Thursday, May 16, 2019
As you probably know, there’s been a lot of talk lately about so-called timeshare exit companies. Major timeshare developers are filing lawsuits left and right against these companies as well as licensed law firms. Heck, I’ve even been interviewed by the CBS affiliate in Charlotte about these companies. https://www.wbtv.com/video/2019/05/13/timeshare-problems/
Timeshare developers, ARDA and ARDA-ROC have been putting out press releases about how their goal is to protect consumers from the ‘evils’ of any person, company, organization or firm that claims to assist beleaguered owners. I’ll leave the discussion about what their actual goal is for another post.
At a recent legislative workshop in Florida at least two individuals from the industry, Ken McKelvey of ARDA-ROC and Jason Gamel (who was with Wyndham at the time) of ARDA made impassioned speeches about how timeshare developers have programs to take back timeshares from owners who want out.
But that really isn’t the case, is it? If you’re a timeshare owner who wants out for whatever reason, your first course of action is not going to Google ‘timeshare exit’, is it? No. It goes something like this:
Step 1-Contact the resort where you purchased your timeshare. Chances are pretty darn good that you’ll be shuffled from department to department because there’s not really any dedicated staff at the resort to deal with these situations. You’ll either be told that you signed a contract that can’t be broken, given a number to someone at corporate or worse, invited to an “information session” where you can learn new ways to use your timeshare.
Step 2-Contact the developer where you’ll play yet another round of telephone transfer to no avail.
Step 3-Try to sell your timeshare. This is where you’ll find out one of two things. First, if it’s paid in full it’s only worth a tiny fraction of what you originally paid and the secondary market is awash with listings, many of them for under $100. More often than not, it’s not paid in full and then you discover that you can’t sell it because no one is going to buy it when there’s a balance owed.
At this point, weeks or months have gone by and you are in the same situation; you want out and out quickly before another maintenance bill hits.
Only after exhausting these options to no avail will you go online in hopes of finding an exit company.
Now, I’d be remiss if I didn’t mention that some developers have instituted some programs where they will take back their own timeshare. For a fee. If it’s paid in full. At their own discretion. If they decide to.
It’s pretty easy to see why there’s been such an increase in the number of organizations that promise to get an owner “out” of their obligation.
Are people within the industry truly that blind to what is going on? They don’t really believe their own spin, do they? The ONLY reason for the increasing number of organizations that are advertising their methods to get someone out of a timeshare is because the industry won’t let owners out.
Monday, May 6, 2019
When you purchase a timeshare, either on the primary or the secondary market, there are a number of charges that you will encounter aside from the purchase price.
Read this to understand the basic, not so basic and red flag charges you may encounter.
Standard Timeshare Fees
Regular maintenance fees cover normal wear and tear on the timeshare units and common areas, such as the pool, the clubhouse and the grounds. Most resorts have a timetable for replacing items such as televisions, bedding, kitchen appliances, etc. This timetable and more information on annual fees can usually be found in the Public Offering Statement (POS).
Real Estate Taxes
If a timeshare is in fact real estate-based, there are taxes to be paid, similar to a home or condo. Some resorts combine the annual maintenance fee and the real estate taxes into one payment, but it is a good idea to get the breakdown, as the real estate tax you pay on your timeshare may be tax deductible.
While maintenance fees are regularly occurring, special assessments are by their nature “special” or assessed on a non-regular basis. Special assessments are levied to cover costs over and above normal wear and tear and replacement of items. A typical example of when a special assessment is needed and what it covers is hurricane damage.
Exchange Company Membership/Subscriber Fees
The primary exchange companies, RCI and Interval International, charge an annual membership fee, which you need to pay in order to take advantage of any trades/exchanges. Some of the other exchange companies do not charge any annual fee.
In addition to the exchange company membership fee, there are exchange or usage fees charged in order to use your timeshare. Exchange/usage fees vary depending on if the exchange is domestic or international; made on the phone or online, or if the exchange is internal or external
Charges You May be Asked to Pay
With the exception of the “Administration Fee” which I do not like at all, these fees must be factored into the overall cost of purchasing/owing. Nearly all of them are negotiable. It pays to ask.
Title Transfer Fee
Guest Certificate from Exchange Company
$300 Marriott New Member Education Fee (covers usage and benefits)
Questions to Ask Before Purchase
Who is in charge of collection of the fees and when will they be assessed?
Who is the resort’s management company?
Who serves on the resort’s HOA board?
