Over the past few weeks, we’ve been discussing the financial impact of timeshare ownership. Thousands of buyers struggle to completely understand the purchase and the amount of value it brings them. To consumers, the fluctuation of costs is frustrating because they expect a specific experience that was sold at a distinct price. While it is the buyer’s responsibility to know what the loan and contract terms entail before signing, you can’t fault them for being deceived.
Nonetheless, the unexpected typically forces many to go over budget or into hardship. But a higher monthly obligation (due to interest, tax or travel expenses) isn’t the only thing that’s concerning. Annual timeshare fees for maintenance and special assessments can really add to the constrained burden of fractional ownership. Receiving unforeseen charges that weren’t even included in the contract can be maddening. Especially when these invoices arrive in owner’s mailboxes during the holiday season.
Fees for Special Assessments Aren’t Always in Writing.
For most timeshare owners, annual fees are most certainly included in their contracts. The salesmen at the presentation just do a great job of avoiding the pertinent details of the perpetual agreement while overhyping the possibilities of the travel purchase. But not all timeshares include this type of language in their agreements. The problem is, they’re still charging for annual timeshare fees based on “industry standards” and conformity by a majority of owners.
At first glance, the emergence of improved travel seemingly threatens the outlook of timesharing. Today, the general population is well aware of their timeshare sales tactics more than ever before. But resorts continue to find ways to manipulate potential buyers and hold them liable for certain obligations by threatening penalties. Knowing that potential buyers can confirm that annual timeshare fees are not included in the contract and still be charged for them is concerning to say the least.
Vague Reasoning for Annual Timeshare Fees.
Back in 2015, Eric Jordan of the Conde Nast Traveler published a story that detailed how timeshare companies justify their demands on owners. After growing tired of non-contractual, annual timeshare fees for special assessments, Tim (previous owner) and his wife reached out to the website for advice. So Eric reviewed their situation and attempted to reach out to Marriott for answers. He quickly realized the only thing that was justifiable was the buyer’s sense of hopelessness.
What astounded him the most was the amount of effort required just to garner clarity. When he finally spoke to the director of operations at Seaport Development, N.V., the justification set him back even more. Mr. Trivedi stated, “Over 99 percent of our timeshare members have paid their share of the special assessment.” We’re not exactly sure what this has to do with the simple fact the annual timeshare fees weren’t included in Tim’s contract. Neither did Eric.
Either way, Trivedi went on to say that they have the right to limit the usage of those who don’t adhere to payment requirements and that all buyers are held to the same standard. When Eric pressed the same concerns, Trivedi simply reiterated his stance. “Special assessments for extraordinary renovations are a standard industry practice and upwards of 99 percent of our members have paid in full.” So, if owners decide to jump off a bridge, everyone else should be required to do the same? The argument seems a little dry if you ask us.
The resort’s leader even suggested that Tim and his wife were being disingenuous because they’ve paid for annual timeshare fees for special assessments in the past. Eric went on to combat the resort’s ambiguous responses by insisting the contract needed to include these details in order to be upheld. In the long run, Tim and his wife’s refusal to pay for the assessments cost them their ownership rights.
How to Avoid Unexpected Timeshare Expenses.
While it’s nearly impossible to avoid this type of misconduct, there are ways to avoid the unexpected when signing up for a timeshare. But this requires extensive knowledge of the purchase itself. If you’re attending a timeshare presentation for the first time, it’s imperative that you know what you could be getting yourself into. Studying the details of timeshare contracts helps you know what to look for and understand what needs to be in writing.
If Tim and his wife would have noticed that annual timeshare fees for special assessment costs weren’t included in the agreement, they could have taken the proper steps to ensure they weren’t charged. It’s not out of the ordinary to require certain details in writing before signing anything. If all else fails, at least you can walk away confidently. The last thing you should want is a perpetual burden that can set you back financially.
For the most part, fractional ownership is one of those major purchase decisions that can be a shot in the dark. Whether potential buyers know nothing about timeshare travel or they are fully aware of the industry’s pitfalls, both are essentially rolling the dice when they don’t thoroughly analyze what they’re signing up for. No matter how or why an owner arrives at the point of regret, the timeshare financial burden is usually the driving force. When maintenance fees, taxes, assessments and interest catches buyers off guard, they quickly realize the expense wasn’t exactly something they could afford.
While it’s easy to blame the consumer for biting off more than they can chew, it’s important to understand how timeshare companies go about positioning their product. Resorts intentionally target those that can’t quite travel to desired locations because of limited incomes. Free gifts, vouchers and travel packages tend to appeal to this audience more. When they’re offered a seemingly low price for an annual trip they never dreamed they could afford, many are willing to rearrange their spending to make it work.
Higher income families aren’t as advantageous for resorts because they’re less likely to conform if timeshare financial concerns arise. People that make more money typically do so by making good decisions. Those living comfortably aren’t going to allow themselves to be at the mercy of the resort if the purchase doesn’t work out. Instead of funneling more into the purchase, they’re more likely to spend their capital on timeshare cancellation services or other methods of relief.
Pitching supposed travel deals to people that have no business making this type of purchase is downright criminal. But it’s the reality of the business. Every year, tens of thousands of consumers anticipate an experience that never transpires. Once they discern that listening to an incentivized salesman was a huge mistake, it’s normally too late. At this point, they’re forced to completely alter their spending just to avoid more fees or worse – like the possibility of foreclosure and judgements for the deficiency.
The Result of Timeshare Financial Hardships.
When people in general are struggling financially, relationships are often affected the most. While it’s easy to assess the physical aspects of a financial crisis, it’s important to remember the mental or emotional trauma that ensues. The guilt from poor financial decisions can creep into confidence levels and lead to assumptions.
