When it comes to vacations, most plan their year around a significant trip that often comes with a hefty price tag. Unfortunately, those seeking to save money on major expenses such as accommodations may come across unscrupulous scammers and predatory companies. Timeshare scams are no exception to this concept. According to timeshare attendees, they have voiced concerns for fraud, misrepresentation and omitted information with review forums, government agencies and timeshare lawyers.
Timeshares offer potential buyers with promises of idyllic locations, luxurious accommodations, and even investment opportunities. However, the reality for some consumers is quite different. After shelling out tens of thousands of dollars for their timeshare, they are confronted with difficulties in booking their desired vacations, undisclosed maintenance fees, and a plethora of other issues.
Owners Report Timeshare Scams
Reading through the thousands of complaints online, they paint a very different picture.
“We were lied to and deceived by this company, we need an investigation done immediately. We were advised that the timeshare meeting would only last an hour, it ended up lasting over 3 hours. They kept giving us the runaround when we told them we did not want to buy. Empty promises were made that were not kept and we ended up spending thousands of dollars on our first vacation because the rules to the timeshare were never fully explained. Also told us the maintenance fees would never go up which was a lie. We were coerced into signing a contract by the promises of many benefits and flat out lies. The benefits we were sold on, did not exist and were intentionally misrepresented in order to get us to sign a contract”, stated a consumer who filed a complaint with the Better Business Bureau (BBB) on 06/05/2023.
False Advertising Complaints
Consumers like those in this BBB complaint often report after signing a contract that they found the offers were not as advertised. Another BBB complaint filed the same day had this to say, “I feel that I was not given accurate information when I signed up for this agreement, and I have experienced significant inconvenience and financial burden as a result. When I initially purchased my timeshare, I was not given the actual amount of the maintenance fee, which has been a significant expense over the years.
The complaint continued with additional grievances relating to the timeshare ownership. “Additionally, most of the time, my points are not enough, and I have to pay extra aside from using my points. These are things they don’t cover in the presentation. Owning a timeshare has been a burden on me both emotionally and financially. I cannot see any benefit to owning a timeshare, and it would also burden my family if it passed it on to them. The continuous increase in the maintenance fee has become unbearable… I found that it is cheaper to book a room in a hotel 2-3 times a year rather than using the timeshare points because of the cost of the maintenance fee. This has led me to conclude that owning a timeshare is a scam. I believe this company should be investigated to prevent others from falling victim to this scam.”
Alternative Vacation Options Prompt Owners to Sell Timeshare
The emergence of home sharing platforms such as Airbnb and Vrbo are growing in popularity. These sites coupled with the continuous growth of the Online Travel Agency sector, have prompted owners to consider selling. As owners find that these modernized platforms offer more convenient and flexible travel options. However, they often discover that their timeshares hold little to no value.
A Maryland resident told the BBB that her family’s decision to sell their timeshare stemmed from undisclosed maintenance fees. Additional the availability of more appealing vacation alternatives. “We thought we would be able to give it to our children someday or sell it for extra money for our retirement and the (timeshare) sales team made us feel like all of this was possible,” she said. “We would have never purchased this had we known how much it would really cost.”
The number of complaints filed with the BBB regarding timeshare scams has seen a surge following the pandemic. In part due to consumers resuming their travel plans. Once the initial excitement subsided, many buyers found themselves confronted with the realization that timeshares were long-term financial commitments. Unless of course, they could successfully transfer ownership to someone else. This predicament can be avoided by following a recommendation of the BBB. The bureau suggests that timeshare sellers should provide comprehensive historical data, along with projected increases, for all associated fees.
The Lure of a Timeshare Presentation
Numerous consumers have reported a timeshare scam to the BBB which involved the sales presentation initially portrayed as an effortless means to obtain benefits. All they needed to do was listen to the program advantages for vacation possibilities. Several attendees were enticed with complimentary dinners and captivating shows, while others were promised tickets for exciting excursions. The most enticing offers dangled the prospect of cash rewards or a complimentary weekend stay at a luxurious timeshare destination.
“We were told to fill out a form to win a free trip to Disney,” a New Jersey resident told BBB. “This was the sales strategy to get us in for a ‘free dinner’ while the sales representatives presenting this ’amazing’ travel program.”