How much have the fees increased over the past five years?
Is there a cap to how much these fees can be raised annually?
If you don’t get full answers to these questions and are shown the answers in writing, not merely on a piece of paper, do not proceed with the purchase. This isn’t the only timeshare fir sale. You deserve better.
Tuesday, April 23, 2019
Last week I did something called Swedish Death Cleaning. Sounds morbid but it actually was very good for me both physically and psychically. The idea is to go through your possessions, in my case I focused on carefully curated papers, and get rid of whatever you don’t want or need saving someone from having to go through piles of stuff when you die in hopes of finding something important.
In my case, this resulted in over 25 pounds of paperwork being shredded and making a memory book of what I considered to be my most important professional accomplishments, timeshare and other.
I discovered something really interesting and slightly unexpected. I’ve been fortunate enough to have worked for a few timeshare resorts from 2000 to about 2006. Summer Bay, Silver Lake and Celebration World Resort spring to mind. I’ve also had the opportunity to be a featured speaker at some great conferences; The Maryland Timeshare Owners Association, The National Timeshare Owners Association, DAE’s Vacation Owners Conference, The Miami Herald Travel Show, The Adventure and Luxury Travel Show in Chicago, TATOC and CRDA.
By virtue of the fact I wrote two books and co-authored a college text, I’ve been honored with a few television appearances such as WGN and ABC in Chicago as well as CNBC.
I’ve hosted seminars for timeshare owners and prospective timeshare owners put on by both Holiday Group and RedWeek.
Lastly, there were the timeshare industry trade publications: Perspective, RCI Ventures, The Resort Trades, Sharetime and TimeSharing Today.
Trip down memory lane complete.
What I found fascinating is that up until a few years ago, my perspective on timeshare was mostly positive. What changed? Why do people in the industry view me with destain? Did I change?
No, it wasn’t me that changed. It is the industry that’s changed and not for the better. Where misleading sales pitches were once the exception, they’ve become more the norm. Where once it could be said that timeshare offered vacationers cost effective accommodations, there are increasingly more and better options available. Where once timeshare resorts offered a true value proposition, now anyone can stay on property as a renter usually for less than the cost of annual maintenance fees, to say nothing of initial purchase price. Where once the idea of willing your timeshare to your children was looked at as a positive, it’s now something to be avoided due to increasing costs and the fact that it’s devolved into nothing more than a reservation system.
And where once I held out hope that the timeshare industry would grasp the fact that consumers do not like to be sold anything but prefer to buy, I have now come to the realization that they are their own worst enemy as they stubbornly cling to the “you have to buy it today and you can’t review the contract” paradigm.
A reader recently submitted a review of a major timeshare company to the online rating site Trustpilot. While I agree with Trustpilot’s attempts to verify all submitted ratings, this exchange clearly shows bias towards the developer in my opinion.
I’ve redacted both the developer’s and the consumer’s name for obvious reasons:
My mother was talked into buying a timeshare at REDACTED NAME Vegas. She had a timeshare via another company in Arizona. She was notified it went bankrupt and that REDACTED NAME purchased her deed from them. They claimed she owned it but because it went bankrupt, there were no points to be used and she was on the hook for continued maintenance fees to REDACTED NAME for a timeshare she could NOT use for vacations. They further claimed said maintenance fees would be passed down to her children who would be just as responsible for paying money for a timeshare that could not be used.
Long story shorter, they got her to sign a contract for $35,000 plus $2000 a year in maintenance fees -- which we are told are going to increase. This took place in August of 2018.
Recently, REDACTED NAME contacted her via mail to invite her to a group meeting so owners could air their grievances and address concerns about their business. They claimed they wanted to help. When she was there, the representative she spoke with had her file and said her REDACTED NAME sales person lied to her about the points she purchased. That she wasn't a "true" silver member and was not eligible to take vacations to the places she expected to be able to go. He talked her into purchasing an additional points package for another $15,000. This happened last week. I found out the next day and went through the roof. I had her cancel the transaction via FAX (per their instruction) -- but I don't trust them. They can claim they never received the cancellation just as they can claim they never said any of the things they said to talk my mother into purchasing this property.
At NO time did any representative at this meeting bring up the issue of AIRING GRIEVANCES of ANY KIND. My mom said they proceeded to divide up the groups, separating owners so they could deal with them one on one. NO mention of the stated reason for the meeting at any point in time. This was a fishing expedition on the part of REDACTED NAME and that fishing trip turned into a hunting trip to further victimize previous victims.