When multiple people have to endure the hardship, tension amongst family and friends can easily make matters worse. Stress levels can become magnified and bitterness can settle in if people aren’t dealing with loss appropriately.
Making Sacrifices to Make Timesharing Worthwhile.
When dealing with timeshare financial hardship, buyers ordinarily have to make sacrifices just to cover the unexpected costs of fractional ownership. Sadly, the perpetuity of the agreement regularly reminds them of their mistake. We’ve spoken to hundreds of people desperately looking for help after the timeshare has completely altered their lifestyle. Although the purchase was once seen as an opportunity to get away every year, many realize they can’t even go out anymore.
Restaurants, local events and other forms of entertainment tend to be the first things eliminated due to tight budget restraints. Holidays, birthdays and other special events also become limited when the timeshare financial burden gets out of hand. Some of our clients have sold personal items of value and even taken on second jobs just to revitalize their quality of life. Nobody would sign up for a timeshare if they knew hidden costs and sacrifices were a part of the deal.
Coping With the Financial Burden of a Timeshare.
Although being backed in a corner may actually help some people gain confidence in improving their income levels, it’s rather devastating more often than not. Going from a state of euphoria to painful remorse can be tough to deal with. Especially when you don’t have the tools, social circle and capital to persevere. Even if you’re able to pay for all that the timeshare entails, you subconsciously know that another costly setback can be disastrous.
Financial Scenarios That Call for Timeshare Cancellations.
When dealing with a timeshare financial burden, many people simply aim to survive the entrapment of the purchase. But this leaves them extremely vulnerable when further financial blows occur. While most people avoid spending more money on something they’ve heavily invested in, there’s always a final straw that lands on the camel’s back. It’s kind of a rule of thumb in life. At some point, you just gotta eat your losses and try to move on.
Since we’ve been helping timeshare owners find relief for a while now, we know that this reasoning typically surrounds their inability to comply with the timeshare financial agreement. While they may have been able to keep their head above water for an extended period of time, they reach a point where survival mode just doesn’t make sense anymore. Here are three scenarios that normally point users to a third party cancellation.
1. An Unexpected Income Change.
If you’ve experienced financial hardship before, you know that losing a source of income is the worst possible thing that can happen. While other financial obligations may be willing to work with you to soften the blow, timeshares haven’t been known to show much empathy here. Forbearance, restructured payments or downgrading isn’t an option here. Prominent resorts are firm believers in holding buyers accountable for the price they agreed to.
This can be especially difficult for parents who have mouths to feed or the aging community that lacks the skills required in today’s workforce. One of our retired clients ended up having to go back to work after using up an inheritance and taking out a second mortgage on their house. Another told us she had no choice but to legally cancel when the resort refused to alleviate her timeshare financial burden after she lost her job. It was the only line of credit unwilling to do so.
2. A Poor Understanding of the Cost.
Like we mentioned in the past few articles, the actual cost of the purchase is a lot more than what’s initially presented. Interest rates on contracts tend to mislead buyers tremendously. When they’re unable to refinance the purchase to decrease lender’s fees, the annual cost becomes a lot higher than anticipated. Instead of focusing on how much of the principal balance they’re actually paying, they tend to spend more time trying to decrease their monthly payments.
When owners finally realize the resort isn’t going to provide them with favorable timeshare financial help, they confidently make the decision to legally walk away from the purchase. There’s just no need for them to continue paying for something that they can’t pay off, use or enjoy the way they want to.
3. Sales Tactics are Recognized.
Once fractional owners are able to identify the intent behind the timeshare sales system, they often feel somewhat liberated. Instead of constantly finding themselves frustrated with outcomes and costs, they start to understand how they’re being played. This usually occurs when the purchase is seen for what it is: a liability instead of an asset. Unfortunately, most buyers don’t realize this until they’re facing quite a few timeshare financial burdens.
Another one of our clients reached out to us for help after figuring out the timeshare wasn’t actually offering them solutions. Instead of listening to and addressing their concerns, the resort was up-selling them into further timeshare financial obligations. The major hospitality chain even went as far as ignoring the owner’s cancellation request and charging unknown credit cards without their consent. When the simple purchase accumulated over $100k in charges, they knew a professional exit strategy was their best bet.
Don’t Let Timeshare Financial Burdens Rule Your Life.
Although buying a timeshare property may seem like an opportunity you’ve always wanted to explore, just know that it’s a risky decision. Unless you take the time to fully assess the purchase, you should never get too excited about the possibilities. Far too many people are currently overwhelmed by a timeshare financial burden that could have been easily avoided.
If you feel trapped in fractional ownership, hopelessness doesn’t have to be the result. While we do specialize in getting rid of timeshare contracts, there’s always a chance you can work things out with the resort. Knowing how to approach the situation can make all the difference. To learn more about our attorney based process, you can schedule a free consultation or proceed with our client qualification process below.
Over the past few weeks, we’ve taken a deep dive into the reality of borrowing money for a timeshare purchase. If you’ve been following along, then you’ve become well aware of just how costly the expense can be. At the same time, the general population knows little about the financial pitfalls of timeshare travel. Even the smallest bit of information can save most from buyer’s remorse. While the unexpected fees, liabilities and lender rates of a mortgaged property can alone be devastating, the burden usually compiles when buyers decide to pursue the peril of timeshare refinancing.
After speaking with thousands of unhappy timeshare owners, we’ve been able to develop a solid understanding of the fractional owner’s perspective. At first glance, many see the purchase as an opportunity to go on vacation for a low monthly cost that fits within their budget. Even when they attend the sales presentation without a single intent to buy, the product intrigues them. After hours of pressure filled sales pitches and distracting incentives, many attendees truly believe they can’t let the opportunity pass them up.
