Bluegreen Vacations Failed to Make Mandatory Disclosures to Military Timeshare Borrowers, Class Action Claims

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Bluegreen Vacations Unlimited faces a proposed class action that alleges it has failed to reasonably inquire as to whether potential timeshare loan borrowers covered by the federal Military Lending Act (MLA). 

The 25-page lawsuit moreover alleges the timeshare company, who also finances loans to consumers to buy interests in vacation timeshare memberships, has unlawfully forced military servicemembers to submit to arbitration or “other burdensome legal notice provisions” in the event of a dispute. The Military Lending Act, the lawsuit says, is designed to protect members of the United States Military from predatory lending. 

According to the case, the MLA requires Bluegreen, when lending money, to make a reasonable inquiry as to whether the borrower is a covered member under the MLA. Although a database exists to help lenders identify those covered by the MLA, Bluegreen, with 65 timeshare locations and tens of millions of dollars in timeshare loans extended, “does not make any inquiry when consumers, such as Plaintiff and Class Members, obtain financing, let alone a reasonable inquiry before offering financing to members of the United States Military,” the suit alleges. 

The complaint stresses that the MLA requires lenders to make certain mandatory disclosures to covered borrowers, including a statement of the military annual percentage rate (MAPR) applicable to the extension of credit; any Regulation Z disclosures, which concern how lenders convey to consumers the cost of borrowing; and a clear description of the payment obligation, which can be either a payment schedule for closed-end credit or account opening disclosures consistent with Regulation Z for open-end credit, as applicable. 

Bluegreen fails to provide any of the aforementioned disclosures, including an MAPR, the suit alleges. 

“Because of this, the APR in Plaintiff’s agreement discloses an interest rate of 16.990%, but in reality, if Bluegreen had complied with the MLA and calculated an MAPR, their MAPR interest rate is actually 18.097%,” the case claims, noting that violations of the MLA void from inception any credit agreement, promissory note or other contract. 

Upon information and belief, the suit says, Bluegreen’s MLA violations are part of a “nationwide scheme.” 

The plaintiffs, one of whom was on active military duty with the U.S. Army upon his and his spouse’s signing of a Bluegreen Owner Beneficiary Agreement with the defendant, look to represent all covered borrowers, as defined under the Military Lending Act, who entered into an owner beneficiary agreement with Bluegreen that did not contain a military annual percentage rate (MAPR) disclosure. 

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