This is the very definition of theft by deceit. It is in fact a white collar crime.
How is it this company has free reign to use lies and deception to sign their income away with such impunity? This is the very definition of theft by deceit. It is in fact a white collar crime. Where is law enforcement protecting and serving? WHERE IS JUSTICE?
Now, in my opinion and I’m sure your opinion, this is a well written, well thought out and honest review. Unfortunately Trustpilot did not think so and responded:
Thanks for reviewing REDACTED NAME on Trustpilot.
REDACTED NAME has reported your review because they don’t believe you’ve had a genuine buying or service experience. Reported reviews are temporarily moved offline.
We’d like to verify your experience so that we can put your review back online. Help us do that by sending documentation showing your buying or service experience with REDACTED NAME
All you need to do is:
1 Find your order confirmation, invoice, delivery report or proof of service with REDACTED NAME. The documents should show: the name of the business, the name of the buyer (your name), the date, and a reference number. See more here.
2 Send your documents by replying to this email. We accept forwarded emails from REDACTED NAME, screenshots of user registration/profile or similar, and pdf attachments.
Please don't send us any sensitive documents such as copies of passports, medical records, or bank account details. If your documentation does contain sensitive information, please be sure to redact or black out those parts before sending it to us.
When we receive your documentation, we’ll review it and get back to you. We won’t share your documentation but your reference number will be visible to the reviewed company. If you don’t want this information shared let us know and we’ll be happy to honor your request.
If we don't hear from you within 7 days, we’ll have to keep your review offline. We won’t delete it though, so if you send your valid documentation at a later stage we can reinstate it.
The consumer then provided required information and received this response:
Thank you for getting back to us and addressing your concerns. Unfortunately, we will have to keep the review offline as you didn't have an experience with REDACTED NAME you (sic) mom is the one with the experience with the company. On Trustpilot per our Guidelines (https://legal.trustpilot.com/user-guidelines) the reviewer must of had an buying and/or service experience with the company.
To which the consumer responded:
Katherine, I’m sorry, but your statement is incorrect. My mother can’t post her experiences because she is a 73 year old woman who barely knows how to deliver an email. I speak on her behalf.
I was there with my mother to witness the deceptive sales practices of this company. I was there when she signed the contract after a 7 hour convoluted marathon of game playing. I was there when the sales person distracted us while my mother signed a paper not knowing it negated everything we were told by the sales person, and, contained language protecting the company from any responsibility to what we were told by the sales person. AND I have been there every step of the way since.
Is the intent of your service to defend the rights of company who commits elder abuse? No, it is to inform the public of the practices of the company at issue. Your company is called “TRUST” pilot is it not? How can you defend keeping accurate information about this company’s deceptive practices based on a hair splitting argument like my name isn’t on the paper?
Please reconsider. This company is predatory in their practices. This is about preventing other victims. This is about to blow wide open. My intention is to prevent others from falling victim to their weaponization of contract law that I witnessed firsthand.
His review was again turned down by TrustPilot to which he responded:
Katherine, just so you know, you are denying this posting based on the letter of the rules of your service.
Every judge and first year law student knows the law is never supposed to be enforced based on the letter of its written word. It’s supposed to be enforced based on the spirit of its intent.
The same goes for the rules of your company.
The intent of the rules of your company is to prevent false reports from being posted. This is not the case here. I have provided documentation showing we had the experience with REDACTED NAME. That proves I did not simply make up this story. I wouldn’t have those papers without a firsthand encounter. You know it. I know it.
Please do the right thing here. If you were in my mothers position, you would want the same consideration. Better yet, what if it happened to your mom, and you were being denied the same way you are denying me?
It seems to me that this person’s mother was at the very least, taken advantage of by this timeshare developer. In an attempt to both vent and more importantly, warn others about this developer’s shady practices, this consumer submitted an honest review only to be turned down.
I ask the same question he did, “Where is justice?”
Thursday, April 18, 2019
I read a review yesterday for a timeshare property that was written by one of those self-proclaimed “Mommy Bloggers.” You’ve seen them, right? The travel industry in particular is falling all over themselves to provide free stuff to these moms with a keyboard who seem to think that anyone cares. I digress.
Anyway, this particular review went on and on about how wonderful this timeshare resort was and all the wonderful amenities they had. The post was filled with at least 75 photos including the macaroni and cheese that her toddler was able to get at one of the restaurants on site.
