishonest and despicable organizations whose success is based solely on misrepresenting and scamming others. They further claim that their company has always been careful to comply with the local laws of all countries they operate in; however this is a false statement.

According to The Federal Consumer Protection Law of Mexico, they have violated the following rights:
- Right to receive sufficient and truthful information about the products acquired (Articles 32, 33 & 34 of the Federal Consumer Protection Law)
- Right to receive guaranties in clear and precise terms (Article 78 of the Federal Consumer Protection Law).
- Right to receive clear and sufficient information about the acquisition of time share. (Articles 64 & 65 of the Federal Consumer Protection Law)
- And probably many others.

Furthermore, there are thousands of new and old Royal Holiday victims all over the internet consistently reporting RHC as a company that misrepresents the services they claim to provide, and that RHC refuses to honor the five-day Mexican right of cancellation policy. Obviously, we are not the only ones being subjected to this type of unprofessional and dishonest experience.

As I’m sure you can imagine, this has been the most disappointing and frustrating experience of our lives. We are pleading for your assistance in helping us to resolve this matter by releasing us from this fraudulent contract and getting a full refund.

Thank you in advance for your attention and cooperation in this very serious matter.

Giacomo & Violet
Walnut Creek, CA 94597

P.S. To provide you with some additional background on the multitude of problems that other people have had with this company, I have included the following websites for your reference: (search for Royal Holiday) ---> (search for Royal Holiday)

There is also a Yahoo group called Royal_Holiday_scam which includes more then 1000 members.

1 comment:

Jean-Pierre said...

While we were on vacation in December 2008 (November 28th to December 5th) in Cozumel my wife and I were approached to visit a resort and get a free lunch in exchange to visit the resort with the pretense that the resort was just rebuilt after the huricane and they wanted tourists to rediscover it. So we went.

What we got there was a sale pitch for a "holiday membership" with which we could travel the world for the next 30 years with our travel cost fixed (not getting higher year after year). After three hours of talks where the offers seemed always better and better, we signed... The worst mistake ever.

We signed a contract for 30 years, for 30 000 points per year, for 25 0000$US of which we a downpayment using our credit card for 8 750$US, having to pay 450$US per month for the balance for the next 3 years.

Almost immediatly that same night we started to have second thoughts but we decided to sleep on it. Before leaving Cozumel, the day after, we call their help-desk from the airport and told them we wanted to cancel. But they told us they could not do it yet because the contract had not been processed yet and was not in the system. They told us to call back when we were back home.

So the next Monday I call back, and still the contract was not in the system. I tried calling again during that week and finally I did receive an e-mail on December 20th sending us our password to access the site, stating that we had requested it! I call the helpdesk and they told us that they can't cancel our membership because we were passed the 5 days cool-off period!!!

During the Christmas holidays we were not able to contact anyone and then in January someone in Finance (Nancy d'Argence) contacted us to welcome us to the club. I told her I wanted to cancel my membership but she told me she could not do anything for us except refinance. So she gave us a refinance offer which would have cost us thousands of dollars more in the end (for lower monthly payments). We refused.

She then said that the only thing we could do was to resell our membership. And when we bought the membership I specifically asked if it was resalable and they told us that they sold easily, quickly and for a profit. So she gave our names to their sales department which in turn gave them to a broker in the States (Global Resort Services), which contacted us. I talked to the broker and they told us that we could get 29 000$US for our membership! Wow, we're even making a profit. We had to pay 600$US for the account and the publicity they would put out.

I called the broker about once a month but nothing was happening. So in April I started to do more researchs on the Internet and realized that there were a lot of people in the same situation as I was and moreover the only information I got on people that had been able to resell their membership was for about 10% of the price!

So I'm now in communication with a law-firm in Mexico that specialize in this kind of rip-off (I can't tell their name yet because I still not on a retainer with them).

So this is was they promised us: fixed vacation cost (about 2 weeks) for the next 30 years.

This is the reality: you have to pay an annual fee (465$US now) that can and will go up with the years; you still have to pay for your food, which will go up; and finally you reserve based on a point-basis, so today with 30 000 points I can get 2 weeks, but in 2 years it could cost me 40 000 points. Plus they told us that we could easily resale our membership for a profit, which is false. And finaly they told us we had 5 days to cancel but we got the turn-around with their helpdesk until it was too late.