Hacienda Encantada — a how-to
Stopping Ryan
What to do when you cancelled within the 5 working days and the resort still refuses to refund you. Built from a real case — we've changed the buyer's name to William — dealing with Ryan, the sales manager at Hacienda Encantada.
Initial email to MESCAM
Hacienda Encantada, Cabo San Lucas
We purchased at Hacienda Encantada and after discovering issues with our contract as well as numerous undisclosed fees we rescinded within our allowed 5 day period.
Here is the issue. After signing, Ryan, the sales manager, insisted that we spend the following three nights at their resort as a thank you for the purchase. We had nice accommodations already and didn't particularly want to move, but went ahead and stayed.
When we went in to rescind after discovering the issues, we were told that by staying there we waived our right to rescind and had done a "move in." 15 days have passed and we have not been refunded our $18,765, AND they've sent our contract to Concorde servicing to begin collecting the remaining amount. We filed disputes with our credit cards the day we rescinded; Ryan says the credit cards will not credit us. Any advice???
William
MESCAM response — the diagnostic
Sat, Apr 9, 2016
Mexican law does not say anything about you giving up your right to cancel within 5 days because you spent the night at the resort. That's just a tactic to scam you out of your rights.
The key questions: Do you have physical proof you cancelled? Did you send a cancellation letter by email (or hand-deliver one and get it signed)? Did it clearly state you were cancelling in accordance with Mexican law and that any charges would be fraudulent? Did you tell them you'd sue your credit card company if they processed those charges?
If you did those things, tell Ryan you're going to sue your credit card company for processing fraudulent charges — and that after a default judgment, the card company will reverse the deposit charges from his company's merchant account and demand Hacienda Encantada pay all your awarded court costs. Once you get that judgment, neither the resort nor Concorde can come after you, because a judge will have declared the contract void.
If you have proof, start referring to every charge as a fraudulent charge from now on. Send your cancellation proof to Concorde and tell them this is going to court and you'll sue if they harass you. Read Kurt's Story — it addresses a lot of your concerns. Good luck. MESCAM
William replies
He has proof — and he's panicking
Thank you. At the time we rescinded I hadn't seen your website, but I followed a sample I found online. I believe I included everything except the part about suing the credit card company — I didn't know about that. We do have proof: I emailed it (Ryan responded) and also delivered it to the resort personally. The employee wouldn't sign, but I got his full name, noted it on my copy, and kept my parking ticket showing I was there.
I'm really freaking out over this. I notice there are no phone numbers — is it possible to ever speak to you? We have one card (B of A) with $7,000 and a Citicard with over $11,000. We can do small claims on the $7,000 — what about the $11,000? Will that be more of a problem?
MESCAM response — handling the $11,000
Sun, Apr 10, 2016
Have one of you file in small claims for the $7,000 first, then the other can file for the $10,000 portion of the $11,000 debt. If you win the $7,000 case, no court could then decide against you on the $11,000. Even though $11,000 exceeds the small-claims limit, if the court agrees the contract was cancelled and the debt is null, Citicard can't collect any of it — sue for the dollar amount and for rescission of the contract.
What you need to do with Ryan is notify him he has 15 days to refund your money or you'll sue BofA and Citicard for processing fraudulent charges. Tell him you can file anytime, and that when the card companies don't show, you get a default judgment for your award plus court costs — costs the card companies may well pass on to him. Make him understand the smart business decision is to simply refund you, since you legally cancelled. If Ryan wants to be pig-headed, by all means accommodate him and sue. Good luck. MESCAM
William asks where to serve the papers
We live in a fairly small town that has a Bank of America — do you think they'd show up in court? Even if they did, we should win; we did everything right. How will we know where to have the papers served — back East where the credit card department is, or to the B of A here locally?
MESCAM's step-by-step process
When William asked where to serve the papers, MESCAM laid out the whole sequence:
- 1 Go after Ryan first. Tell him you read Kurt's Story on MESCAM.com and that, since you cancelled in accordance with Mexican law, you're going to sue your credit card companies for processing fraudulent charges — plus substantial court costs. Your first goal is to make him realize he's in a losing position. Ideally, he gives in.
- 2 Immediately write your card companies (BofA and Citicard) stating the contract was cancelled in full compliance with Mexican law — the governing law — so no charges should have been submitted. All such charges are fraudulent. You'll pay the first $50 per US law and your cardholder agreement, but if they don't remove the rest, on a stated date you'll sue them. Copy Ryan. Give them 10 days, not the 45+45 the bank wants — take control.
- 3 After 15 days with no reversal, send a second letter: in 10 days you will file suit asking for damages, an order to comply with US law and the cardholder agreement, and court costs. Copy Ryan again. (Small claims will ask whether you tried to settle first — this is that effort.)
- 4 If nothing happens, file. Start with BofA ($7,000 — well within small-claims limits). Sue for rescission of the charge plus monetary damages and any interest. You're not suing your local branch — you're suing the corporation's credit card division, so research the exact entity name and its agent of service (a Secretary of State business-entity search works), then have anyone over 18 drop the filed papers at that agent's office.
