If you recently purchased a timeshare and regret it, you are not alone.
If you have been looking for a way to get out of a timeshare for an extended period of time, you are not alone either.
Simply put, purchasing from a timeshare resort company is sometimes a setup for failure from the beginning of registration. This type of expense often comes at a sizable disadvantage to clients while the resorts reap maximum profits. They sell for outrageous asking prices that require financing, charge perpetual annual maintenance fees, and sometimes these financial obligations get passed on to beneficiaries such as children. That makes for an unfair deal, but this particular industry still lacks proper and lawful regulations preventing timeshare developers from doing so.
There are very few laws protecting the timeshare purchaser, and resort companies continue to get away with deceptive and disingenuous business practices. Read on in this article to learn more about the current landscape of timeshare law and what needs to change to make this industry division fair and equal for consumers.
Before we take a deep dive into the laws and ethics of the timeshare business, let's first go over the basics and find out what type of timeshare declaration you have, as the statutes for each may differ. There are three common types of vacation plans:
Timeshare ownership may be common knowledge to some owners, but others may not know that there are two types of timeshare agreements. These are more paperwork-intensive than the above, so they can be overlooked at times or just swept under the rug when convenient to timeshare sellers. The two types include:
These are essentially the vehicles used by resort companies to carry out their methods of financially placing clients into uncompromised positions. When we talk about what needs to change within the timeshare industry, it should all begin with the misleading marketing behind these many different types of timeshares.
The phrase 'timeshare' was created when a number of European real estate companies shifted their plans for tourism. Rather than renting out hotel rooms, they proposed that individuals acquire rights-to-use properties. Their main pitch was that it was more economical to own than to rent.
Since then, the timesharing concept has become rather popular in the United States. Alas, ever since its arrival in America, there have been growing concerns about the legal protection of consumers.
Nobody goes out and seeks to buy a timeshare on their own. Instead, timeshare developer vendors find you like a purchaser pursuant, and when they do, they never leave. The salespeople of these vacation properties are highly skilled. All too often, though, these "skills" seem to rely heavily on false pretenses such as deception and dishonesty to make sales. While some area prohibits such misleading advertising and sales tactics, overall, they lack enforcement and consistency state-wide.
One of their favorite tricks is cold-calling folks and offering them discounts and gifts. You may have received similar phone calls claiming you won or are eligible to win a free trip to a luxury resort. The only catch with these offers is you must attend a short sales presentation in order to be able to accept the free reward. Bribery tactics like this are how some timeshare companies fill seats for their presentations. Several state-level governments have enacted statutes to regulate these transactions, yet timeshare companies continue to find loopholes to manipulate them.
As if the tactics used to get folks into their presentations aren't bad enough, what takes place during them is tenfold worse. You may have heard that timeshare salespeople lie for a living, and well, some do live up to that billing. Every year, more and more families purchase expensive timeshare agreements without knowing the actual cost or value because of the high-pressure sales pitch statements.
Many timeshare owners feel misled, guilted, or even tricked into their timeshare purchases. As a result, they get financially trapped into lifelong agreements that never live up to the promotional build-up. That is not the result of just having a few rotten salespeople on staff, but instead is a system-wide issue for the timeshare closing business. A correction course made by the top ranks of these resort companies is necessary, and it's time they wake up to it. Until they do, many timeshare buyers will continue to struggle.
Timeshares can be expensive. Especially considering they often get sold under the impression of being a "money-saving" route for vacations. Whether it's the high price tag on the mortgage or the annual maintenance fees and assessments that increase every year, paying timeshare expenses on time is strenuous and can feel impossible for some. When unable to make payments on time, some timeshare companies waste little time in threatening to send the account to a collection agency.
Timeshare owners get pushed into taking out loans to finance these purchases and sometimes are even registered for new credit card accounts without their consent. When they learn the actual price for their timeshare and cannot afford it, they risk losing the vacation property to foreclosure. Losing a timeshare due to judicial foreclosure action of an assessment lien is also a risk of personal financial collapse since one's credit scores can be negatively impacted as a result. If only buyers knew all that beforehand.
The lack of proper disclosure notice in this industry is a huge issue. Salespeople are known to bury a lot of vital information about the true costs deep in the paperwork and try their best to keep buyers from reading it. If the information were shared openly and honestly during the sales presentations, there would undoubtedly be a significant drop in timeshare sales for many resorts. This issue also leads to inconsistency in how timeshares get represented in courts. Some states treat them the same as residential ownership, while others see it differently and use non-judicial procedures.
Since each state has different laws on dealing with timeshare properties, there is often miscommunication from the very beginning with buyers. Many states still do not mandate a transparent disclosure statement, which informs of the potential perils of their purchase. Like auto and mortgage loans, perpetual timeshare agreements should be subject to the federal conditions of the Truth in Lending Act (TILA). Without law-abiding transparency in the vacation ownership industry, timeshare businesses will continue their use of aggressive sales tactics and prey on the consumer's naivety.