When buyers are at the mercy of the timeshare, it presents a bundle of revenue opportunities for the resort and its partners – most of which are lenders. They could care less when owners continue to make costly mistakes as long as they remain under contract. This tempts buyers to engage in anything that gives them any type of hope for reducing the burden. Unfortunately, a majority of the solutions presented to owners aren’t favorable.
Should I Refinance My Timeshare to Cut Costs?
Most owners are eager to refinance their timeshare because they’ve been battling high interest since making the purchase. Like we’ve mentioned before, timeshare presentations do a great job of misleading potential buyers. Many would have never signed the agreement had the timeshare salesman not told them they could revise their borrowing rate shortly after signing. Once they realize banks don’t offer timeshare refinancing, they tend to exhaust their efforts to bring the interest rates down.
Whether they restructure their financial obligation with the resort or upgrade into a new contract with lower rates, rarely is either option advantageous. This causes owners to continue revisiting the idea of restructuring timeshare loans with third party lenders – even if it entails unsecured lending or secured lending on assets they own. Once owners make a string of poor decisions, all they can do is hope for some sort of financial relief. But what ends up happening is, buyers find themselves in a whole lot of debt without ideal resources to help them.
So if you’re thinking about timeshare refinancing to shave a little off of your monthly payments, we encourage you to rethink your strategy. Especially if you’re close to paying off the mortgage. While financial hardship might be staring you in the face, you have to remember that the timeshare prefers that you’re at their mercy. Acting out of desperation can be costly. Telling them that you’re considering bankruptcy or threatening to walk away only gives them ammunition. They’d rather talk you into temporary bandaids that enhance their profits over time.
Timeshare refinancing is the type of solution that fits right into their “MO.” When you think about it, it’s pretty discouraging to know the resort wouldn’t help you out with a lower interest rate because you couldn’t prove the salesman told you so – but they’re willing to do what it takes to keep you under contract once the purchase completely overwhelms your bank account. But you’ve come this far and there’s no need to keep giving your money away. Restructuring once you’ve paid a whole lot of interest is a bad move.
The Reality of Restructuring Timeshare Mortgages.
In case we weren’t clear before, refinancing a timeshare mortgage is not a solution to financial hardship. If you look up the definition of solution, it means to solve something. If you’re completely in over your head with a weekly interval or point membership, then restructuring payments will only further your problems by adding even more lender fees. In other words, you’re essentially solving nothing. While you may have some strong reasoning to support your stance, allow us to paint the picture for you.
Say you have a loan with 5 years left on the repayment schedule. If you’ve been paying $359 per month for 5 years already, then you’re probably pretty close to putting a dent in the principal balance (close to $6K of the original $20K loan). Since a typical 10-year term that’s paid within this time frame normally carries $23K in interest, about $15K should be taken care of. While this may be eye opening to most of you, it’s the hard reality of borrowing money with an enormous borrower’s rate. Any large purchase with similar financing (nearly 18% on average) would turn out the same way.
When timeshare owners allow the resort to sway them into restructuring a timeshare mortgage, they’re basically enabling the money scheme to continue. When they show they’re desperation, timeshare companies have been known to forcefully upgrade them into new contracts and extend the loan back out to 120 months (10 years). Although the “result” is a more “affordable” monthly payment, the buyer now has to cover additional principal. Most aren’t aware of this or they wouldn’t agree – similar to their initial decision to buy.
Timeshare refinancing resets the buyer’s obligation to pay lender fees, even if 65% of the interest on the original loan has been paid. On top of that, 80% of the new loan’s payments will go towards the reset interest, not the remaining principal balance. Imagine paying tens of thousands for nothing, only to start all over again and extend the burden. If you want to lower your monthly costs then you’re better off cutting back in other areas of your life. As you can see, restructuring your loan with the resort only gives them more of your hard-earned money (in the form of interest) with zero added value to your vacations.
Another Example of Poorly Restructured Timeshare Loan.
One of the best ways to explain this is to compare the decision to that of a refinanced car loan that has almost been paid off. Negative equity in the car is created when you pay additional interest on a depreciating vehicle that you can’t even afford anymore. While the overall cost may seem fitting, you have to consider maintaining the car, out-of-warranty repair costs, upgrades, speeding tickets, insurance rates and even gas. At the end of the day, the borrowed amount of the car loan itself isn’t exactly the problem.
The clear takeaway here is that the best option for the car owner is to give the car back and cease payments altogether; instead of trying to make it work. But it’s not that simple for timeshare owners. Even donating the purchase isn’t always fruitful. Timeshare cancellation services might not be ideal either if you’re worried about additional costs. At the same time, fractional owners know that dragging out unwanted payments just to avoid another purchase else to get rid of the timeshare for you?
Don’t Let Refinanced Timeshare Mortgages Handicap You.
The more consumers allow themselves to be trapped in longer mortgage terms and further contractual agreements, the harder it’s going to be for them to find peace and joy. We’ve helped hundreds of buyers who didn’t even know secondary timeshare loans or resort branded credit cards (backed by Comenity Bank and Barclays) were in their name. The deceitfulness behind the sale of a timeshare can lead you to believe you’re making smart decisions, but you’re really digging yourself into a deep hole. Timeshare refinancing only digs the hole deeper.
If you feel like you’re being forced to look into personalized lines of credit, unsecured loans or HELOC secured loans against your home to create a rewarding experience, something is wrong. Don’t let the mistake of the purchase cloud your judgement. Take advantage of your consumer rights while thoroughly analyzing every method of payment you involve yourself in. In most cases, there was something presented to you along the way that provides you with leverage to escape the clutches of your agreement.
