It’s The End Of The Year…Onward!

 For my last post this year I present you with the latest communication piece that I co-wrote with ARDA, the trade association representing this timeshare industry  

My detractors on one side will yell and scream and wring their hands saying that I’m a sell out and that I’m no longer a consumer advocate but a mouthpiece for the timeshare industry. 

My detractors on the other side will yell and scream and wring their hands saying that they’re pure as the driven snow and claim that the consumer is to blame for all misunderstandings. 

They’re both wrong. I have maintained from the start that I don’t feel one side is right and one side is wrong. There’s enough bad behavior on both sides. I also don’t feel that timeshare is a win/lose proposition. I think at its essence, it’s a great product for the right people. 

And while I feel strongly that the industry could do a much better job of taking care of owners who, for one reason or another are done with their timeshare, I think we can all agree that the cottage industry of scammers taking advantage of those owners needs to be shut down. 

Step one is letting consumers know the truth about contracts, those scam companies and what they can do to avoid getting scammed. 

So, here’s the piece that I’m proud to have cowritten with ARDA:

https://www.arda.org/4-things-understand-about-exiting-your-timeshare-contract

Here’s to a better new year for everyone. 

Peace. 

Trust

 

Today a few words about trust when it comes to timeshare issues. And I’m not talking about legal trusts here. 

I recently saw a social media post that said in part that consumers trust timeshare salespeople because they, the salespeople, establish themselves as the experts. True. That’s one of the signs of a competent salesperson. 

The post went on about other so-called authorities or experts such as doctors or auto mechanics and stated that consumers don’t question them as they’re the experts. 

Whoa. You don’t question doctors or mechanics?  Really?  How about the salesperson at a boutique who tells you that you look positively adorable in that $500 dress?  Do you take them at their word because they’re an expert at fashion?

Way back in the Dark Ages when I was selling timeshare, I was stunned whenever the customer handed over a credit card for a $15,000 or $20,000 timeshare based on what I said during a 3 hour pitch. Granted, this is one of the major reasons behind my leaving that profession. I was trained to show the customer that the timeshare would be less costly than staying in a hotel for 10 years on vacation by using an inflation factor that we simply pulled out of a hat. You’d think that all or at least most people would at the very least, check my math. Very few ever did. Believe me, I’m not an expert at hotel costs or math, yet people didn’t question it. I wasn’t lying, but I certainly wasn’t an expert. 

Maybe it’s me. Maybe I’m leery about all salespeople. Maybe whenever something is going to cost me more than $50 I take a breath and look at all the information I can get my hands on and look for alternatives. 

I feel compelled again to say that I don’t condone lying or hiding of pertinent facts in timeshare sales. That’s not what this is about. However far too many timeshare owners are bantering terms like scam, extortion and coercion while accepting zero responsibility for plopping down $20,000 for a very complex purchase in perpetuity. 

Trust needs to be earned. Some random dude with a name tag that identifies them as a ‘Vacation Counselor’ doesn’t immediately earn my trust. Why would they have yours?

A Lesson On Listening And Acting

I’ve never used AirBnB, but I know they started out to be a disruptor to the hotel and to a lesser extent, the timeshare industry. I also know that they’ve had some significant pushback from consumers and hosts alike. 

Here’s a series of tweets from Brian Chesky of AirBnB. I’m not saying that this is a better alternative to timeshare because people have different needs, budgets and expectations. I am however saying that addressing the issues in this manner is commendable. 

“I’ve heard you loud and clear—you feel like prices aren’t transparent and checkout tasks are a pain. That’s why we’re making 4 changes: 

1. Starting next month, you’ll be able to see the total price you're paying up front.

When you turn this on, you’ll see the total price (before taxes) in search results, as well as on the map, price filter, and listing page. You can also view a full price breakdown with Airbnb’s service fee, discounts, and taxes.

2. We are prioritizing total price (instead of nightly price) in our search ranking algorithm. The highest quality homes with the best total prices will rank higher in search results.

We started as an affordable alternative to hotels, and affordability is especially important today. During this difficult economic time, we need to help our Hosts provide great value to you.

3. To enable Hosts to set more competitive prices, we’ll be launching new pricing and discount tools. Hosts told us they’d like our help to better understand the final price guests pay and what price to charge to stay competitive.

4. You shouldn’t have to do unreasonable checkout tasks, such as stripping the beds, doing the laundry, or vacuuming. But we think it’s reasonable to turn off the lights, throw food in the trash, and lock the doors—just as you would when leaving your own home.

