The timeshare industry has historically been plagued by resale companies who use misleading sales tactics and charge sizeable fees to resale the timeshare units of frustrated timeshare owners.
Using false and misleading statements of what buyers could expect from their timeshare ownership, the industry has a tarnished reputation which over the years grown ever worse. In 2008, with the collapse of the economy and crash of the stock market, many homeowners found themselves no longer able to afford their homes much less the timeshare that they had purchased in a moment of weakness. Because a timeshare is essentially a lifetime obligation to pay maintenance, taxes and fees it is a liability not an asset, that many people could no longer either afford or want. Faced with the prospect of ever increasing maintenance fees, and desperate to get rid of the so–called “vacation of a lifetime”, many timeshare owners turned to the timeshare resale market in an effort to be relieved of their lifelong obligation to pay ever increasing dues and fees.
Into this vacuum of desperate owners wanting to sell, the timeshare resale industry was born. Armed with false promises of ready buyers, fast sales, big profits and money-back guarantees, fly–by–night scammers proliferated with promises of a quick sale and lots of money for what was now an unwanted timeshare. Timeshare attorneys know that timeshares are not an appreciating asset and there is no ready market for a used timeshare. A simple search on eBay can verify the truth of this statement. By simply entering the search term “timeshare”, hundreds if not thousands of supposedly valuable timeshares will appear for as little as $1.00, some with the seller agreeing to pay all the closing costs.
With the timeshare resale scam running rampant, the Federal Trade Commission and state consumer protection agencies began to shut down dishonest timeshare resellers for bilking timeshare owners out of millions of dollars. The state of Florida quickly passed a state law designed to crack down on this kind of fraud. That law forbids timeshare resellers from making unfounded promises and collecting large upfront fees. The Federal Trade Commission was even more proactive, spearheading a national effort against the timeshare resale scam bringing over 200 actions nationwide against the scammers in 28 states. Many timeshare resale companies claim to have buyers waiting to make a deposit on your week. All they need is a $998.00 deposit from you. They will tell you that it’s refundable. Or the company has a money-back guarantee. I know that you want to believe that pitch, but please don’t. There are not any buyers waiting to get your timeshare. Once the resale company has your money, they have no significant incentive to work for you. And even with guarantees and other promises, they very likely will not refund your fees when you complain.
There are few exceptions to this advice against paying up-front fees. The resale listing person will claim that “for just a nominal fee” ($200-$3000 on average), they will place an ad in a specific timeshare resale publication or online listing service, and expose your timeshare unit for top dollar to a wide audience. With the current economic problems there has been a surge in people trying to get out of their timeshare, and therefore the secondary market is flooded with cheap or even free timeshares. Most timeshare owners purchased it when times were better, and now have come into life changes, or have grown tired of low availability and huge fees, and now need to get rid of their membership. Unfortunately, this created the Timeshare Resale, or shall we say Timeshare Scam market. Because there is an overwhelming number of people who are upset being stuck with their timeshare and desperately want to get rid of it, there are an overwhelming number of fraudulent companies that want to take everything they can get from timeshare owners.
There are very few honest timeshare resale companies out there, and even though not everyone who is interested in selling your timeshare is out to steal from you, there are quite a few tell-tale signs that a company is not on the up-and-up when it comes to timeshare resale. Some of these include:
They call you and tell you they have a buyer for your timeshare. If you still owe money on your timeshare, there is not a legitimate buyer that wants it. They ask for money to get you released from your timeshare contract. During the phone call the scammer will try to scare or pressure you into paying them in advance. They want up front money to list or market your timeshare. If a real estate company doesn’t need the seller to give them money to sell their house, why would a timeshare resale company? Be concerned if the contact wants to rush you through the process. High pressure tactics such as when you bought the timeshare are common. The scammers don’t want to give you time to think about what you are agreeing to, and they certainly don’t want to give you the time to contact your attorney.
A well-trained scammer specializes in getting you to make a decision in one phone call. They want to get as much information out of you as possible, and never speak with you again. They won’t give you an accurate number to contact them at because they don’t want the authorities being able to find them.
Do your research before choosing a company to sell your timeshare. Selling property is a big decision, timeshares are no different. Take your time and find a company that will get the best deal for you they can and confirm they are a credible company. Check with their state’s Division of Corporation to see how long they have been in business. Search online to see if there are any complaints, reviews or posts about them. The more research you do, the less chance you have of getting scammed out of your money or property.
Ideally, talk to a timeshare attorney. Many of them offer free consultations. Take advantage of their generosity and find out what your rights and responsibilities are. If there is any way to get out of your contract, whether it is through using the option known as timeshare property cancellation or selling your property, they will know.
If you are a timeshare owner who is no longer interested in the ever increasing fees, lack of availability and high pressure sales pitches to “upgrade”, avoid the timeshare resales scam at all costs. Timeshare owners should question any offers to help them resell the resort unit. If you are thinking of selling a timeshare look first at what is out there on the market. Listen carefully for the promise of lots of money quickly and a request for an upfront fee. Those are two signs of a timeshare resale scam.
The California Bureau of Real Estate warns: “The fraudsters use the names of companies (some of which have professional-looking but usually phony websites, fancy-sounding titles and addresses, and purport to be escrow, timeshare resale, finance, and/or title service businesses) and individuals in California.”
