Monday, May 29, 2017

Of the four types of timeshare relief companies, only one is truly legitimate.

When searching for a way out of a timeshare, the timeshare owner will invariably happen upon any of four kinds of timeshare relief companies: those that claim to sell your timeshare, those that claim to transfer your timeshare, those that claim to donate your timeshare, and those that use a licensed timeshare attorney to negotiate directly with your timeshare. Of these four types, only the attorney negotiating with the timeshare is a legitimate strategy.

In this series of posts I will talk about all four types, and explain why the illegitimate types are allowed to stay in business.We begin with those companies that claim to sell your timeshare.

They're called timeshare resale companies, and most of them must change their name every couple of years due to all the bad press they get from unhappy customers. The pitch is simple: Send us a few hundred bucks and we'll sell your timeshare for you. There's just one problem; the timeshare almost never sells. In fact, the odds that it will are well under 2%. But these companies will take your money anyway. They stay in business because their contracts are carefully worded so as not to guarantee anything. They will never go away for one simple reason: a sizeable number of timeshare owners refuse to believe that their timeshare has no value.

And so, every year, thousands find out the hard way.

Come back next week for my thoughts on timeshare transfer companies...

Sunday, May 21, 2017

The Top Ten Tricks That Timeshares Pull (By Tom Heehler)

Trick #2: Get customers to pay off their timeshare mortgage before they figure out they've been taken

Timeshares know that a certain percentage of customers will eventually figure out that they can negotiate out of their contract by using a law firm or an attorney-staffed agency such as PMG. That's why timeshares use a couple of sneaky tricks to get as much money as possible from their customers as quickly as possible. One such trick involves the interest rate charged. Usually it's pretty damn high. I'm talking anywhere from between 13% to 22%. This interest-rate strategy encourages customers to transfer their high-interest timeshare debt over to a lower-interest bank loan, which pays off the timeshare instantly. Once the timeshare has been paid off, it doesn't really matter if the customer figures out how to cancel their timeshare contract, because the timeshare already has its money. What's more, those customers who are unable to refinance, and who never realize the extent to which they've been deceived, will pay dramatically more money to the timeshare over a ten-year period, often more than twice the original purchase price.

A second strategy involves having the customer open a new credit card with a third-party provider such as Barclays, and putting the down payment (or even the entire amount) on that credit card. Often the customer is made to believe that the new credit card is issued by the timeshare itself, when it is actually a third party credit card. Once the timeshare debt has been transferred to the card, the timeshare is paid off entirely, and will feel little to no pain when the customer eventually figures out how to escape the contractual obligation.

Wednesday, May 17, 2017

The Top Ten Tricks That Timeshares Pull (By Tom Heehler)

When you help people out of their timeshare contracts for a living, you spend a lot of time listening to stories about sales presentations. The following list of timeshare tricks is based on hundreds of conversations with as many clients. I consider these to be the most effective techniques used to separate people from their money. Most of these tricks are used by all timeshare salespeople, regardless of the timeshare company they work for. We’ll kick off today with trick #1:

Trick #1: Starting out with a ridiculously high dollar amount.
The salesperson does this for two reasons, both of which are critical to getting the sale. By starting off  extremely high, the salesperson establishes a dollar reference point by which all other offers can be compared. The technique usually results in the following exchange between husband and wife after their purchase:

“If we hadn’t held out as long as we did, Honey, we would have paid $50,000 instead of the final price of $15,000!”

(Little does the customer know, the salesperson would have accepted $7,000 as the final price.) This trick is pure psychology: $15,000 sounds like a small number and an awesome deal when compared to $50,000 – no two ways about it.

Second, by starting out high, the salesperson now has the ability to make up an excuse for lowering the price, to make the customer believe they are getting a steal. This excuse usually takes the form of a supposed foreclosed property or a trade-in.  Rarely is this actually the case, but the salesperson will lie and say it is. This sneaky trick also plants a seed in the customer’s mind that their timeshare can be given back to the timeshare company in the future, which is simply not the case.

Friday, May 12, 2017

Ask Tom Heehler: When should I pay an upfront fee to get out of my timeshare contract?

One of the biggest misconceptions relating to timeshare cancellation is the manner in which payment is made. A google search of the phrase ‘cancel my timeshare’ will produce several anonymous chat-room conversations that always seem to offer up the following advice: “Whatever you do, don’t pay money upfront to get out of your timeshare.” So allow me to clear the air on this subject once and for all.

If the company you are dealing with is claiming that it can sell, rent, or donate your timeshare, then the answer is a resounding no: do not pay an upfront fee. The reason is simple. The chances of someone actually paying thousands of dollars for your timeshare - when that same timeshare can be had on eBay for a dollar - are incredibly slim. That’s why such companies need you to pay upfront; because the promised buyer or renter will never materialize, and they know it!

Sadly, too many timeshare owners remain in a state of timeshare denial for years, refusing to admit that something they paid $50,000 for, has no tangible value and never did. That’s why these re-sale companies are so successful. The only reason they are allowed to stay in business is because they are clever enough not to guarantee anything.
If the company you are dealing with is claiming to transfer your timeshare to some other entity, then again the answer is no: do not pay money upfront. What these companies don’t tell you is that they are transferring your timeshare to an offshore shell corporation. This shell company is designed to go bankrupt within three to four years of incorporation. Fortunately, more and more state attorney generals are becoming wise to this scheme and are currently pushing for legislation to ban the practice.
Now let’s address the only instance in which paying an upfront fee is mandatory:

If you are working with a firm that legally extricates you from your timeshare contract using an attorney to negotiate directly with your timeshare, then paying an upfront fee is required. The reason is simple. When you go the legal route, your official release from the timeshare is very often sent not to the attorney, but to you. So if the attorney does not collect payment upfront, there is no way to compel a client to pay, because there is often no way for the attorney to even know his/her client has received their release. What’s more, if the attorney were to negatively affect a client’s credit score for nonpayment, he/she would be damaging the very credit he had already pledged to protect throughout the cancellation process.
So the bottom line is, only pay upfront when you are having an attorney negotiate you out of your contract. And do not send upfront payment to anyone who claims they can sell, rent, donate or transfer your timeshare.