You have your whole life ahead of you. There are plenty of better things you can buy with the money saved from eliminating fractional ownership. If the idea of timeshare refinancing is your only hope then we’d love a chance to explain all the options available to you. While it can be hard to trust any timeshare solution these days, we take pride in making sure you qualify for cancellation before we even discuss our services. If you’d like to learn more, simply schedule a free consultation or proceed with the qualification form below.
When people stumble into a timeshare presentation uninformed, the idea of the purchase can be riveting. But like many travel deals, there’s more that meets the eye. Once buyer’s realize it’s nothing like they imagined, they realize fractional ownership is actually a liability. Although the lackluster amenities and over-hyped possibilities are often disappointing, the cost itself is what inevitably knocks the wind out of consumers. So, in order to help consumers avoid grief, we decided to talk a little bit about timeshare financing and all it entails.
Borrowing money to buy something expensive that you know little about it extremely risky. At the same time, beating yourself up for swallowing the hook, line and sinker doesn’t do you any good. You’re not alone as thousands of people regret their decision. The problem is, unlike other expensive purchases, you can’t just submit a refund request or resell the property to recoup your losses. Aside from the mythical resale market, the timeshare system is set up to trap buyers in perpetuity. In order to escape, you’re going to have to jump through some hoops and put forth some serious effort.
So before we get deep into the topic of timeshare financing, ask yourself if continued payments is something that’s really worth your while. No matter what you do, understand that you’re not going to be able to negotiate a lower cost obligation with the resort. If you’ve already surpassed the rescission period, you’re pretty much locked in for a while.
Uninformed Signs Ups Can be Extremely Costly.
At some point in time, you’re going to have to realize that whatever you were promised during the timeshare presentation is questionable at best. To the timeshare, it never happened if you can’t prove it. You’ve signed an agreement and they’re going to do everything in their power to collect the payments you already acknowledged – whether you agree or not.
While you may not see the picture clearly yet, this blog series will most definitely open your eyes. Financing a timeshare purchase isn’t as straightforward as you think. Thousands of people have attempted to revise repayment options or use lines of credit to cover unexpected costs, only to find themselves in a financial pit of despair. One bad decision can be devastating.
So before you make a drastic decision to become an owner or relieve yourself of the burden, do everything you can to understand the purchase first. In case you’re unsure of where to start, here are some facts about timeshare financing that’ll make you think twice about your next move.
No Lender Will Mortgage Your Timeshare Property.
Most people attending timeshare presentations have no intent on making the purchase. They’re usually only interested in the free gifts (travel packages, tickets or other forms of entertainment) that lured them in. But timeshare companies know how to get their attention and usually drag out the pitch until the consumer finally agrees to try it out. The primary goal of the pitch is to sell the experience while avoiding disclosure.
Although numerous techniques are used to persuade attendees, the way salesmen counter concerns is what eventually closes the buyer. Crafty, premeditated answers normally eliminate the initial drawbacks people have once they’ve reviewed the agreement. One of the most common concerns are the high interest rates that expand the cost of the timeshare significantly – and rightfully so. Most people are relieved to hear a salesman tell them they can easily find another lender to mortgage the timeshare. It’s too bad this just simply isn’t true.
We’ve spoken to hundreds of owners that exhausted their quest for lower interest rates. Many of them tell us they never would have signed the contract if they would have known new timeshare financing wasn’t going to be available. Instead of temporarily enduring high interest rates, they were forced to cope with long term payments they couldn’t afford. If you know anything about mortgages, this can really add up over time.
What Does Timeshare Financing Really Cost Buyers?
On average, fractional ownership comes with a 17.9% interest rate and can be upwards of 20% when your credit score is mediocre. If you thought something like 5% was obtainable, then you’re talking about a big difference in payments. While the average cost of a weekly interval is roughly $20k, plenty of people spend more. If you happen to buy a $60k timeshare, then being locked in a high interest rate can be devastating over a 120 month term (average).
Keep in mind that the interest for timeshare financed loans is always front-loaded. Like most large purchases, when you’re making minimum payments, very little is applied to your principal balance. Since most buyers sign up for affordable repayment options (because they can’t really afford it), they end up paying more than double their original principal amount. Like we’ve mentioned before, $20k timeshares are actually $40k liabilities because of interest. This total doesn’t even include annual fees, taxes and other travel expenses required to vacation at the condo.
By the time buyers see the cold reality of the expense, there’s not much they can do to eliminate their obligation to pay the resort. Many aren’t sure how to approach the burden of timeshare financing when the resort is only interested in pointing to the contract they signed. Like we’ve described on many occasions, finding relief is a burden in itself. Since many owners are told timeshare cancellation isn’t even an option, they’re often at the mercy of the resort.
One of the ways timeshares continue handicapping buyers is by persuading them to use in-house “solutions” for relief. The problem is, owners are never actually relieved of the obligation. Even before they can transfer the purchase to another owner, the mortgage balance needs to be paid off. Even when you pay the contract in full, it doesn’t guarantee you’ll find a willing party. In fact, it’s highly uncommon that you will.
What’s even more troubling is that owners usually involve themselves in further timeshare financing just to satisfy their mortgage balance. It can be quite demoralizing to borrow even more with the hope of garnering a return, only to realize you’re unable to get out of the contract. Most buyers don’t know that a timeshare depreciates faster than any other purchase. If they knew it was worthless, then they probably would have never said “yes” – let alone pay more for nothing.
Undisclosed 3rd Party Timeshare Financing.