However, as detailed through the remainder of this article, the presentations almost always materialize into an uncomfortable, lengthily sales pitch.
A Perfectly Orchestrated Sales Pitch
Meetings that were initially scheduled for 90 minutes often extend well beyond the expected timeframe. It is not uncommon for presentations to extend up to a staggering 8 hours. Attendees have reported timeshare scams due to the misleading time frame of the presentation among other aspects. Typically presentations involve participants completing questionnaires. This serving the dual purpose of establishing a connection with attendees and assessing their ability to purchase. The first presenter typically employs captivating visuals and compelling information about the timeshare program. They aim is to keep idealistic destinations at the forefront of the audience’s thoughts. The presenter may emphasize how the purchase would result in cost savings and serve as an excellent investment opportunity.
As the presentation unfolds, numerous psychological factors come into play. Prospective buyers start developing an emotional attachment to the destinations being promoted. They may also perceive their hours of time invested as a waste if they choose not to sign up. Once this stage is reached, salespeople often employ high-pressure tactics to seal the deal. They may present limited-time offers, insisting that the deals are exclusively available today only, although such claims are seldom accurate. Not only have attendees complained about falling victim to today only deals, but were also been they can easily cancel.
Timeshare Cancellation Letter
Most contracts do not make cancellation as easy as sellers claim. Attendees, exhausted and hungry after sitting for hours, may succumb to the pressure and agree to make a purchase. At that moment, they believe it’s the quickest way to end the meeting. Customers have filed timeshare scam complaints with the BBB, stating that sellers failed to disclose rescission windows during the presentation. It wasn’t until several days after the purchase when the buyers read the contract that they discovered these terms.
According to a BBB report, the New Jersey resident stated that she did receive a complimentary dinner, but there was no Disney trip as promised. Instead, she was convinced to buy a timeshare. However, when she tried to book her stay, she found the process so challenging that she only managed to go on the trip once in two years.
A recent BBB article cited Christopher Elliott, Chief Advocacy Officer for Elliott Advocacy, on the subject of timeshare. He had this to say, “Timeshares are sold in a very aggressive and borderline unethical way. The way that timeshares are sold should be illegal.” Buyers should beware anytime they are considering a timeshare, he said. “You have to work deliriously hard to find someone who is happy with their timeshare.”
Individuals would likely find it advantageous to have a timeshare lawyer review any contract before proceeding with a purchase.
Financial Burden Timeshare Complaints
If a potential buyer is unable to make the upfront payment, subsidiaries may finance the purchase on a 10-year term. However, according to the BBB, there have been multiple reports where buyers have faced the burden of exorbitant double-digit interest rates. Reports also highlight a significant negative impact on their credit scores. Not to mention, online complaints have also uncovered that many attendees are unknowingly signed up for a credit card. These branded cards are often backed by Comenity Bank, American Express or Barclays. The down payment for the purchase may be charged to a revolving line of credit.
One BBB report highlighted the experience of Roy from Lafayette, Indiana. He found himself overwhelmed by the payment obligations associated with his timeshare. This resulted in his inability to meet the financial demands of his home and business. Eventually, Roy was forced to close his business, leading to a devastating impact on his overall financial situation.
Furthermore, the maintenance fees associated with these purchases can amount to thousands of dollars annually. Shockingly, some buyers were unaware of the ongoing payment obligations they had to fulfill each year.
“We found out after joining them, six months later,” stated one Louisiana resident in a BBB report who was taken aback by a $750 bill for maintenance fees. “They were very manipulative during this process.”
The increase in those fees each year is a commonly undisclosed fact in presentations that is complained about.
Timeshare Availability Complaints
Over time, owners may discover that it becomes increasingly challenging to secure bookings for their desired time or location. They might encounter blackout dates, thereby limiting their ability to use their timeshare as frequently as they initially envisioned. Owners have complained that desired locations or dates promised to them are only available to “cash paying” consumers, not owners. This could be an understandable frustrating revelation. Especially considering if they were told the timeshare is only available to owners, not the general public. Owners may also be presented with the solution to “buy more” in response to availability concerns. However, according to online complaints, upgrading may not be the solution.
