The Timeshare Beat
May 22, 2001
Due to the interest shown by people regarding the subject of the RCI Points program, The Timeshare Beat's weekly
newsletter titled The Shadow Knows (subscription-based and free at http://www.thetimesharebeat.com/shadow.htm)
has begun an investigation into RCI Points, beginning with the May 14 edition. In that newsletter the specific
subject of what is written in the contractual agreement between RCI and consumers was addressed, with a few side
notes on other matters. Because many people heard about it after the fact and did not get the chance to read it,
we are reproducing it here.
The Shadow
I will be the first to admit that I am rarely shy or lack words but I have had a rather difficult time deciding
where to begin regarding the former GPN (Global Points Network), now called RCI Points.
I also have mixed feelings about RCI, specifically in relationship to the fact that they have an entire Army of
TS sales folks ensuring their success, yet RCI does not pay these good people etc.; but overall, as a company,
product and service, I would give them a 'B' grade.
As for the RCI Points system, well that's another grade altogether. There are different camps that are and will
be affected by this system including timeshare owners, the developers and their staffs (who sell RCI Points) and
those few marketing companies who have the contracts to 'certify' and 'train' those sales people (and of course
RCI itself).
I have read all the documents that RCI sent to us, and although it appears that there may be 'some' documents that
were not included, for whatever reason, having evaluated the information that was sent, this is how I see
the reality and truth behind the RCI Points system.
Let's start with "The new and improved Tide (laundry detergent)…"
You've seen the TV commercials, heard on the Radio (or read in magazine ads etc.) where the announcer, often a
very well paid celebrity, is attempting to convince or persuade the audience they need to purchase more 'TIDE'
because...
'…It's better, more sudsy, more this, that and the other thing…' when in reality, it is simply the same soap, packaged
in a differently shaped box.
Sure, to be 'legal' TIDE may have added an insignificant new (or different) ingredient, color, odor etc. but the
objective is to simply get us to buy TIDE and nothing is really 'new and improved'.
I believe that I could now write a thesis on RCI Points, receive my doctorate and with mortarboard and gown in
tow, as Dr. Shadow, Ph.D., I could command exorbitant speaking fees and share my grand wisdom with audiences worldwide.
(Don't worry. I will cut to the chase.)
In a nutshell, that 'detergent' approach is the same with the RCI Points system as far as I can determine. It appears,
again based on the documents that RCI sent us, this new and improved 'detergent', well, it seems they left out
the better shaped box and/or color, so to speak, and as for the odor, well, you decide.
First of all, I cannot find any new and improved 'stuff' with the RCI Points system (in terms of travel benefits)
that they don't already offer RCI members (and guests) etc., and as hard as I've looked, except for the 'price
tag' and more 'restrictions', it's the same soap.
RCI (for as long as I can remember) has always offered and sold their members additional travel products/services
such as airline tickets, car rentals, cruises, nightly hotel accommodations, two and/or three (nightly) 'Weekend
Escapes', guest stays, bonus weeks etc.
If you doubt that, don't believe it or simply didn't know that these (and more) travel products/services are in
fact available, then I invite you (assuming you are an RCI member) to get out an old RCI directory and reacquaint
yourself with those services.
You will find these travel opportunities listed in the 'Benefits' and 'RCI Travel' section in the front of the
directory (e.g. 1999-2000), as well as additional product/service offers available to RCI members in RCI's Endless
Vacation Magazine.
As for those RCI Points 'restrictions' that I mentioned. Well, they seem countless in that anyone who signs the
'RCI POINTS PARTICIPATION AGREEMENT' essentially is giving ALL control and rights of their vacation time and benefits
to, you guessed it, RCI (throughout the duration of their vacation plan in the points system).
In the 'DISCLOSURE GUIDE', it states, in the 'PARTICIPATION IN THE NETWORK (clause), section 4, (and I quote) the
following.
