What Timeshares, Debtors and Debt Collectors Have In Common
by Henry Meier
Many of us know someone who knows someone who got stuck with a timeshare in New Orleans. You know how it goes. Rekindled romance and one too many mojitos made the normally level-headed lovebirds decide that New Orleans was a great place to spend summer vacations. In the old days when you woke up from your hangover, you sheepishly paid off a mortgage and warned others against your folly. But today, you refuse to pay and instead bring a class action lawsuit when the debt collector comes calling. It would be amusing except these types of cases make borrowing more expensive for everyone.
Which brings me to the subject of today’s blog. A recent ruling by the Court of Appeals for the Second Circuit gave the court the opportunity to address an issue for the first time. The court held that the federal Fair Debt Collection Practices Act does not require debtors to contest their debts in writing after they receive notice from a debt collector of a past due debt. In Hooks v. Forman, Ms. Hooks and a friend were visiting Atlantic City in December of 2009 when they attended a presentation on vacation time shares sponsored by Windham Vacation Resorts. The presentation was apparently a good one because the plaintiffs agreed to purchase a time share. The plaintiffs subsequently explained that they didn’t realize that the document they had signed was a mortgage, which explains why neither of them made any required payments.
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