DVC Commercial Use Policy added to POS

[JimMIA]

That audit software also makes it easier to find - the same associate member search and excel spreadsheet that would spot Daddio (if they decide that is a problem) would likely find a family business with multiple contracts where everyone is an associate on everyone else's contract. Though its possible that they all just know each other's social security numbers and claim to be the owner on the phone.

OR...once you find one name, do some straightforward public records database searches (outside DVC) and find out who that person is related to or has a business relationship with. Then run those names against the member rolls. If you get any hits, check those accounts. Guess what? Those accounts are gonna look just like the first name you got.

Then, imagine the fun if you throw all of those related DVC accounts together and analyze the activity of the whole family of accounts. You could get not only a clear picture of each account, but a "big picture" look at how the whole enterprise was operating.

OR...you could do it backwards -- which is actually what I would do if I was looking for speculative booking specifically. Do a search of all reservations for arrivals between November 15 and December 31 which had a subsequent name change on the ressie. Would those all be bogus? Of course not, but that search would sure give you a good starting point, if, in fact, DVC has any interest in stopping speculative booking. For example, how many of those bookings came from the same account or family of accounts?

The approaches DVC could take, if they wanted to, are limited only by the auditors' imagination.

 

[Y-ASK]

Yes, they would easily fly under the radar of the MS CMs booking ressies.

However, if and when they come to DVC's attention, the whole ballgame changes...if DVC wants it to. That's a business decision DVC has to make, but if they decide to go after someone, they won't have any problem identifying every transaction and every account they've ever been involved with.

Yep! That is exactly what I was trying to say. It'll be a hugh can of worms if you over book one account and they audit.

Where are the Wechslers now? Has anyone kept track of them? I don't seem to be able to find anything.

I would think you could do the normal FL County lookup and see if they still own a bunch of points. I'm pretty sure they could never use the amount they own for personal use and still maintain the maintenance fees.


Y-ASK

 

[crisi]

Jim - have you seen what the Lexus fraud searches can do? It can figure out that my sister (with a different last name) and I are sisters (therefore she would be a valid user of my points), that I'm married to my husband and he went to college with my friend Andrea and that she is married to Ted (all four of us have different last names). That I work at the same location as Dan, and used to work with Al. Its AMAZING - and big companies are using it to check transactions for suspected fraud. If I order something from a big ecommerce site using my husband's credit card and ship it to my sister, it will get held for a fraud check, Lexus will show we are married and that the shipment is going to a relation, and they'll pass it through based on the rules they have.

 

[Y-ASK]

As for renting I am not against it But if you have 1000 points and book resevation at the same resort for the same time period that takes away from other members.

A 1000 points is nothing, 3-4 reservations at the most if you're smart. The discusion is certainly interesting but I hope it doesn't turn into a "Owner's who rent" bashing thread. Commerical renting has been defined which is a very good thing.

Y-ASK

 

[TisBit]

That audit software also makes it easier to find - the same associate member search and excel spreadsheet that would spot Daddio (if they decide that is a problem) would likely find a family business with multiple contracts where everyone is an associate on everyone else's contract.

Truth of the matter is, MS probably already know who Daddio is by name, etc. I am sure he is on the phone with them almost daily booking things. Same thing with other big commercial renters....in order to stay profitable they would HAVE to contact MS so much they would be known.

This just helps DVC have a basis to go after them. When it comes to all the legal mumbo jumbo, they just can't be arbitrary in their actions. They must develop a standard. I would not be surprised if there wasn't future revisions that would prohibit hiring an outside person to manage your DVC, etc. Also, just the wording of "commercial" renting could imply that if you link your DVC with a business for the purpose of renting, such as Daddio, you would be in violation, even once. But that is for someone else at DVC to decide and want to pursue.

 

[TisBit]

Jim - have you seen what the Lexus fraud searches can do? It can figure out that my sister (with a different last name) and I are sisters (therefore she would be a valid user of my points), that I'm married to my husband and he went to college with my friend Andrea and that she is married to Ted (all four of us have different last names). That I work at the same location as Dan, and used to work with Al. Its AMAZING - and big companies are using it to check transactions for suspected fraud. If I order something from a big ecommerce site using my husband's credit card and ship it to my sister, it will get held for a fraud check, Lexus will show we are married and that the shipment is going to a relation, and they'll pass it through based on the rules they have.