"The Network uses a Deposit system. By executing a Full Member Network Participation Agreement, the Member
Deposits with the Network all rights of use, occupancy and enjoyment in respect to his or her Vacation Time, all
rights, privileges, and entitlements as the same relate to the uses and enjoyment of such Vacation Time, and an
exclusive easement over, on and to the Vacation Time, inclusive of rights of access, occupancy, use and enjoyment
of the Vacation Time. The Member retains title to the Vacation Time, subject to this Deposit. The Deposit is for
the benefit, use and enjoyment of the Network Administrator (that is RCI) in accordance with the Network Documents.
Any sale or transfer of a Member's Deposited Vacation Time shall be subject to the Network Participation Agreement.
The Deposit shall be for a term equal to the stated term of the Members Network Participation Agreement, subject
to the Network Documents."
WOW, was that a mouthful or what? You better read it again, 'cause if that didn't gag you like it did all of us
who read that clause (and the rest of the documents), well then I have some 'stuff' I want to sell you TODAY, and
oh! What a deal….
Now if that didn't choke you, try this. RCI also wants to control your vacation rights, use and benefits, believe
it or not, in perpetuity, or at least have that option, should they so select. It states in the RCI Points Participation
Agreement -and again, I quote- the following.
Section 'E', TERM OF PARTICIPATION AGREEMENT. "Five (5) years beginning on the Beginning Date of Initial Use
Year Listed in Section C above." (That's just the first FIVE years but on the backside of the RCI Points Participation
agreement, naturally in 'small' print it states the following:)
"Terms and conditions of RCI POINTS NETWORK MEMBERSHIP", section "6. Membership Renewal. This agreement
shall renew on the same terms and conditions as set forth herein and you will be deemed to have elected such a
renewal unless the Network Administrator receives written instructions from you declining any renewal at any time
before twelve (12) months prior to the last day of your last Use Year under this agreement. The instruction shall
be addressed to the Network Administrator at the following address. RCI Points Network, 9998 Michigan Road, Carmel,
Indiana 46032. You hereby acknowledge that this period is reasonable, as the Vacation Time may become subject to
Reservation by another Member any time after the above-referenced period."
That means, any person who signs this agreement has automatically granted all their vacation rights and benefits
to RCI for the first 5 years, with an automatic provision for the next 5 years and nowhere in the RCI documents
is there a definitive conclusion to this contract.
In fact, not only does RCI want to control virtually every aspect of a timeshare owner's vacation use and benefits,
they also (and if you sign, you agree) demand (and again, I quote-the following):
Section 5, 'Network Procedures and Obligations'. "This disclosure guide and the network documents, including
the rules, are subject to change by the Network Administrator (RCI) WITHOUT advance notice, including, but NOT
LIMITED TO, fees, benefits and reservation procedures and priorities".
I.E.: Those who agree to purchase RCI POINTS thus grant to RCI (by signing the RCI documents/contract) that RCI
can do whatever they want with your vacation benefits throughout the duration of the agreement/contract including
costs, policy and procedures without notifying the participants in advance.
THAT MEANS ANYTHING AND EVERYTHING including the value of your RCI points, creating new fees, charges and/or dues.
By signing their agreement, you have basically surrendered all your rights and controls and RCI does in fact call
all the shots etc., etc., etc.
The bottom line for timeshare owners who are being convinced that RCI Points is a good program and worthy of thousands
of their hard earned dollars (up front) is fetid at best, ESPECIALLY considering TS owners already (as RCI members)
have the travel benefits I previously mentioned.
As for marketing companies such as Shari Levitin and Associates (and others) who are proclaiming that 'traditional'
timeshare is out dated and that 'Points' are the best thing since sliced bread, so to speak?
The long story short is that these companies are totally out of line with their claims and assertions and in fact,
because of the existing RCI benefits for TS owners, these 'marketing' people are merely self-serving at best and
are only interested in the 'dollars'.
Yes, it's the money, gang. I won't dwell on the contractual structure that these marketing folks have with RCI
other than to say the contracts appear to be equivalent to MLM (Multi-Level-Marketing) schemes and 'pay-out' plans.