When it comes to financing a deeded timeshare or point memberships, the loan terms and repayment options aren’t the only borrowed elements worth noting. A majority of new owners don’t even know that additional lines of credit were opened under their name on the day of the signing. The reason they’re oblivious to this transaction is because the timeshare does not hold this finance note. It’s typically included in the paperwork as a conditional offer by a 3rd party.
For the most part, these undisclosed forms of timeshare financing are usually in the form of credit cards through Barclays or Comenity Bank. Without your actual consent, the timeshare company utilizes the unsecured line of credit for down payments as well as monthly and annual auto-debits. As you can probably guess, the borrowing rate for these compounding interest lines of credit aren’t low either. It’s highly unfavorable to pay off borrowed money with borrowed money.
When consumers aren’t conscious of the actual amounts their spending because fees are being paid without their knowledge, things can spiral out of control quickly. Many buyers don’t even know they’re going to be billed $1,200 for maintenance fees every year. So you can imagine their reaction when they receive an unknown credit card statement for costs they didn’t even know existed.
Sadly, far too many timeshare owners are forced to eat the costs in order to avoid penalty. Their contract essentially holds them hostage here. But because so many people could never really afford the $20k purchase to begin with, they can’t even pay the cards off. They have no choice but to continue using these 3rd party lines of credit to make payments. Especially when special assessment fees catch them off guard.
Before timeshare owners know it, they’re drowning in debt due to something they can’t even use the way they envisioned. It’s hard to look at timeshare financing as a whole and argue that the resort and it’s sales teams don’t know buyers are set up for failure. If you have cash on hand, they know you’re forced to use it. If you don’t, then you’re at the mercy of the resort. Either way, it’s a win for the timeshare industry and another reason why profits continue to climb.
Get Out of Timeshare Financing for Good with VOC.
If you haven’t noticed, timeshare travel isn’t exactly the affordable escape it’s said to be. While the baseline cost of the purchase can be appealing, the conditional expenses and add ons are what really set people back financially. Before even considering fractional ownership, you need to understand what you’re getting yourself into.
You can’t treat a timeshare like a used car that you bought and resold for a few hundred dollars less after you’ve driven it for a while. It’s not even like financing a new car and selling it for the depreciated value a few months later. While you may be able to own those mistakes and stomach their losses, a weekly interval can leave you with nothing to show but a lot of debt.
If you or someone you know is burdened by timeshare financing, there’s no need to continue digging a deeper hole. While the resort wants you to believe terminating your agreement isn’t feasible, we’re here to tell you it most certainly is. You just have to decide which is more worth it: canceling the contract or trying to keep up with payments at the expense of your quality of life. To learn more about our attorney based process, you can always schedule a free consultation or proceed with our qualification form below.
When it comes to most major purchases, borrowing money is a common way to get what you want. The ability to easily do so in today’s culture is the main reason why so many people are in debt. Things that used to be out of reach can be had for “affordable” monthly payments. Since many consumers base decisions like these on how much they make per month, financial setbacks and urgent needs can quickly make a large purchase regrettable. Timeshare loans are no different and it doesn’t take long for buyers to realize they’re in over their head.
Unlike other expensive items with similar price points (car, boat, home renovation, college tuition, etc..), buying a timeshare is usually an impulse decision. When you think about it, this is extremely odd. Most people know little about fractional ownership. In fact, it’s safe to say most of the general public knows more about vehicle features and state colleges than vacation intervals. Consumers spend hours researching vehicles online before even contacting the dealership. Why is it that we’ll spend multiple weekends test driving boats before buying but we’ll sign off on a $20,000 timeshare without much thought?
The answer lies in between the lines of consumer reasoning. With most of these purchases, people know what they want and what to look for. They won’t go to the dealership until they’re ready because the aggressive nature of a car salesman is expected. They want to be prepared so they can call out bluffs while countering intuitively and intelligently. Since the purchase and its value is clearly understood, the desire to enjoy it is already there.
How Consumers Get Stuck in Timeshare Loans.
If you analyze the sale of a timeshare, you’ll realize most people attending presentations are there for the perks. For the most part, they agree to show up because they’ve been incentivized to listen to something they could care less about. They feel the exchange-of-time is worth it because they have no intention or desire to buy. Rarely do they expect to be intrigued. But low and behold, many consumers are dazzled by once-in-a-lifetime opportunities to travel and take out unfavorable timeshare loans to make it happen.
What fails to meet the eye is the simple fact that timeshare presentations, are run by commissioned representatives that make car salesmen look like boy scouts. Since most people don’t anticipate the hard sale, they tend to believe it. Even though pertinent details tend to be left out during the pitch, the strategic excitement and vague possibilities of a new frontier leads consumers to believe they’ve struck gold. But if you’ve bought a timeshare before, you know this is usually short-lived.
Once the reality of the purchase sets in, many come to realize they can’t even book the condo. They figure out the total cost is quite more than they expected and a resale market doesn’t even exist. After seeing the amount of interest that timeshare loans carry, they begin to view the purchase as a burden. All of the jubilee quickly turns bitter and buyers despise what once was seen as a unique opportunity to escape reality in style.
The Psychological Element of the Timeshare Sale.
The timeshare purchase itself is a lot more complex than consumers being in less-than-ideal sales environments with the wrong people. Timeshare companies know how to put people in unknown situations that isolate them, making it easier to persuade. Anyone in the psychology field knows the best way to sell someone on something is to somehow nurture them into believing the decision is theirs. This is exactly what the resort does to close people on timeshare loans.
A dosage of “what ifs” blended with an element of pressure creates a sense of urgency for potential buyers. The perks and capabilities that have yet to be experienced paint a picture of an improved quality of life alongside endless possibilities to create new memories. The idea that the purchase is “affordable” forces them to seriously consider the offer and make a quick decision before it goes away.