I have seen (and been able to use) this software. It is some scary stuff. I found businesses that my mother owned that I never knew about (boy was she surprised) and it linked my wife and brother together, even though they had only met once!

It also gives you more info such as where you have lived and the people that have lived there before and after you. Vehicles you have owned and who owns them now, etc.

But it is somewhat expensive and as previous mentioned can really open a can of worms. I don't think they would waste their time on a true investigation, unless the pay off was going to be huge (ie the family that has 14000 points, etc)

 

[crisi]

I have seen (and been able to use) this software. It is some scary stuff. I found businesses that my mother owned that I never knew about (boy was she surprised) and it linked my wife and brother together, even though they had only met once!

It also gives you more info such as where you have lived and the people that have lived there before and after you. Vehicles you have owned and who owns them now, etc.

But it is somewhat expensive and as previous mentioned can really open a can of worms. I don't think they would waste their time on a true investigation, unless the pay off was going to be huge (ie the family that has 14000 points, etc)

Its expensive, but as a corporate enterprise license it isn't that much (not in the scheme of corporate enterprise licensing). Disney may already have a subscription to make sure they don't get a lot of credit card or litigation fraud (which is what I've seen it demo'd for - I haven't used it myself) - bounce the suspected cases over to a corporate fraud department.

But it would identify all of LIFERBABE'S guests as personally connected to her (or most of them) and save them and her the embarrassing 'prove you know these people' phone call.

(It does open a can of worms, and its really scary to discover what data mining of public information can pull together about your life).

 

[cpbjgc]

To me, it's a question of which decision is made first.

I suspect "Daddio" has customers who are long-time members and who have rented points themselves in the past. Perhaps they had bad experiences in the past. We've all heard the stories about non-members who ask about availability for a dozen different dates and then never follow-thru on the transaction. Others play one member against another to try and get the best deal. Some try to play games with the payment terms.

Whatever the case, these members may simply conclude that it's worth the expense to farm-out the legwork to someone else.

If we're talking about a member who is clearly non-commercial (well under 20 rentals per year, etc.) and is simply using Daddio for convenience sake, there is no harm done to either DVC or fellow members. The points are going to be rented regardless of who does the work.

DVC could certainly take exception, but I would file that under the heading of "spite."

The other scenario would be members who make the decision to rent specifically because Daddio's service exists. DVC could take issue with this, but it's hard to quantify how many members or points fall into either category.

What we DO know is that DVC went out of its way to re-define commercial renting on 12/31, and I don't see anything in there specifically aimed at shutting-down Dave's activities. Theoretically they COULD look at the collective contracts on which he is listed as an Associate and issue sanctions accordingly, but given the documented limitations of their computer systems I doubt this is even possible.

What we have all been discussing is a policy DVC is using to help it identify commercial renting. It is not an exhaustive definition, and, while it's true it doesn't target Daddio's site, it doesn't say such activity is not commercial renting either. While he may be facilitating other members rental activities, he is clearly engaging in commercial renting:

• It's a business
• He is a member on all the the contracts (as an associate) he deals with
• He is only a associate for the purpose of renting points
• He is collecting a fee

Just because DVD hasn't tried to shut him down (that anyone is aware of), doesn't mean it is not commercial renting. It just means DVD has other fish to fry.

 

[JimMIA]

Jim - have you seen what the Lexus fraud searches can do? It can figure out that my sister (with a different last name) and I are sisters (therefore she would be a valid user of my points), that I'm married to my husband and he went to college with my friend Andrea and that she is married to Ted (all four of us have different last names). That I work at the same location as Dan, and used to work with Al. Its AMAZING - and big companies are using it to check transactions for suspected fraud. If I order something from a big ecommerce site using my husband's credit card and ship it to my sister, it will get held for a fraud check, Lexus will show we are married and that the shipment is going to a relation, and they'll pass it through based on the rules they have.

Yes, I'm very familiar with Lexis-Nexis. I haven't used it because of the cost, which primarily comes from legal applications I wouldn't have any use for. It's the primary research database for the legal profession.

But those kinds of systems are precisely what I was talking about above when I mentioned searching public records. I've used Choicepoint extensively, and it's great. There are one or two others that are very good.

Investigators take these tools for granted, but people who don't know these services are out there are blown away by the power of the systems.