Attorney Mitchell Reed Sussman provided another warning to timeshare owners who are trying to sell a burdensome timeshare. “The scams are becoming more and more sophisticated, with ‘timeshare resale companies’ asking for money,” says Sussman. “But remember, if you are selling anything, there’s absolutely no reason for you to pay a dime.” Sussman, a timeshare exit attorney for over ten years, is receiving more emails and calls than ever from worried timeshare owners hoping to sell their timeshares.
“Beware of any company that asks you for money to sell your timeshare. You’re the seller. You’re supposed to receive the money.” Sussman has been an advocate for timeshare owners who have been duped by a billion-dollar industry that often does nothing more than ‘presell a lifetime of vacations at inflated prices.’
“They wrap up the presentation pitch with a big bow to make it look like they’re selling real estate. But if it’s real estate, then why is almost impossible for a lay person to resell?.” “If these timeshares have value, why can’t my clients to get rid of them without engaging in same type of fraud that the developer had to use in the first instance to sell them?” he asks. And now, according to Sussman, timeshare owners who are unable to use their timeshares either due to age or illness are being taken advantage of by ‘resale agents’ who ask for upfront money from the seller. “I’m receiving more and more emails from people across the country complaining that they’re being told they have to pay money to a company or a broker in order to sell their timeshare. I tell them that’s a sure sign it’s a scam.”
As with all purchases, the standard Latin warning, Caveat Emptor or Let the Buyer Beware, applies. Now, however, it appears Sussman is warning sellers to beware. “If you’re selling, you don’t pay. Period.”
Remember this, once purchased a timeshare is very, very hard and almost impossible to sell. So, if you are looking to be relieved of your timeshare and its lifelong financial obligations, find an attorney who specializes in this field to assist you. At the law offices of Mitchell Reed Sussman & Associates, our timeshare attorneys have helped thousands of timeshare owners who want to be released from their timeshare.
Many unscrupulous timeshare companies are refusing to take back their timeshare and are blocking the sale or transfer of an unwanted timeshare to third parties making timeshare not an investment but a financial liability for the life of the timeshare owner.
Because the travel and tourism is one of the most important industries in the state of California account for about 100 billion dollars annually, the legislature has enacted consumer protection statutes that are designed to protect consumers from fraudulent and deceptive timeshare tactics.
Known as the Vacation Ownership and Timeshare Act of 2004, this consumer protection statute that may be utilized by a timeshare owner to regulates disclosures and representations made by timeshare salesman as well as the content found in timeshare offering brochures. In addition, it regulates the conduct of timeshare presentation as well as the availability of timeshare to owners who are often times required to compete for timeshare use with rental of their timeshare to the general public.
The Act is quite extensive in its prohibitions of representations and conduct in connection with a timeshare presentation. Some of the more frequent violations of the Act, which can be found in California Business and Professions Code 11245, are the following:
- Make any material misrepresentation that is false or misleading in connection with any advertisement or promotion of a timeshare plan.
- Make a prediction of any increases in the resale price or resale value of the timeshare interest.
- Materially misrepresent the size, nature, extent, qualities, or characteristics of the offered timeshare plan.
- Materially misrepresent the conditions under which a purchaser may exchange the right to use accommodations in one location for the right to use accommodations in another location.
- Materially misrepresent the current or future availability of a resale or rental program offered by or on behalf of the developer.
- Materially misrepresent the nature or extent of any incidental benefit.
- Fail to deliver any item offered in connection with a promotion to a prospective purchaser upon the conclusion of the sales presentation.
- State that the purchase of a timeshare interest constitutes a financial investment.
- Fail to clearly and conspicuously disclose, prior to the execution of any purchase contract, the annual maintenance and association dues or any separately billed taxes, when applicable.
- Fail to clearly disclose in writing any automatic charging or billing procedure.
In addition to the foregoing, the Act provides a formula which restricts the rental of timeshare units to the general public and requires a one “to” one purchaser to accommodation ratio to ensure that timeshare owners can indeed have access to the timeshare that they purchased. ( California Business & Professions Code 11245 (b), 11250 )
Violators of the Vacation Ownership and Timeshare Act can be sued by owners for damages or for injunctive or declaratory relief. Moreover, the Act does not exclude other remedies provided by law, including action under California’s Unfair Competition Law.
So if I have a timeshare that you are no longer able to afford or simply want to sell it what can you do?
Call your timeshare company and see if they are willing to take back their timeshare. If they are not and its seems like you will be stuck with the timeshare and its obligations to pay maintenance fees for life, you should consult with a lawyer familiar with these laws.
In sum, you should not have to be saddled with timeshare fees forever.
With that said, you should note that with any debt cancellation or readjustment work there is typically one form or other of negative credit reporting. So if you are planning on purchasing a home, a car or simply doing a refinance of a major item, our timeshare attorneys do not recommend that you simply stop paying on your timeshare. We do recommend that you continue to pay and do not cancel your timeshare until such time as you have secured the necessary financing.
Once that is accomplished, should you come to the conclusion that you no longer can or wish to pay on your timeshare and be responsible for its ever-increasing fees, only then should you seek out an timeshare attorney specializing in this field.