Sarah from Claremore, Oklahoma informed the BBB, “When we originally purchased, we were not told that we only had one week of usage every other year. We were told at the update meeting the only way to fix this was to buy more. We were told that this would fix the problem of never being able to make a reservation. After purchasing more, we found out that this was not true either.”
Regulatory Actions for Timeshare Scams
In recent years, the FTC, DOJ, and State AG have increased efforts to uncover deceptive practices within the timeshare industry. This has resulted in the issuance of refund checks amounting to millions of dollars.
In 2019, Arizona took steps to strengthen its laws pertaining to timeshares. Advocates believed that the original version of the bill had the potential to offer some of the most robust consumer protections in the country. House Bill 2639 aimed to mandate the disclosure of various costs associated with timeshares. This included estimated annual and lifetime assessment fees, taxes, maintenance fees, and utilities. The intention was to provide buyers with a comprehensive understanding of the total cost of their purchase over its lifetime.
Additionally, the legislation sought to grant owners the right to cancel their contracts after ten years if they had fully paid the original fee and remained current on all recurring fees. Unfortunately, both of these provisions were removed from the bill, much to the disappointment of consumer advocates and legal experts.
Timeshare Legal Protections
State laws regarding the right of rescission for buyers vary, although most states offer certain protections in this regard. These protections usually come in the form of a designated period. Commonly known as a “cooling-off period,” during which buyers have the right to cancel their purchase for any reason. Generally, these periods are relatively brief, typically ranging from three to 14 days. However, there have been suggestions from legal experts to extend these timeframes. The purpose being to provide buyers with more ample time to carefully consider their purchase. Experts argue that the sales techniques employed in the timeshare industry often use high-pressure tactics leading many to reconsider.
“A timeshare purchase agreement is unique among consumer contracts because the contract typically creates a non-cancellable lifetime obligation,” a 2020 article for the National Association of Attorneys General (NAAG) published. “If consumers were made aware of the timeshare’s actual life-long financial obligation and, consequently, the transaction’s high risk, many would not elect to buy.”
Some individuals have advocated for the application of the Truth in Lending Act (TILA) to all timeshare purchases. The TILA mandates clear and transparent terms for borrowing to ensure consumers fully understand the costs involved. By implementing similar standards, a more accurate representation of the total expenses associated with timeshare purchases could be provided.
Consumer Advocacy to Prevent Timeshare Scams
Consumer advocates argue that without these standards, unethical sellers can conceal crucial information about timeshares. Namely, escalating fees and the non-cancelable and oftentimes perpetual nature of the contracts. To address this issue, states have taken steps to introduce these types of protections at the state level. These efforts may serve as potential models for other states to follow.
The NAAG publication ended their article with this, “…it is clear that many consumers purchasing timeshares lack sufficient information and protection. We encourage other states (like Arizona) to propose their own timeshare legislation and to conduct thorough investigations of timeshare companies about which consumers have filed complaints.”
Timeshare Scam Tips for Consumers
• Conduct thorough research on the timeshare company, and consider seeking advice from a timeshare lawyer to review any provided documentation.
• Carefully read the timeshare contract to understand restrictions on cancellation periods, lifetime commitments, and potential obligations for heirs.
• Stay cautious of high-pressure tactics. If you feel someone is attempting to pressure you into a deal, it’s best to walk away.
• Engaging a reputable timeshare attorney can help prevent headaches if you suspect you have fallen victim to a timeshare scam.
• Consult with a timeshare lawyer if you wish to decline an inherited timeshare.
• If you want to sell your timeshare, consider contacting the resort directly to inquire about any available buyback programs.
• Be wary of unsolicited offers to sell your timeshare. This is especially true if the business promises a large return. Such offers should raise red flags.
• Avoid resellers who claim that your timeshare’s location is in high demand. This language is often used to make unrealistic promises that are difficult to fulfill.
• Maintain realistic expectations regarding the value of your timeshare. Very few timeshare contracts have proven to be profitable investments, and you may incur costs to exit the contract.
• Familiarize yourself with the Federal Trade Commission’s (FTC) tips and information on timeshares, vacation clubs, and related scams.