Lest anyone freak out that so much information is available, you should know that all of these services are VERY selective about who they will let subscribe, and they are VERY aggressive in preventing abuse of the information. You have to be law enforcement, a licensed investigator, an attorney, a corporate auditor, etc. in order to access these systems, and they are heavily regulated by the government.

 

[Quiksilvr]

Lest anyone freak out that so much information is available, you should know that all of these services are VERY selective about who they will let subscribe, and they are VERY aggressive in preventing abuse of the information. You have to be law enforcement, a licensed investigator, an attorney, a corporate auditor, etc. in order to access these systems, and they are heavily regulated by the government.

Or a law student.

Actually, when I had student access to Lexis and Westlaw some of the search functions weren't included in our terms of service. I don't remember ever using it to look up personal data.

I'll add to what Jim said though... these search services are extremely expensive. Most of them run on a per transaction cost (some of the Lexis databases cost several hundred dollars PER SEARCH) while some go on an hourly rate. Corporate memberships are actually still quite expensive. Even if your firm is on an "all you can eat" type Lexis/Westlaw plan, firms still obsess over use because the cost is still passed on to the client. Even with firm volume discounts those kinds of searches are extremely expensive.

I doubt Disney would run them for the purposes discussed here...the cost/benefit comparison (in most cases) would probably not be worth it. They'd have to pay someone to run the search (and for the search), to do analysis, to check facts, and to make sure they're doing the right thing and not violating any privacy laws. They'd also have to develop procedure for all of that so they don't get sued. I'm pretty sure the enforcement of this will be a little more informal (although they'll probably have some sort of procedure...it would be stupid not to).

 

[CarolMN]

....(snip).....Lest anyone freak out that so much information is available, you should know that all of these services are VERY selective about who they will let subscribe, and they are VERY aggressive in preventing abuse of the information. You have to be law enforcement, a licensed investigator, an attorney, a corporate auditor, etc. in order to access these systems, and they are heavily regulated by the government.

Thank yo for this last bit of info - I was beginning to wonder why there isn't a whole lot more identity theft out there, LOL.

 

[tjkraz]

What we have all been discussing is a policy DVC is using to help it identify commercial renting. It is not an exhaustive definition, and, while it's true it doesn't target Daddio's site, it doesn't say such activity is not commercial renting either. While he may be facilitating other members rental activities, he is clearly engaging in commercial renting:

• It's a business
• He is a member on all the the contracts (as an associate) he deals with
• He is only a associate for the purpose of renting points
• He is collecting a fee

Just because DVD hasn't tried to shut him down (that anyone is aware of), doesn't mean it is not commercial renting. It just means DVD has other fish to fry.

I do think you're starting to use the term "commercial" out of its intended context.

The current and amended terms of the POS prohibit ownership of points for commerical purposes. It does not serve as a blanket condemnation of any commercial venture that happens to coincide with the acceptable use of points.

Note this quote from Mike's original post:

The Declaration of Condominium and the Membership Agreement for the Resort expressly limits the use of Ownership Interests to personal use and prohibits use for “commercial purposes,” – a pattern of rental activity or other occupancy by an Owner that the Board of the Association, in its reasonable discretion, could conclude constitutes a commercial enterprise or activity.

In other words, buying a 1000 point contract and renting those points year-after-year with no personal use IS commercial ownership. However, if someone rents their points one year out of 10, it's clearly not commercial ownership. And the fact that the person chooses to use a third party to facilitate the rental transaction shouldn't serve to make it a commercial rental.

In a sense, "Daddio's" service isn't much different than the DIS. The DIS has advertisers and earns some revenue based upon the number of visits to the boards. Therefore, the Rent and Trade board here is a revenue generator. The DIS is making money off of DVC point rentals, albeit in a more indirect manner. But that doesn't violate the POS either. The DIS (or Pete Warner, if you prefer) does not own points for commercial renting purposes--it's simply the facilitator for others.

That said, I certainly leave the door open to the possibility that DVC could object to "Daddio" being listed as an associate on numerous contracts. If that were to happen, I suspect he'll probably tweak his business model a bit (get the owner involved at the very end to complete the booking) and continue on his merry way.

Given the manner in which the commercial ownership prohibition is currently written, I don't see "Daddio" doing anything wrong. He's doing the same thing as Tom Yeary from The Timeshare Store and John from Owner's Locker--trying to make some money by providing a service to DVC members. Disney has gone out of its way to bankrupt other small business in the past and I'm not going to rule out that it could happen here, too.

