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   RCI Fraud Alert

One of the most provocative elements to the timeshare industry is the ability to deposit one's week in members-only exchange systems and withdraw from a vast database of eligible vacations. As simple as these programs sound, however, they have garnered a number of exasperated customers who claim that procuring a satisfactory swap is next to impossible. The largest and most popular of these exchange companies, RCI, was sued in the spring of 2006 by two independent parties; the class actions (now merged) are still lingering on in legal difficulties.

One Complainant in the suit, New Jersey native Murillo, hinges his argument against RCI on what he sees as false advertising. "A key selling point is that only members of the program can access the deposited timeshares," explains the lawsuit summary. "This concept of a one-for-one exchange exclusively among RCI members is RCI's bedrock marketing principle. Unfortunately, RCI creates this image of its program through a uniform fraudulent, deceptive and unconscionable marketing scheme." Few members have found the system as user-friendly as a "one-for-one exchange" would theoretically be; the lawsuit continues to claim that "no matter how far in advance [members] begin looking for an exchange, they simply cannot find any comparable exchanges. RCI profits by these practices at the expense of its members, whose time-shares and RCI 'benefits' are rendered virtually worthless."

The alleged reason for the exchange tangle is that RCI's week bank is hardly a "members-only" service. From the class action's website: "The lawsuit alleges that RCI improperly skims a large percentage of the timeshares from the RCI exchange bank system, including many prime timeshares, and rents those timeshares out to the general public for profit and also uses them for promotional purposes and as fringe benefits for its employees." The lawsuit summary further details that "RCI converts many of the prime timeshare deposits into cash, leaving much less desirable timeshares in the system for member exchanges." And the second lawsuit, also filed in New Jersey by Chase, makes the following claim: "RCI secretly enters into agreements with third-party vendors who purchase high-demand timeshare weeks which had been deposited by members and re-sell them to the general public through various Websites, while concealing any relationship with RCI."

If you're currently a member of RCI or considering an RCI membership and would like more information on this fraud alert, visit www.rciclassaction.com for further details on the lawsuit and legal updates.