Mis-Selling Regulations For Vacation Club and Apartment Owners
If you know anything about the Credit Card Purchase Process, or any industry for that matter, you will no doubt have heard of the new “mis-selling” regulations. These new Federal Regulations were created as a response to the widespread abuse of credit card companies by consumers. These new regulations are designed to make it harder for consumers to be taken advantage of. The new law requires all banks and other financial institutions to give consumers a full and fair chance to cancel a credit card for any reason at any time. It also requires the three largest credit card companies to allow consumers to cancel their accounts up to 14 days after the purchase.
The genesis of these new regulations actually comes from the Foreign Currency Broker Rules implemented in 2020. The Foreign Currency Broker Regulations were put into place by Congress to protect American consumers from unscrupulous foreign banks trying to take advantage of them by charging exorbitant fees and making false promises. In order to qualify for the Broker Rule, a foreign bank must register with the SEC. Once a foreign bank is registered, each broker relationship must undergo an annual review to ensure that the firm is meeting its obligations to the United States government. To qualify as a broker, a foreign bank must demonstrate it is in good standing with the SEC.
One of the primary objectives of the Consumer Credit Act 1974 was to prevent deceptive and predatory practices within the commercial real estate market. That is one of the reasons why the Foreign Currency Broker Rules were implemented. The purpose of the Consumer Credit Act 1974 was to change the way in which commercial real estate brokersd interact with their clients. This would prevent brokers from taking advantage of the clients by mis-selling them property. Many of the changes to the law affected how a broker could communicate with his or her client and how a broker could execute transactions.
The first regulation involved a stipulation that brokers could not require consumers to pay for a refund for a sold property under any circumstances. Prior to the implementation of the Consumer Credit Act 1974, brokers could charge consumers for a money back guarantee or charge the card company for a fee to cancel a transaction. The revised Consumer Credit Act 1974 permits the broker to charge the card company only if the consumer has opted to cancel the transaction. In other words, if the consumer has declined a particular offer, the broker may not have to pay money back to the client.
Another regulation affects the way a brokerage advertises the availability of short-term vacation clubs, deposit accounts and other fractional points. Under the FCRA, a broker cannot prohibit the advertising of these services. A broker may not tell consumers that they do not qualify for any of the products. Also, a broker cannot charge consumers for a consultation unless the consumer has expressed an interest in learning more about those products.
Mis-selling regulations affect the purchase of vacation packages as well. Under FCRA regulations, the consumer is entitled to a full money back guarantee for any vacation club or other fractional points offered. In addition, the regulations require that the consumer receive a document listing all of the available properties for sale. This document must clearly state all of the properties’ sales price and property location. If the broker sells a timeshare without providing this document to the consumer, the buyer may have the right to sell the timeshare but cannot receive the money back. If a timeshare is sold without the buyer receiving a full money back guarantee, the buyer may be able to sue the broker under FCRA law.
Mis-Selling Regulations affect the sale of lodging and boarding accommodations. Under the Fair housing Act, Americans who own vacation homes, motor homes, apartment buildings and similar lodging assets are protected from mis-selling. The Fair Debt Collection Practices Act further protects Americans who own vacation homes by requiring that they be given a reasonable opportunity to purchase or refinance their lodging and point away in an orderly fashion. The act requires that the homeowner receive proper notice of any foreclosure proceedings and also provides for reasonable collection practices. A third rule under the FCRA is that if a homeowner can show that he or she was a victim of fraud, the offending agency is not allowed to take possession of the property.
When you own property or assets, such as villas, homes, condos, apartments, lodge homes and board or vacation homes, you are not automatically entitled to FRCA protections. You should only expect FRCA protections when buying a timeshare or club suite points rights ownership through a real estate company that is licensed by the FHA. If you choose to buy these types of property and you are not protected by FRCA you are not protected by the real estate company’s contractual agreement and you should seek legal advice from a licensed attorney who specializes in FHA and RV FHA lawsuits.