 

[TisBit]

But back to what was discussed earlier, for the most part, even a semi intelligent person can look at a rental history and with just a brief explanation be able to tell if a member is likely using it for commercial or non-commercial rental activity. The employment of investigators and background investigators is not necessary, unless they were going after someone for a huge fraud scheme, etc.

As has been mentioned, these systems are not designed for a supervisor to say, lets run a background, the systems are very protected and even a lot of the systems have varying levels of background available. It is neither practical or financially sound to employ these systems just to check to see if 10 reservations might be family members. DVC will always look at an account, ask a question or two and go with the theory of "if it looks like a duck, sounds like a duck.....must be a duck" theory and allow a reservation to go through or not. (those who make a lot of ressies, just have to hope that Disney managers know what ducks look like! )

This policy will not affect 97% (just a guess, plus don't flame my throwing out a random high percentage) of renters, who will go through life wondering "who would make that many reservations!"

 

[TisBit]

Lest anyone freak out that so much information is available, you should know that all of these services are VERY selective about who they will let subscribe, and they are VERY aggressive in preventing abuse of the information.

Jim, thanks for pointing this out....I guess I should have as well. We were looking at employing the software and were given some trial runs for ongoing investigations (plus we used my brother for a report to check accuracy, and I know that he has an extensive criminal history) and for the record the systems are not 100% accurate, but incredibly scary! They have some very good controls to prevent the abuse of the systems.

 

[Dean]

But what I think is trying to be addressed is member W who calls and uses his/her/their thousand points at 11 months at multiple resorts for desirable times, then these sold out weeks show up on ebay or renting sites, with member W having no intention of ever using all these reservations and is clearly a commercial renter. Then those sold out weeks will go to a renter, who isn't even in the alphabet, will cut out DVC owners who paid for the resort to be built, and will also lower income Disney's cash rate if those rooms didn't go to DVC people. I am sure there will be some glitches and indignant people who may be questioned, but at least Disney is addressing the problem, and hopefully the bugs in the plan won't impact too many, but if I get questioned, it won't bother me at all. I would hope all this will start to register trends and then even those with multiple accounts will evenually be caught.

That can and will still happen. This rule doesn't address that issue other than by sheer volume. 20 reservations for a 2 BR for 5 days is still 4000 or so points, even more for 3 BR, concierge, full week or 12 day stays. DVC isn't going to worry about actual availability in this model, they can't and couldn't really enforce it if they wanted simply due to the fact that any rule will have a desired and undesired effect, look at the transfer rule.

Those thinking DVC is going to spend time searching through their records for each and every questionable situation, building search software, doing internet records searches are being unrealistic. It takes time and personel to do this, something DVC isn't going to want to use on this situation more than necessary.

 

[crisi]

Or a law student.

Yeah, we had access to it for Tax, but not the personal fraud stuff. And I'd used it years ago as a quasi paralegal, but it was really just case law lookup.

 

[JimMIA]

The employment of investigators and background investigators is not necessary, unless they were going after someone for a huge fraud scheme, etc...

It is neither practical or financially sound to employ these systems just to check to see if 10 reservations might be family members.

I probably didn't make myself clear above -- I was not suggesting that either public records database searches or auditing software be used to determine whether a particular ressie should be booked or not. I mentioned those tools in the context of there being other methods to address those who structure their activities so they slip under the radar of this 20-ressie rule. Commercial renters can easily bypass this rule, but there are other ways to identify them -- that was my point.

Individual owners who happen to do 20 ressies a year (we almost made it last year) would not be faced with anything like this. As you said, those assessments could be done much more easily than going through all this.

(those who make a lot of ressies, just have to hope that Disney managers know what ducks look like! )

Many of them can spot birds. I'm not sure about identifying ducks. I guess if it's in or near the water, it's a duck!

 

[cpbjgc]

I do think you're starting to use the term "commercial" out of its intended context.

The current and amended terms of the POS prohibit ownership of points for commerical purposes. It does not serve as a blanket condemnation of any commercial venture that happens to coincide with the acceptable use of points.