Many of our clients talk about the appeal of buying. How they felt like they never went anywhere with their spouse or family. That they barely even went out for dinner, not to mention vacationing anywhere worthwhile. When the purchase was presented in a limited fashion, it encouraged them to take advantage of an ability to spend more time with loved ones and family. Many feel as though the purchase fills a void in their life that they hadn’t previously recognized on their own.
This is why timeshare companies target certain types of households for ownership. They want to pitch people who don’t exactly have the budget to travel lavishly. They want to be able to tell them that they can by persuading them that their dreams are actually within reach. Salesmen are trained to come off as empathetic friends, simply handing out travels deals to help people experience life to the fullest. If consumers knew the real intent behind the sale, they’d never agree. In short, closers reap high commissions.
Unfortunately, deception is a specialty of the greedy. The documentary, Queen of Versailles, shows how timeshare travel is really portrayed by those behind the scenes. Subconsciously, everyone wants to go on vacation, but not everyone can afford it. These corporations know that preying on people that want to travel, but can’t, is a lot easier than pitching those that don’t need a travel bargain. When an opportunity seems too good to be true, lower income households are a lot more prone to say “yes.” Especially when they can borrow money with seemingly “affordable” timeshare loans to experience what higher income families do.
How Misleading Are Timeshare Loans, Exactly?
When consumers make a large purchase, most of them aim to pay it off as quickly as possible. Although debt isn’t being taken as seriously as it should be in the 21st century, most people understand how interest works. But because of the lack of disclosure during the presentation, many timeshare buyers don’t anticipate the purchase costing double or even triple what was presented to them.
In reality, agreeing to buy a $20K timeshare usually ends up costing around $45K over the term of the mortgage. Some of our clients tell us they knew the interest rates were high but they were told they could quickly refinance to lower costs. When they discover this was a lie, they find themselves stuck in a perpetual contract with zero wiggle room. Most refinancing options have certain qualifications that aren’t immediately attainable. Even if buyers restructure down the road, the principal balance remains the same because they’ve been paying off interest the whole time.
Annual fees that come in the form of maintenance and assessment costs also plague buyer’s pocketbooks. Every year, these continue to rise, placing quite the financial burden on buyers. Maintenance fees alone cost $1,200 per year on average. Even when owners pay off timeshare loans or mortgage balances, they’re still obligated to pay these dues every year. You could spend $45K on a 10 year term, and still face a $12K minimum obligation over the next 10 years.
As you can tell, this amount is a lot more than what the initial sales pitch covered. But it’s not the only financial disadvantage that hinders buyer enjoyment. When the purchase doesn’t live up to expectations, many consumers spend more to make it worthwhile. Upgrades normally come in the form of additional contracts with separate timeshare loans and annual dues. What started off as a $20k borrow over 10 years for $167/month actually ends up being $354/month at 17.9% interest, resulting in a devastating financial blow that can surpass $100k over time.
The Importance of Understanding Timeshare Financing.
Over the next few weeks, we’re going to spend a lot of time focusing on the actualities of borrowing money for vacation ownership. Since many of our clients have experienced quite a bit of hardship, we’ve been able to conceptualize their stories and create valuable content that helps you understand the true expense of fractional ownership.
Aside from breaking down travel financing in general, we hope to help you grasp the simple fact that a timeshare property is not an asset but a liability. Even when it comes to refinancing, lowering your interest rates isn’t as easy as it’s said to be. Knowing how timeshare lenders work and what to expect out of a mortgage (or a personal line of credit) will help you navigate the industry with confidence.
At VOC, we know how discouraging the financial burden of a timeshare can be. Timeshare loans are not in the least bit consumer friendly. In addition to all of the other inconveniences buyers experience, the cost is what commonly compels people to get out of timeshare contracts. But you don’t have to feel trapped in your agreement. We hope this article provides you with perspective and helps you make the best decision for you and your family. Sometimes asking the right questions helps you avoid deceit altogether.
If you have any questions about canceling fractional ownership, you can always visit other blogs for more information. If you’re unable to find what you’re looking for, one of our consultants will be more than happy to see how VOC can help. If you’re set on getting rid of the purchase, feel free to proceed with a qualification form below.
For the past few weeks, we’ve been talking about how timeshare companies are creating an awful lot of smoke around timeshare cancellation. While there are some fires that need to be extinguished, the entire relief industry doesn’t deserve a bad wrap. Keep in mind, fractional owners would never be susceptible to relief scams if the resort didn’t continuously fail to make the purchase worth it. The truth of the matter is, canceling vacation ownership is not something to be feared.
When buyers take the time to research the companies they do business with, the end result tends to be a satisfactory one. Despite the growing number of scams, quality resolutions are easy to find when you know what to look for. If you want to get out of your timeshare, then it’s probably not in your best interest to lean on the resort for advice. Especially when their main prerogative is to keep you under contract and create fear around canceling vacation ownership.
If you’ve been following along, you’ve been able to see how timeshares are currently leveraging news releases, lawsuits and even proposed state laws to discredit timeshare exit services. They continue to prove they have no interest in improving timeshare products or the overall experience of the purchase. Now that people are canceling vacation ownership more than ever before, timeshare companies are frantically trying to control the narrative while attracting new buyers.
How Timeshares Deceive Their Owners.
Although resorts say fractional owners are their number one priority, they rarely provide evidence of these claims. When you actually think about it, nearly all of their assertions lack substance. The initial presentation was probably riddled with promises that never came true. Their keen ability to persuade people by using smoke and mirror techniques is astonishing. But we’re not exactly here to stand in awe of their deceit.