I thought I’d drop this wanna be important blogger a note. I asked her the following questions:
- Do you own at this timeshare?
- Do you own any timeshare?
- Was your stay comp’d?
Not surprisingly, she did not own a timeshare, there or anywhere and reported that her stay had been “hosted” by the resort, which of course is her way of saying she hadn’t paid for it.
Now, as upset as I am that the timeshare resort comp’d her stay in return for a glowing review, that’s not what has me livid.
What has me livid is that reviewing a timeshare resort without being an owner of any timeshare is just plain stupid. I don’t doubt for a second that this timeshare property is lovely. I’ve seen and worked at some really terrific timeshare properties.
But lovely isn’t really the point is it? How can you even begin to review a timeshare property without the benefits or drawbacks, you choose, of ownership?
It’s the same as someone reviewing Chicago as a great place to live, going on and on about the lakefront, the music festivals, the architecture and the pizza—-all great —-without mentioning that for half the year it’s overcast and oftentimes so cold you’re tempted to hibernate in bed for a few weeks.
So the next time you read a glowing review of a timeshare resort complete with photos of toddler’s hands full of macaroni and cheese, remember that more often than not, the writer has not had to deal with a 4-hour long sales pitch, a large upfront cost, nearly $1,000 in annual maintenance fees, trying to navigate a reservation system, paying upwards of $200 just to secure the reservation and of course being constantly pressured to buy more to move up to Double Secret Ruby Encrusted Status every time you check into your resort. You know, timeshare stuff.
Friday, April 12, 2019
There are some good reasons to purchase a timeshare. However, these are contracts in perpetuity for many thousands of dollars that should not be entered into lightly.
What happens when you purchase a timeshare without asking the right questions and not doing research? You decide you want out. And since you did no research getting in, you’re far more likely to fall prey to scammers who take your money and promise to get you out of your timeshare contract but do nothing but empty your bank account for many thousands of dollars.
These are NOT legitimate grounds for getting you out of your timeshare:
• You’re not using your timeshare as much as you intended to
• You’re frustrated by unexpected “special assessments” and increasing annual maintenance fees
• You can’t afford those maintenance fees and special assessments
• You find out that selling your timeshare isn’t nearly as easy as the salesperson said it would be
• You have concerns about your children inheriting your timeshare and then consequently becoming financially responsible for it
• You discover that you can’t vacation where you want, when you want
• You’re tired of going to the same place every year
• You’re aggravated with the exchange companies
• You (finally) realize that there are more ways to go on vacation that cost less than your timeshare
Don’t get me wrong; if your timeshare salesperson lied to you about any of these items, it’s wrong and they and their developers need to be dealt with appropriately and not continue to be tolerated and worse, encouraged.
What I am saying is that the old adage ‘buyer beware’ holds true. Asking the right questions and understanding what you’re buying into, which increasingly is nothing more than the ability to access a reservation system that is open to people like you that have paid tens of thousands of dollars and to Joe Average who didn’t, is a must.
Sadly, increasingly there is no value proposition for the timeshare product.
Knowing that, I have no logical explanation for the millions of people who willingly sit through one or more high pressure sales pitches each year and the thousands that buy into a system they neither understand, can afford or can use.
Monday, April 8, 2019
It looks as if Florida HB 435 will not pass as was proposed, which is a good thing in my opinion.
The bill covered many topics and many of them had to do with the so-called timeshare exit companies which have become a very lucrative business. By one estimate, one of these companies grossed over $50 million last year. That represents a lot of people who want out of their timeshare.
The industry doesn’t seem to grasp the reason these companies exist to begin with, choosing instead to focus on the harm these companies are doing to the resorts, management companies and some gullible consumers. I will admit that there is some harm being done. However, by continuing to sell and upsell contracts in perpetuity and not providing viable exit strategies themselves, this is in my opinion a problem that could have been avoided in the first place. Don’t get me started on how these exit companies obtain massive owner lists to begin with.
Mr. Ken McKelvey, who leads ARDA ROC, made the following statement: “most of the developers I know and certainly most of the timeshare managers I know, and I managed timeshare properties for thirty years… every single resort had a dissolution policy, every single (one). There was a way to get out. You had to come to your management company, and based on what the board of directors instructed us (the management company) to do in the terms if they had to pay a fee or if they had to be current, whatever those situations were, we did not have a one that did not have a dissolution policy and a hardship policy….”
If this is in fact true, my question is very simple:
Why do so many exit companies exist?