Note this quote from Mike's original post:

The Declaration of Condominium and the Membership Agreement for the Resort expressly limits the use of Ownership Interests to personal use and prohibits use for “commercial purposes,” – a pattern of rental activity or other occupancy by an Owner that the Board of the Association, in its reasonable discretion, could conclude constitutes a commercial enterprise or activity.

In other words, buying a 1000 point contract and renting those points year-after-year with no personal use IS commercial ownership. However, if someone rents their points one year out of 10, it's clearly not commercial ownership. And the fact that the person chooses to use a third party to facilitate the rental transaction shouldn't serve to make it a commercial rental.

In a sense, "Daddio's" service isn't much different than the DIS. The DIS has advertisers and earns some revenue based upon the number of visits to the boards. Therefore, the Rent and Trade board here is a revenue generator. The DIS is making money off of DVC point rentals, albeit in a more indirect manner. But that doesn't violate the POS either. The DIS (or Pete Warner, if you prefer) does not own points for commercial renting purposes--it's simply the facilitator for others.

That said, I certainly leave the door open to the possibility that DVC could object to "Daddio" being listed as an associate on numerous contracts. If that were to happen, I suspect he'll probably tweak his business model a bit (get the owner involved at the very end to complete the booking) and continue on his merry way.

Given the manner in which the commercial ownership prohibition is currently written, I don't see "Daddio" doing anything wrong. He's doing the same thing as Tom Yeary from The Timeshare Store and John from Owner's Locker--trying to make some money by providing a service to DVC members. Disney has gone out of its way to bankrupt other small business in the past and I'm not going to rule out that it could happen here, too.

I agree he is offering a service to DVC members. And I can see it as being a useful service as well, but that doesn't change my view on it being using a contract for a commercial purpose.

Daddio, as an associate on a contract, is an "owner". He is a member with all the rights and obligations that go with it relative to the contract. Only members can do the activity he is doing through his website for a fee (check and make reservations, receive the confirmation, cancel reservations, etc.). He benefits (as does the member he is acting for) from non-perosnal use of the contract. I think its clear he is using the contracts for commercial purposes, but we can agree to disagree.

I also disagree that he is like the DIS Board Rent/Trade area or the Time Share Store.

The Rent/Trade forum is a means to communicate between a member and renter. That's like saying my ISP is a facilitator because I use it to send e-mail to a potential renter. The DIS doesn't make reservations, manage payments, or keep a percentage of the rental price arranged between the member and the renter - Daddio does.

He is also not like The Timeshare Store, because they are not engaged in arranging rental. I think this raises another interesting point, as time shares seem to generally be regulated as real estate in Florida. In Canada, and I believe most U.S. states, property management (arranging rentals, collecting rent payments) actually requires a real estate licence unless you are exempt from the requirement. One of the common exemptions is for a property owner dealing with their own property. Perhaps that is another reason Daddio needs to be listed as an associate for his business model to work?

 

[JimMIA]

With regard to Daddio's service, I think there is another criteria for commercial renter that we sometimes forget. DVC also says if a person maintains a website for the purpose of renting DVC reservations, they are clearly a commercial renter. Without making any judgement on whether his particular activity is good, bad, or indifferent, there's no question that he maintains a website exclusively for that purpose.

Licensure is a good point, although I'm not sure it's required. There are numerous real estate brokers in Florida who specialize in rental property, and they are obviously licensed and regulated. But I don't know whether that is required. I think comparing Daddio's activities to a travel agent would be equally valid, and you don't have to be licensed in Florida to book vacations in Florida.

 

[Brian Noble]

Daddio is certainly a useful service for renter and owner alike. As Daddio's service grows, it also begins competing directly with the Mouse for cash DVC reservations. And, the Mouse is not known for its benevolent acceptance of competition...

My guess is that David will continue to get while the getting is good. If and when the getting is no longer so good, he'll adjust his business model accordingly---and the way I see it playing out, he'll probably lose some business in the process, because his competitive advantage is (1) the willingness to make direct three-way calls, and (2) having a broad set of points for 11-month bookings anywhere. If he's no longer able to book as an Associate member on all of his owner-client accounts, he loses Advantage #1.

And, it's important to recognize that that advantage is to both the renter and the owner. As an owner-client, the owner need do literally nothing. No mailing back and forth. No answering questions from folks who have no idea what they are doing. No dealing with folks who "change their minds" on a non-refundable reservation. No sitting on hold with MS. David deals with all of those hassles.