Timeshare companies have a unique ability to influence their users in a number of ways. Aside from spinning industry news in their favor, they enjoy sending letters that warn their users about timeshare cancellation services. They believe it helps them build rapport with buyers. Since a client of ours shared one of their letters with us, we thought it’d be interesting to break down the message to show you where the deceit lies.
Misleading Communication From a Prominent Resort.
The letter started off by discussing the reason behind their communication. It said, “[We have] noticed a large increase in third party companies acting as fraudulent resellers, or trying to solicit our owners with false promises to provide timeshare “transfer” or “exit” services. It is critical that you understand key information.” As you can see, they clearly want the owner to believe the resort is in their corner. So let’s see how the letter’s claims hold up.
1. “Timeshare companies do not negotiate “timeshare exits” with unscrupulous timeshare exit companies. These companies are not authorized to represent us and have no special access, relationship or method of obtaining an ‘exit’ for you from your timeshare contract. Absent an agreement, or court proceeding, there is no way for these companies to ‘exit’ you from your timeshare without causing you to be in breach of your contract.”
First and foremost, timeshare companies do in fact commonly respond to the legal team of an attorney backed service. The idea that owners can’t legally extricate themselves from an oppressive timeshare contract is simply a myth created by the timeshare itself.
The resort inevitably wants unhappy owners to use their internal “solutions” for relief. This is one of the ways they cause buyers to believe spending more with them is the only way. Many timeshare owners don’t even think about relief after reading a warning like this. Paying for an upgrade seems logical when you can’t book the condo and legally canceling vacation ownership is deemed impossible.
If you’ve owned your timeshare for some time, you’ve probably experienced at least one acquisition, if not several over the years. Many uncertain owners fall for conditional upgrades during mandated owners update meetings. They usually start looking for a way out after realizing these new programs only created more problems. The cycle continues from here.
When timeshare companies are able to create doubt around cancellation and kill the hope of their users, they profit tremendously. Truth be told, half of the industry’s recurring revenue stems from dissatisfied buyers trying to improve their experience. It’s a part of the grand scheme.
2. “Scare tactics used by many companies are false and designed to convince you to seek cancellation of your membership. Many companies invite members to attend seminars and free dinners to learn about supposed “timeshare law changes” or “maintenance fee increases” that will affect their account. Most notably, members are often incorrectly told, “their children will automatically inherit and become liable for the timeshare annual dues.” Don’t fall victim to these lies.”
Have you ever accused someone of doing something that you do unethically? This may sound confusing, but we’ve all done it. When people are hiding something, they often try to deflect attention in order to avoid consequence or accountability. The timeshare’s response here is a head scratcher, but it fits this mold to a “T”. They’re literally warning owners about the same type of tactics they use. Sadly, many of the masterminds behind exit scams are former timeshare employees. They know how to use these tactics well and they learned from the best.
Although many exit programs do use premeditated sales events to target disgruntled owners, not everyone is conned into canceling vacation ownership. What the resort fails to acknowledge is the owner’s disdain for the property. When you think about it, every exit scam lies. Telling people to expect lies from every timeshare cancellation firm is just as immature as saying every eleven-year-old boy is evil because two stole some candy from your store.
Moreover, how the resort responds with the words “many” and “supposed” is also very telling. They never really refute the facts that many timeshare owners hear about rising maintenance fees and timeshare laws. At the same time, the way it’s worded cleverly creates doubt around certain facts, that if believed, may sway people from canceling vacation ownership. Discrediting all sources encourages owners to eventually turn back to the resort for help.
When working with a reputable exit team, the facts presented about your contractual agreement will not be lies. The key to finding timeshare resolve lies in your ability to locate and trust these companies. If the resort actually cared about their users then they would educate them on ways to find a quality solution. Whether you hire us or not, we hope to help you find this resolve.
3. “Any member who is working with a timeshare exit company may NOT be eligible for our member relief programs. Timeshares have developed and publicized a range of services to help members adjust their ownership to meet their needs. These include options to modify or rewrite loan terms, and our internal program, which for a fee allows members who meet eligibility criteria to retire all or part of their membership. Members have notified us of timeshare exit companies attempting to use these programs – charging them much higher fees to access a program that the members could have used on their own. Any member who is working with one of these companies may not be permitted to use these member relief programs.”
Again, the purpose of their response is focused on promoting their in-house solutions. While there is a lot to unpack here, let’s not lose focus of their intent. They want you to believe that even though an upgrade hasn’t worked out for you, there are a “range of services” at your fingertips. But if you decide to go with these other guys, who honestly can’t be trusted anyway, then you’ll miss out on everything we have to offer. Oh yea, if you qualify.
What they fail to mention are the strict details of their “eligibility criteria”. When you’re able to gain an understanding for the timeshare system, you’ll quickly see that this is the same pitch used during the initial presentation. Exaggerated promises and a world of possibilities can really cloud your judgement. It’s why so many people decide to buy a timeshare faster than it takes them to purchase a new fridge.
Unfortunately, far too many fractional owners find themselves in an immense amount of debt that they can’t escape simply because they keep believing in empty promises. It’s why the trend often continues with a phony relief agency. Many never take the time to find someone that actually cares and never get past the loud sales pitches of the timeshare industry.
The timeshares statement above is like your bank telling you that you will not be approved for a mortgage unless you use their realtor. Mind you, a real estate agent has nothing to do with the lender. Timeshare companies don’t specialize in canceling vacation ownership, they specialize in selling intervals. Refusing to help owners if they seek a second opinion makes no sense at all. It’s pretty controlling if you ask us.
