1. As of 2019, only a handful of legitimate timeshare cancellation companies are still in existence. Here’s why:
Most timeshare owners have a hard time
accepting that a timeshare -- something they’ve spent tens of thousands
of dollars on – can have little or no tangible value. So when the timeshare
eventually becomes a financial burden, their first inclination is to sell or
rent it. Unfortunately, hundreds of companies have sprouted up over the last
several years to exploit the misconception that timeshares are easily sold. These
companies fall into two categories, the sketchy type that claims they can sell
or rent your timeshare (they usually can’t), and the fraudulent type that claims to
have a buyer waiting in the wings (they don’t). Both types are fully aware that
the odds of someone actually buying or renting your timeshare are extremely low (less than 1%). Why the terrible odds?
Because of the glut of timeshares on the secondary market for only a dollar. Think
about it: Why would anyone pay you
for a timeshare when so many are listed on eBay for next to nothing?
These timeshare “resale” companies tell
you exactly what you want to hear - that your timeshare has real value. People
believe this nonsense because they just can’t understand how a timeshare
company would be allowed to sell products to the public that are, for all
intents and purposes, worthless. When you buy a car, you expect it to lose 20%
of its value as soon as you sign the contract, but you certainly don’t expect
it to lose 100% of its value. That’s exactly what happens with most
timeshares. People understandably have a hard time wrapping their heads around that.
So the first thing that timeshare owners need to do is face facts - namely these:
* The IRS values most timeshare as worthless.
* No legitimate charity wants your donated timeshare. Period.
*Timeshares spend millions to influence both Democrats and Republicans in state government. That's how they stay in the good graces of regulators.
2. Even
if you sell your timeshare on eBay for a dollar, you’re still responsible for
payment to the timeshare company if your buyer should ever stop making payments.
You
heard it right. Most timeshare companies structure their contracts so the
original owner can only transfer the timeshare by way of a quitclaim deed. But a quitclaim deed merely transfers title; it
doesn’t transfer the legal obligation to pay a monthly mortgage or an annual
maintenance fee. So while the new
owner will have legal title, the original
owner will still be on the hook for any payments due for the life of the
timeshare.
In other
words, if you are the original owner, you will always be ultimately responsible
for payments. So if you do sell your
timeshare for a dollar, make doubly sure the person to which it is transferred is
someone you can trust to make timely payments for the rest of your life, not theirs. And remember, those never-ending maintenance fees increase an average of 8% per year, so there’s a high
likelihood that your buyer will eventually tire of making payments. When that
happens, your timeshare company will find you and demand payment in arrears.
What’s
more, the use of quitclaim deeds has also allowed fraudulent charities to trick
unsuspecting timeshare owners into thinking they've transferred title to the
charity as a donation. Instead, the charity will take your “donation fee,” and
simply stop payment to the timeshare at some point in the future, leaving you,
the original owner, on the hook for payment.
So if
you can’t sell it or rent it, and you can’t even give it away, what can you do?
3. The
only foolproof way to rid yourself of a timeshare is to legally cancel the
contract.
This
means that you must negotiate directly with the timeshare company and convince them
to issue an official release. Timeshare cancellation companies do
this by holding timeshares accountable for the misdeeds of their salespeople, which
include FTC and FDCPA violations, omissions of fact, and outright exaggerations.
We’ve put together a list of companies that have a good track record of doing
just that:
Centerstone Group (Costa Mesa, CA)
Seaside Consultants (Encinitas CA)
Timeshare Compliance (Aliso Viejo, CA)Resolution Timeshare Cancellation (Madison NJ)
Whatever
company you choose, make sure their method is to negotiate directly with
your timeshare. A legitimate company will ask you to sign a limited power of
attorney, which gives them authorization to speak to the timeshare on your behalf. They should
also keep you updated on their progress throughout the process.
Again, this is the only foolproof and legal way to
cancel a contract. Stay away from any company that promises to transfer your
timeshare to some mysterious third party, sell your timeshare, rent your timeshare, or
donate your timeshare.
4. Most
timeshare companies - with the possible exception of Disney - use unlawful sales tactics.
Ever
wonder why you can’t go down to your local timeshare store to buy a timeshare? You
can’t, because the only way to sell a timeshare is to bait you with a gift, wear you down with high-pressure sales
tactics, and do it all within the confines of a hotel conference room.
Here’s
how the whole thing works:
So
you’ve taken the bait and you’re sitting in a big hotel conference room with a
lot of other people for a 90-minute presentation. The first few minutes are
actually kind of fun. The hotel is beautiful, and your host speaker is charismatic and funny. His purpose
is to create a game-show atmosphere to get everyone loosened up. He’s good at
what he does.