If Hosts have checkout requests, they should be reasonable and shown to you before you book.

Thank you for all the feedback. We will never stop improving Airbnb.”

There’s a lesson that the timeshare industry would be wise to learn from. The question is…will it?

Ch…Ch…Ch…Changes

With apologies to David Bowie, today I’m going to say something about changes. In particular, the ability of the developer to institute oftentimes major changes to the contract between you and them. 

You may think that changes are not allowed. You’d be wrong. Well, partially wrong. You can’t make changes. They can. That’s called unilateral change. One party can and the other can not. 

What changes can the developers make?  Where to begin!  Perhaps you purchased at a resort that was one of several properties owned by Developer X. 7 years down the road, Developer X is acquired by Developer Z. For whatever reason, you don’t like Developer Z’s business practices. Can you have your contact dissolved?  No, you can not. 

We’re not talking about fees here by the way, which the developer has the right to increase as they see fit. Guest Certificates which used to be $49 are now $89. The ability to split a week into a 3-night stay and a 4-night stay which used to be no cost is now $70! These are 2 small examples of why it’s imperative to ask the right questions concerning fees before purchasing. (For more questions to ask, I’ve identified 19 Questions To Ask Before Purchasing A Timeshare, available for only $18.99)

So, the developer can institute unilateral changes while you, do not have that right. 

You can not decide to change how much or even when you pay. You can not wake up one morning and decide to give your timeshare interest to another person because the developer may block you from doing so. You can’t say you don’t want the timeshare any longer because you used to be able to use it towards a particular cruise but now you can’t because the developer and the cruise line parted ways. Well, technically you can say you don’t want it any more, but saying it means nothing. 

None of this is meant to dissuade anyone from purchasing a timeshare. I’m just pointing out the obvious one sided nature of the contract. Yet another reason to not purchase a timeshare on a whim. 

Cognitive Bias or Something Else?

I read an interesting article over the weekend about cognitive biases that consumers have. The article rightly pointed out that “users filter out a lot of the information they receive, even when it could be important.”

This is obviously true when it comes to purchasing a timeshare for reasons we’ve often discussed here on the blog. However, it’s even more true when it comes to owners wanting to get out of a timeshare. 

Among the biases that illustrate this are:

Confirmation Bias

People look for evidence that confirms what they already think. People tend to search for, interpret, prefer, and recall information in a way that reinforces their personal beliefs or hypotheses. 

Banner Blindness

Users tune out the stuff they get repeatedly exposed to. 

You can read the entire article here:

https://growth.design/psychology#banner-blindness

Banner blindness really stood out to me because no matter how many times I, and other people looking out for timeshare owners’ best interests, state categorically:

a) to avoid any company or entity that initiates contact

b) not to do business with anyone wanting an upfront payment

c) the value of the timeshare is a tiny fraction of the purchase price

d) getting out of a contract, particularly when there’s an amount owed should be handled by a qualified attorney as it’s a legal contract

inevitably I’ll receive emails or read social media posts saying “Yes, but what about Company X?”

They acknowledge that they’re aware of the countless warnings but still think that the mysterious Company X is the answer to their timeshare problems despite the fact they were contacted out of the blue by Company X wanting an upfront fee, claiming that they had a buyer for the timeshare for $75,000 and/or there’s no attorney involved or needed. 

I’m stymied. I’m frustrated. Maybe if all the people, myself included, take a break from warning people common sense will kick in. 

Or maybe not. Frustration makes people do strange things. 

What say you?

A Bundle of Rights or A Smattering of Maybes?

Back in the Dark Ages of the early 2000s when I was fresh faced and completely ignorant of the vast amount of timeshare knowledge that was necessary to fully understand it, we salespeople talked a lot about the “full bundle of rights” that came with the timeshare. 

To refresh your memory, those rights were: use, exchange, rent, sell and will. In my defense, the landscape of timeshare ownership was considerably different than it is now. 

I recently had the opportunity to both sit in on a sales pitch in person as well as view a training video where these rights were still being pitched. 

However, I recently came across this section of a contract of a major developer:

 “The developer has limited your resale rights. Any future purchaser who buys this timeshare interest from you (other than a transfer as the result of a death, divorce or to an immediate family member) will have severely limited opportunity to reserve occupancy in this timeshare plan.”

