Diamond Resorts & Timeshare Owners Warn of Newton Group & DC Capital Law's Timeshare 'Exit' Scams

Sep 17, 2020

Legal Newswire POWERED BY LAW.COM

 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 ColumbiaPaul 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. 


After the Reeves shared with Diamond Resorts how they were deceived, Diamond was able to reach an agreement with the Reeves to provide them with relief from the credit reporting and tax-related issues caused by DC Capital and the Newton Group. Unfortunately, the Reeves are still out the $6,000 paid to the Newton Group because, despite written demands for the return of the money and the Newton Group's 100% money-back guarantee, no refund has been issued. As part of the agreement with the Reeves, Diamond has accepted an assignment of the Reeves' claims against the Newton Group and DC Capital and is pursuing those claims against the alleged fraudulent "exit" company and "law firm."     


"Sadly, the Reeves' story is not uncommon, and thousands of other timeshare owners have fallen victim to these fraudulent companies," said Mike Flaskey, CEO of Diamond Resorts. "There is simply no need for these companies to exist other than to mislead consumers for their own benefit. Diamond Resorts and other timeshare developers offer a safe way for owners to exit their timeshare contracts without someone stealing their money. We encourage you to work with your timeshare developer directly. Save your money, protect your credit, and do not pay Newton Group or any 'exit' company thousands of dollars for a default and foreclosure."   


Facing numerous lawsuits for its deceptive practices, Newton Group has made desperate attempts to separate itself from other cancellation companies, including filing its own suit against Wesley Financial, yet another cancellation company offering no legitimate service. 


While the vast majority of members enjoy their vacation ownership, Diamond Resorts also understands that life circumstances can change. Diamond encourages timeshare owners who may be interested in adjusting their contracts to contact their developer for safe and legitimate options. To learn more about red flags and report possible fraudulent third-party "exit" activity, visit TimeshareCancellationAwareness.com.


About Diamond Resorts 
Diamond Resorts® offers destinations, events and experiences to help members make a habit of breaking from the routine. From unforgettable getaways to exclusive concert series to VIP receptions and dinners, members turn to Diamond to recharge, reconnect and remind each other what matters most. Our focus on quality resorts, customer service and flexibility means members can return to a favorite resort, book a cruise to explore new countries or attend a once-in-a-lifetime event with the same level of confidence and anticipation. With access to a world of entertainment and activities, a Diamond membership ensures that people are always looking forward to vacation.


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