There is a sliver of hope for people seeking a way out of their timeshare agreements. The first line of defense when it comes to canceling a timeshare purchase is a public offering statement. This document contains important information regarding the timeshare sales agreement.
Too often, these timeshare plan documents are deemed insignificant by salespeople because they're likely telling you false information going against what is in the paperwork. Timeshare buyers need to look over this statement diligently and swiftly after purchasing to know what their cancellation rights are.
Owners do have the right to cancel their timeshare purchases within most states. As of 2022, all but North Dakota do, though the timeshare contract may provide that right. Alas, there is a catch, just like everything else with timeshares. That is that you have to decide on canceling very quickly. After buying, there is a cooling-off period where clients can change their minds and back out, but the time is very limited. If you miss this brief window of hope, your right to cancel could cease to exist.
A timeshare rescission period is a short amount of time after a purchase that gives a buyer the chance to cancel it at no cost. As with most laws regarding timeshares, states individually govern rescission periods, so the length of them varies. Usually, the amount of time that clients have to cancel their timeshare purchase ranges between just two days and two weeks.
Mere days or weeks are not a fair amount of time for such a big financial decision for a vacation property. Most individuals and families get persuaded to buy their timeshares when they are on vacation. By the time they get home from their holiday trip, the rescission period could easily be over.
Those still within the cooling-off period can cancel their timeshare purchase by doing so through writing. Prepare a cancellation letter that includes all the specific information about the timeshare unit and then deliver it to the resort either in person or through the mail. Refer to the initial disclosure agreement and the state laws to find the specific instructions to follow when canceling your timeshare. This industry requires much more transparency as timeshares owners are constantly left in the dark about the cooling-off period, essentially locking them into a lifelong commitment.
Once the cancellation period is over, getting out of a timeshare agreement becomes ridiculously more difficult. Many owners believe that there is no way out whatsoever, and they have to deal with paying off a timeshare for the rest of their lives. What more would you expect from the people who lie to get a sale? However, there are sometimes other routes to timeshare freedom.
The first thing most folks do is seek out help from the timeshare company that sold to them. Alas, these people often walk away in even more trouble than they came in. Some resorts do offer deed-back programs, but rarely is help or information given about them. Or worse, sometimes the salespeople strike again and cripple you with a special assessment disguised as a timeshare upgrade.
The idea of renting or reselling a timeshare for-profit gets brought up a lot, but when owners attempt it, seldom do either prove to be profitable. Failed attempts to rent or sell a timeshare is the moment when most disgruntled owners realize the actual lack of value their so-called investment holds. Owners who have the impression that their timeshare was a scam will not be too thrilled about what awaits them in the secondary market.
The timeshare industry now faces a new form of corruption. That is the influx of scams in the resale market. The saying goes, 'Like attracts like," and that seems to be what is happening here.
Fraudulent people have watched and observed the deception in the timeshare industry for years, and now they have decided they want in on the action. These scammers go after troubled owners and give off the impression that they have a prospective purchaser interested and ready to buy their property. Of course, what they are saying is not valid, but this has become a rampant problem within the timeshare after-market.
Every day, more and more owners are convinced to pay hundreds or even thousands of dollars in upfront charges with the understanding that they will finally be getting out of their timeshare agreement. Then, days after the exchange of funds, these fake resellers disappear, never to be heard from again. That alone demonstrates how badly these people want out of their timeshares. It is a shame that the timeshare industry idly sits by and watches this happen to their clientele.
Federal Trade Commission now warns people about the timeshare resale market, and several states have begun enacting new laws against potential scams. However, the issue is that it is often too late to fix. The scammers have already left with the money by the time the law gets involved with the public records. If exiting a timeshare, ensure there is an escrow agent or a money-back guarantee involved.
Passing more regulations for the after-market could shatter the faulty timeshare resale industry, but it will not fix the root of the problem. It is time these resorts step in and personally defend their timeshare buyers. They are the only ones who can protect and shield them away from potential scams, as they hold the most power in the owner's decision-making. The flawed business practices of the timeshare industry opened up the gates to all of this, and only they can close them.
If you ever encounter a timeshare scam, alert the proper authorities as soon as possible to prevent future consumers from going through a similar unfortunate incident. Below are a few protections recommended by the Federal Trade Commission:
Sometimes, the only support a timeshare owner has is by way of trustworthy and respected cancellation companies, such as Wesley Financial Group, LLC ("WFG"). This timeshare exit company will put your needs first, and its only goal is to remove you from your dreadful timeshare agreement. Time to time again, the timeshare industry has proved unethical with its proceedings. WFG hopes to right all the wrongs of these resort companies until proper laws are in place to prevent them.
WFG is a timeshare exit company that cancels agreements for innocent people who were misled into purchasing. If that sounds like you, then they may be able to help you next. Call today to find out!