At the end of the day, timeshares want buyers to remain under perpetual agreements. They aren’t built to create satisfaction, rather the desire to purchase more. Still, they’re going about it the wrong way. Why don’t they spend their valuable resources on an improved experience – instead of selling more, slandering the help and claiming to be better than cancellation scams?
If relinquish programs were more prevalent, processes were more clear and the resort actually helped buyers get out of timeshare contracts when it wasn’t working out – then the appeal of canceling vacation ownership with a third party would go away. Even though they can’t sustain a trustworthy reputation this way, it seems timeshares want to continue taking chances at the consumer’s expense.
4. “[We have] documented cases of timeshare exit companies failing to communicate true account status to their clients. We also have documented cases of these companies suppressing the debt collection letters, which we send, failing to pass them on to their clients. While this may create the illusion that the timeshare exit company has obtained a “safe” and “legitimate” exit, the reality is very different. lf you find yourself involved with a company, to ensure you are getting the full story, we strongly recommend that you ask any representative to provide you with copies of all correspondence we send. It’s also good to remember that you can access your account through our online member portal to review the true status of your membership.”
If a timeshare owner has appointed another party to handle the dealings of their timeshare contract, then the appointed party should have their best interest in mind. In the response above, the documented cases that the timeshare speaks of are examples of scams. Of course they will “suppress” documents that might create doubt around the scam. Similar to the timeshare, the longer scams lead owners on, the more they can collect. But this doesn’t mean all representation should be questioned.
It is important that the timeshare owner and “Attorney-in-Fact’s” interests are aligned. This boils down to knowing who you are doing business with. It is also important that you understand what you will be receiving and what to expect as a client throughout the process. This will be very clear when you hire a reputable company. All of your questions and concerns will be addressed.
On the subject of debt collection letters, many timeshares will leverage third party collectors to either service the debt or buy the debt for a fraction of the amount owed. Consumers have rights that can be exercised. While the resort warns users of important information being held from them, they have to understand all communication should go through your representation.
You need to be able to trust the relief company’s intentions and know your best interest is a priority. Something that timeshares have yet to prove. The last thing they want you to do is officially cease communication with them. The response here is their way of scaring you. When you exercise these rights with a professional cancellation company, their collection attempts can’t isolate, harass and intimidate you with threats. The ability to avoid them and rest easy is a very good thing.
5. “[We have] taken an aggressive stance against unscrupulous timeshare exit companies. To date, we have filed litigation against a dozen firms. While we can’t comment on active cases, you can find numerous news articles online about how we have obtained court ordered, permanent injunctions against timeshare exit companies in no less than seven lawsuits. You can also find articles online about timeshare exit companies going out of business, leaving their clients with none of their promised outcomes, nor refunds of fees paid. You can find links to a number of recent legal cases and news articles documenting these efforts and their outcomes at Fractional Owner Cancellation Awareness .com/additional-resources. Feel free to do your own research. lt is important that you understand these facts. Any questions as to how the facts and risks in these cases apply to you should be directed to your representatives.”
We combined the last two responses into one because we felt both are one in the same. Even though the industry is definitely littered with false hopes and failed promises, scams never last long. No matter how the fraud takes place, anyone can publish their own opinion regarding the cause. What’s interesting here is that the resort doesn’t mention unscrupulous timeshare companies. Plenty have also failed over the years, leaving helpless owners with the bill.
The response by the resort also seems to suggest they should be praised for pursuing scams. Even we share information on fraud. Aside from publishing articles on identifying scams, we did a two-part series on companies that didn’t know how to get rid of timeshares. The difference between our content and theirs is that they like to spin the facts to their advantage while we try to give consumers an advantage. The simple fact they mention timeshare owners being left with “none of their promised outcomes” is interesting to say the least. Isn’t that how most buyers already feel?
While this resort may have helped shut down seven-or-so scams, they’ve also falsely accused plenty of genuine cancellation companies. Most have resulted in settlements out of court – but they don’t mention them here. Just because a timeshare files multiple lawsuits doesn’t mean the claims are valid. It also doesn’t mean their intentions are good. Most cases are ruled “overreached” or similar and dropped by the judge anyways.
The Attorney General of Arizona is just one of many lawsuits brought against timeshare giants for aggressive and questionable sales practices. Besides, plenty of former employees have spoken out about what they were asked to do. We’ve covered a lot of this ourselves. While this is only one example of a class-action suit win for the consumer, there are many other individual suits filed by disgruntled owners every day.
Canceling Vacation Ownership is Tough.
While the resort responsible for this letter wants you to use their websites for information, we urge you to thoroughly research their claims. Google normally doesn’t render cases against timeshares that are listed by government websites unless you have the case number or there was an article written about it. However, you can look on sites such as Justia.com to find an infinite list of cases filed where the timeshare giant is the defendant. There’s no need to allow them to control the narrative.
When canceling vacation ownership becomes important to a buyer, they deserve to know the truth. They’re tired of being sold on options that don’t transpire and they deserve a quality, transparent resolution. We find it unethical to solicit happy timeshare owners and understand there are many predatory agencies in the industry that do so. Persuading you to cancel is never on our agenda, but we want you to know relief is possible if the desire is there.
At the end of the day, attempting to lead timeshare owners to believe scams and ethical cancellation companies are one in the same, is highly unethical. To say we’re disgusted is an understatement. We’ve put a lot of effort into the reputation we’ve built. None of it has been based on false promises or at someone else’s expense.
We take pride in the services we offer and hope that the industry’s attempt to discredit fractional owner cancellation doesn’t alter your judgment when it comes to relief. If you have any questions, you can always schedule a haggle-free consultation. To proceed as a client, simply fill out the eligibility form below.