These marketing companies convince developers to take on the Points system, get the sales staff all jazzed up,
do a bit of training, and then while those sales people work their buns off over the years, these companies (apparently)
continue to get a cut of the 'action'.
As for the developers that have signed on to the RCI Points system. That is a bit complicated, but for now, there
are a couple of simple and basic reasons that I will share.
The first being that most developers have never sold the TS product/service (aka: 'never sold a week in their lives')
and don't even know that all those travel benefits are in fact available (and have been) for RCI members already.
(I.E.) The aforementioned marketing companies (and RCI) sell the actual benefits of timesharing to the developers,
under the guise of RCI Points, and some developers think, hey, that's a pretty darn good program, and get involved.
(Side Note: There are in fact way too many decision makers in this industry who don't have a clue about the TS
product/service and they are kept in the dark by sales management who are equally unaware of the realities of the
existing TS product/service etc.)
Developers have also signed on to the Points system because it is a well known fact that TS owners often freely
and willingly attend presentations but (most often) tell the sales person that they '…would buy, but we've got
to get rid of our other TS first….'
For years now, many developers (and sales people) have not appreciated the time and expense of dealing with TS
owners in a presentation. Now, however, they have a 'new and improved' product that they can sell to TS owners
that eliminates the TS owner's ability to say (object) '…to get rid of our other TS first…"
That of course leads to what the consumer is paying for this RCI Points based system in the first place, and from
the reports that we receive it appears that developers can pretty much charge what they want and the 'price' seems
to be in the $2-3,000.00 range.
Readers would be shocked if they knew to whom and how that money is allocated. I won't take the time today to break
it down other than to say that you can send me the $3-K and I will launch The Shadow Global Points International
Travel and Leisure System wherein you too can…
To those Doubting Thomas out there who in all likelihood will write me and claim this, that and the other thing
in favor of the RCI Points system, please read the documents before you share with me.
Unlike the 'sizzle' of a sales presentation, ultimately it is the words of the contracts that describe all rights,
duties, obligations and commitments etc. between the parties that sign the documents, and not the interpretation
of the sales brochures, opinions etc.
I should also note that I have been speaking on the phone with industry insiders this past week who have also read
the documents, and all agree that the system (as it is currently designed and being offered) is not in the best
interest of the consumer.
So why then has RCI spent (allegedly) millions to developed a system that we (and others) feel is a bad deal for
the consumer and that States such as N. Carolina are challenging RCI (in terms of Points being a travel product
or a TS offering subject to state registration).
The answer might very well be (as an RCI Points manager told The Beat in an interview during the recent ARDA Convention),
"…to assist the developers with the resale issue and control the resale market…"
That makes sense to this writer (and others) as I have long proposed, and written on several occasions, that I
believe there is an agenda out there in TS land to make the 'traditional' TS inventory, specifically in the resale
market, both financially and functionally obsolete.
If RCI were to be successful in getting the majority of developers that are currently selling inventory to include
the RCI Points system with their TS offerings this agenda could happen and in fact would force the hand of those
developers that are currently saying no to 'RCI Points'.
Further, if RCI is able to contract with key resale companies (as they are attempting to do) and authorized those
companies to sell RCI Points, that would insure that countless existing TS owners/plans could become unattractive
in terms of future use and/or marketability.
Whatever the ultimate agenda is for RCI (including those behind the scenes cooperative developers and marketers)
I want to leave (and you) them with a simple thought and truth.
I highly recommend that instead of listening to the Attorneys who wrote up these documents, wherein RCI wants it
all and guarantees zip, first listen to the TS people that sell the RCI exchange system (and TS) as well as listen
to their customer base.
It is there, and there only, where RCI will be able to develop new products and services, and had RCI been listening
to these people for the past few decades, I submit that today I would have introduced a truly new and exciting
travel product and service.
And that's the inside story.
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