- 5 At the hearing, it likely won't be your local branch but a credit-card-division manager — meaning airfare and lodging for them. They weigh reward vs. cost. The most they can recover is the charge itself; they can't get court costs (they paid none) or reimbursement for showing up. On an $11,000 Citicard charge the most they'd net is ~$550 — not even airfare. If they don't show, you get a default judgment for rescission, damages, and costs — which gives BofA every right to charge it back to the resort.
The Walmart test
William — the card companies say it's "just a billing dispute"
Before your last message we called both card companies to confirm they received our dispute documentation and let them know we consider the charges fraudulent. Both said that since we initially transacted with the resort, it can't be considered fraud — just a billing dispute. Is it possible that if we sue, the judge throws it out because we didn't wait out the dispute timeline?
MESCAM — what fraud actually is
On scumbag credit card companies
Screw BofA, CitiBank, and the horse they rode in on. They want these charges to stick because you probably can't immediately pay off $18,000, and then they collect their ungodly 24–35% interest. Do not expect them to tell you the truth.
A billing dispute can only be a billing dispute if there is a legal bill or contract. Yours was legally cancelled in full compliance with the governing laws of Mexico, so any charges the resort continues to push against a non-existent contract are an illegal act and are fraudulent. The Truth in Lending Act limits your personal liability for unauthorized charges to $50.
It doesn't matter what BofA and Citibank say — it matters what a US judge says when he sees you clearly cancelled and that Hacienda Encantada, knowing full well it was cancelled, kept processing charges anyway.
As for not waiting out their dispute process: unless your cardholder agreement specifically says you agree to forgo legal action until those periods expire, you can sue anytime. Once you file, the hearing won't happen for at least 30 days — plenty of time for their process to finish. If they find in your favor, you simply cancel the suit or they show up and say it's resolved. That's the worst case.
MESCAM
William — what about PROFECO?
They say I have 10 days to file a complaint
We're proceeding with the small claims lawsuits, and we can do the Citicard one for $10,000 — this is in Oregon. My question: I contacted PROFECO early on. They say we have 10 days to file a legal complaint. Do we want to do this? I read that resorts stall PROFECO complaints to get you past the one-year mark.
MESCAM — PROFECO, and the subpoena trick
Final long answer
As far as PROFECO is concerned: it's Mexico. The only people more corrupt than the timeshare people are the government employees. PROFECO won't do much — at most they'll try to negotiate a settlement for half to three-quarters of your deposit, the resort keeps that, and you get nothing. I've never heard of anyone getting all their money back through PROFECO. Remember: YOU CANCELLED YOUR CONTRACT IN FULL COMPLIANCE WITH THE LAW. You did nothing wrong. Still, go ahead and file the complaint — it's another document showing a judge that the contract was legally cancelled.
Once you serve your card companies with the court papers, serve them at the same time with a subpoena requesting copies of all documents they received or generated relating to this dispute, plus any documents regarding past disputes about Hacienda Encantada. If they show up without having produced those documents beforehand, you can demand anything they try to bring be ruled inadmissible — or that the trial be rescheduled and they be fined. Failure to respond to a subpoena carries its own penalties, separate from the hearing.
Now — before you ask — I'm not going to write your letters or review them. I've spent over five hours answering questions, and it's time to cut this off. I've given you plenty to get started; do whatever research you need to finish. This may sound cruel, but I'm not getting paid for this and I have a life. I've kept MESCAM running for over 13 years on my own dime, and very few people have shown any appreciation or donated. If you're truly overwhelmed, there are companies that took what I do for free and turned it into a business — they'll charge a $600–$800 fee plus 10–20% of what you recover. Stick to the ones that work on contingency. Good luck. MESCAM
P.S. Because these are questions I've answered before, this time I documented all of it so I don't have to repeat myself. On the website you'll find a new article, "How to stop Ryan" — your questions and my answers, with your name changed to William. The thought of being made public might be enough to convince Ryan to make the smart business decision. Either way, Hacienda Encantada is not going to fly him to a US court to be questioned about their sales practices.
Why it's fraud — the five elements
Fraud must be proven through five elements. MESCAM walked through each one for William's case — make these exact points in your letters and in court:
- 1. A false statement of material fact. Hacienda Encantada knows the contract was legally cancelled and that the charges are no longer authorized — yet tells your card company the charges are valid.
- 2. Knowledge that the statement is untrue. You have emails proving Ryan received your cancellation; he knows any claim that the charges are authorized is false.
- 3. Intent to deceive. Ryan acknowledged the cancellation and still says it's invalid. Article 1 makes your consumer rights non-waivable — there is no action by which you "gave up" the 5-day right.
- 4. Justifiable reliance. You relied on Mexican law (and NOM-029-SCFI-2010, which requires the cancellation clause and the 15-day refund) when you cancelled within the window.
- 5. Injury. Demanding you pay for unauthorized charges on a cancelled contract is plainly causing you damages.
The bottom line