There’s another developer who requires the secondary purchaser to purchase points directly from them in order to use the points fully. And not just a few points; half of the points in the secondary purchase. In simple terms if you purchase 10,000 points on the secondary market, the developer requires you to purchase 5,000 points directly from them in order to use the full exchange privileges. Adding insult to injury, this developer also restricts the original owner from using public sites to advertise the timeshare for sale. 

While a number of developers have a program in place to take back fully paid timeshares, even though many of them charge a fee to do this, some of these developers don’t offer this option for secondary purchases. I’ve yet to understand this-it’s their own product which they can turn around and sell for double or triple what the original purchaser paid-but they shut the door. 

All of which got me thinking that the so-called full bundle of rights had been diminished to more resemble a smattering of maybes.

Maybe you’ll be able to use it if you can figure out the often labyrinth like reservation system. 

Maybe you can exchange it if you plan 11-12 months out and aren’t too picky about where you vacation. 

Maybe you can rent it if you price it lower than the $399 the developer is advertising a week for. 

Maybe you can sell it if it’s paid in full and you don’t expect much more than $1,000 for it even though you paid $17,000 plus 10 years of maintenance fees. 

And maybe you can will it provided you can find someone to take it from you.

Look, I understand the developers’ need to preserve primary market purchases.  How about instead of taking benefits away from anyone who didn’t purchase directly, they add benefits to those who do?

Vacations are meant to be fun. Timeshare needs to get back to fun. 

Dynamic Pricing? More Like Pull A Number Out Of A Hat Pricing

If, like me, you attempted to/were able to purchase tickets for Bruce Springsteen and the E Street Band’s US tour next spring; you’re undoubtedly aware of the horrendous dynamic pricing structure that TicketMaster was implementing. This dynamic pricing structure resulted in nosebleed seats going for more than $1,000 and standing room only floor access going for more than $5,000 in some arenas. 

It’s been a public relations nightmare for Bruce and his management who went along and even justified this to the dismay of many long time fans. 

This dynamic pricing structure is very similar to the pricing structure in place by both many/most timeshare developers and the nefarious self-proclaimed exit companies. 

As I’ve written about previously, there’s no MSRP for a timeshare. Disney Vacation Club is the outlier in the industry, as their prices are easily discoverable and oftentimes readily posted on social media sites. 

Consumers have no way to compare prices between developers even in the same location, or even between different owners in the same resort. 

That’s because the sales personnel are trained to quote an often insanely high price after which the drawn out negotiations begin. The consumer may think they’re getting a deal, when in truth, they’re paying some arbitrary amount based in large part on what the sales person/sales manager thinks they can afford. This was the procedure way back in 2000 and as I’ve discussed in previous posts, still common practice today. 

While John and Mary might end up paying $20,000 for 100 points at XYZ Resort, Rodger and Janice might end up paying $22,500 for the exact same thing. Rodger and Janice will never know this unless they run into John and Mary at the pool and strike up a conversation. Then again, John and Mary might be disappointed to learn that Tim and Nancy were able to negotiate their purchase price down to $17,350!

The entire process is opaque and puts consumers at a disadvantage. 

Not surprisingly, the nefarious self-program claimed exit industry operates the same way. Not surprisingly because most of those employed in the exit industry either got their start in the timeshare industry or carefully studied the playbook. 

Take for example the following actual amounts paid to one of those exit companies that’s currently in litigation with a major timeshare developer:

$5,367

$10,950

$20,000

$8,501

$8,100

$25,300

$7,180

$7,500

$5,910

$7,992

$9,147

These are all actual fees charged to “exit” owners from the same developer!  Seems arbitrary, huh?  Worse yet is that NONE of these consumers were able to get out of their timeshare. 

Compare those prices to what an attorney will charge. I spoke with attorney Andrew Meyer of The Finn Law Group in Florida who told me that his firm “charges a fixed fee that could be as low as $3,750 or higher depending on the complexity of the matter and if the consumer has more than one timeshare. In any event, the fee is agreed upon before any contract is signed so there are no surprises.”  Unlike the scammy exit companies, this firm actually does something for the money which more often than not results in a positive outcome for the owner. 

The moral of all this is that the consumer is almost always in a losing situation when it comes to pricing in the timeshare industry and the cottage industries that have sprung up around it. 

All the more reason to not make impulsive decisions when buying a timeshare, engaging with a company that claims to get you out of a timeshare or sadly, purchasing concert tickets. 

See you in the nosebleed seats at The Amway Arena in February.