While this is happening,
however, you and your spouse are being watched, either from behind the stage or
on a closed-circuit camera. The people watching you are the company’s top
salespeople, and they’re looking for body language and facial expressions that match
up with past successful sales. This ensures that the best salespeople are
assigned to those unsuspecting couples with the highest likelihood of buying.
After
about 30 minutes of fun and games, the speaker adjourns, and your new
salesperson either joins you at your
table or suggests a separate room for the remainder of the presentation. For
the next hour or so, she digs for as much personal information as she
can, to use it later to close the sale. You don’t
want to seem rude, so you open up a bit and talk freely, especially since you’ve
already been treated to a comedy show of sorts, not to mention the free gift
you’re about to receive just for showing up.
Then,
suddenly, you are shocked when she hits you with an asking price, a price so outrageously
high, that you couldn’t possibly spend that kind of money on a timeshare. You
say “No way, I can’t do that”. But unbeknownst to you, that’s exactly what you’re
supposed to say. Nobody buys on the first outrageously high offer.
Next
comes your big mistake: You don’t immediately get up and leave right after the extremely high asking price. Instead, like
most people in this situation, you feel obligated because of that free gift.
But here’s the key: By not leaving, you are establishing an
unspoken agreement between you and the salesperson. It's purely psychological, but powerful nonetheless. The agreement is that your only objection is the price and that you would buy if the price were right. Otherwise, why are you still listening to the presentation?
Thirty minutes later -- or in many cases several hours later -- the price is lowered to only a fraction of the original offer, and this is
where you finally say, “What the heck, Honey. We deserve more vacations!”
Up
until this point, you’ve been subjected to a lot of psychological manipulation,
which is not unlawful. However, once you sign that contract, the timeshare has
very likely violated consumer protection law. At no point in the presentation
did your salesperson inform you of critical information that any reasonable
person would want to know when buying a timeshare. You were most certainly not informed of the existence of the secondary market where timeshares just like
yours are listed on eBay or next to nothing. At no point were you informed that
the IRS values your timeshare as worthless, regardless of the final price you
paid. Chances are good that you were also given an unnecessarily high interest
rate as well. Your salesperson probably told you that she personally owned a
timeshare herself, when in fact she never has. You were not informed of ever-increasing assessment fees and maintenance
fees. Chances are good that you were rushed through the contract without
actually reading it, after having been passed from one salesperson to another (rotation sales) to mentally wear you down.
How do
we know all these things occurred? Because our clients tell us. We know how timeshares
are sold.
5. Timeshares
use their ‘A’ rating with the Better Business Bureau to give you a false sense
of security.
Truth
be told, it’s fairly easy to get an ‘A’ rating with the BBB. That’s partly
because the Better Business Bureau is not actually a government bureau; it’s a
private company that charges accreditation fees. The fees can be so
expensive that even companies like Starbucks and Microsoft choose not to pay
the BBB, and instead remain unaccredited. So just because a company is
accredited, and just because a company has an ‘A’ rating with the BBB, doesn’t necessarily
mean it’s a good company.
Instead,
look to see how many complaints and bad reviews are listed on the timeshare’s BBB
page. While I am critical of the ease with which timeshares can maintain their 'A' ratings with the BBB, I still hold the BBB in high regard because of the dependable way in which they document official complaints and bad reviews. So compare the ratio of negative to positive. Most timeshares
have a ratio of one good review for every 25 bad reviews on their BBB page. That’s a red flag
regardless of the timeshare’s ‘A’ rating.
6 Timeshare companies plan ahead for the
possibility that you will eventually cancel your contract. Here’s how they do it:
Timeshares
are fully aware that cancellation companies are just
a google search away from every customer they have. So they know that a certain
percentage of customers will eventually figure out how to have their contracts cancelled. This is why they encourage you to open up a new credit card to fund
your down payment (often a Barclays or PayPal Credit). Once you do that, the timeshare
is guaranteed to receive that money immediately, before you realize your
mistake and decide to contact a cancellation company. You can also expect a
very high interest rate, regardless of your good credit, in the hope that you
will secure a home equity loan at a lower rate, which pays off the timeshare company before you figure out how to cancel the timeshare.
7. Even legitimate cancellation companies will give you a quote based on how much
money they think you have available to spend.
How do cancellation companies gauge what you can spend? By asking you for your monthly timeshare mortgage payment amount, or your annual maintenance fee amount. While it’s certainly not
illegal to negotiate the highest possible price for one’s product or service, I consider this practice to be very ‘used car sales’ like. You tolerated that sort of thing when you got into the timeshare; you shouldn't have to tolerate it getting out.
