Billions in Timeshare Rentals Raises Some Questions

A recent timeshare industry survey found that 47% of timeshare resorts are actively using online travel agencies (OTAs) such as VRBO and AirBnB to rent out their inventory. 

Let that number sink in for a minute. Almost half of timeshare resorts rent out their inventory. A savvy consumer could easily stay in lovely timeshare resorts every single year and never have to outlay more than $21,000-the average price of an interval in the US last year. 

Several questions jump out at me from this survey:

>Exactly what inventory is being rented?  It’s impossible to trace a piece of inventory, I.e. a timeshare room to see if it’s owned by the resort or an individual owner.

>Why is the resort allowed to use third party sites such as VRBO to advertise rentals when individual owners of at least one major developer are barred from doing so?

>How much of those 12.1 million nights (!) amounting to $2.4 billion (!) in rentals came from inventory that individual owners are desperately trying to exit from?  In other words, if the owner is not using the timeshare and the developer is making tons of money renting it out, why do they make it nearly impossible for the owner to get out? 

It seems to me that the timeshare industry is at a critical tipping point. If they allow business to continue as it has for the past 40+ years and continue to let the value proposition of owning continue to be eroded, they’re in for a much bigger shake up than the financial crisis of 2008

Read This Before You Stop Paying Your Maintenance Fees

Today we’re featuring a Guest Post from Scott Montgomery regarding the dangers of not paying your timeshare maintenance fees  We think this is important because so many scam “exit companies” tell consumers to stop paying.  As a notice, nothing here is designed to provide legal advice.

Mr. Montgomery was admitted to the Bar of the State of Missouri and the Federal District Court for the Western District in 1994.  He has substantial first-chair jury trial experience and has obtained individual verdicts and judgments and settlements for his clients in excess of one million dollars. His law firm has recovered tens of millions of dollars for its clients. Access his blog at https://montgomerynewcomb.com/ 



Have you found that your maintenance fees are always increasing and that paying for your timeshare is increasingly difficult? So, what happens to you if you stop paying your timeshare fees?

Here are at least five things that can happen to you if you stop paying the fees called for in your timeshare contract, including the maintenance fees. 

And they are all bad.

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1. The resort can send you into collections and you may receive harassing phone calls, communications, and letters.

2. The resort can report you to the credit reporting agencies and ruin or damage your credit.

3. The resort can send you into foreclosure and you can lose the title to your timeshare, and get   stuck with attorney fees and costs of publication of the foreclosure notice. The foreclosure can be placed on your credit report.

4. The resort can file a lawsuit against you for breach of contract and try to recover all of the fees that are owed under the contract by executing on your assets after it obtains a judgment against you. The judgment will likely appear on your credit report android or damage your credit.

5. Not even Death cancels timeshare fees. The person that inherits your timeshare owes the fees. As a creditor, the resort can file a claim against your estate in probate court.

If you were lied to by the resort during your sales presentation, you may have the right to rescind or cancel your timeshare contract. Only a judge or arbitrator can cancel a timeshare contract without the Agreement of the resort.

If you believe that you were lied to you during your sales presentation, you may wish to contact a timeshare attorney experienced in timeshare law who can tell you whether or not you have a case for cancellation or rescission.

“The choice of a lawyer is an important decision and should not be based solely upon advertisements.”

Some Questions to Ponder

I’ve often said that the timeshare industry seems to operate in an alternate reality from other industries and as such, the “rules” that pertain to other industries seemingly don’t apply, despite the fact that reason and common sense should dictate otherwise. 

Consider these questions:

What other product do you have to pay the seller when you want to give it back, only to have them sell it again to someone else with no differentiation between new and used?

What other industry has created another industry devoted to getting the customer released from the product?  This is NOT like the used car market. 

What other industry sells a product that is clearly not a real estate interest but charges closing costs, real estate taxes and general upkeep?

What other industry markets their product not by extolling the many virtues of it through traditional advertising methods, but by bribing consumers with a product totally unrelated to the product and in any cases, a direct competitor to the product (market timeshare by dangling a cheap hotel stay)?

I believe that the timeshare industry is at a critical tipping point. Their old, outdated marketing methods as well as their product that is perpetual will not work on a younger, savvier consumer. As more inquiries are made into the industry by the media, advocates and the general population, more questions are being raised such as the ones in this post. 

The real question is which timeshare developer is going to take the important first step and change the paradigm?

Why Do The Good Guys Allow This?

Yet again, a long story from a new timeshare owner who was lied to multiple times. 

Again, I’m redacting the name of the developer as well as the names of the sales staff involved. Perhaps you’ll be able to figure out which “gem” of a developer is at fault. 

We are seniors who went to a "new member update" at the Hard Rock hotel in Stateline, Nevada. Before we went we were told that the reps in this office were really good and would help us to understand our brand new membership (1st lie). The sales rep we met with told us he didn't receive commissions but was a full-time employee of REDACTED DEVELOPER NAME working in customer relations and working for our best interests (2nd lie). He told us that previously he worked in the credit card division of a major bank (can't be sure but this is probably lie #3). He told us that when we signed our original contract we didn't get all the points we were entitled to (4th lie) and that he would make sure we got them (5th lie). He came back with a contract and said not to worry that this "duplicate" contract would just replace the old one (6th lie). He told us a duplicate deposit of $4432 was necessary for the replacement contract (7th lie and fraud) and we would get our original deposit back (8th lie). When we asked for proof that we would get our deposit back he called a "colleague" at REDACTED DEVELOPER NAME (putting him on a speaker so we could hear) who indeed "confirmed" that we would get our original deposit of $4432 back in about 2 to 3 weeks. (9th lie, as well as being totally fraudulent). He told us not to tell the REDACTED DEVELOPER NAME employee who would go through the contract with us anything as this was such a good deal she didn't want it to go through and would probably try to stop us from getting the points that we should have been entitled to in the beginning (10th lie).

We stopped signing the contract in the middle of it and asked to speak to our salesperson again. We told him our concerns about signing the contract and he reassured us that it would just replace the other one and to go ahead and sign it, that everything would be fine - lies, dammed lies too numerous to mention. He told us we could use our points to pay off our maintenance fees (lies). He gave us his phone numbers to contact him (never answered and never responded to any voice messages). So now we have two contracts, huge debt and much higher maintenance fees than we were anticipating.

We contacted the Nevada attorney generals office and spoke to a lawyer there. She told us that there was nothing that could be done - since we signed a contract and have no proof of all the lies we were told. We haven't stopped being depressed about this whole incident and find it very hard to trust anyone or anything.

I simply do not understand why these tactics are allowed in any company or any industry. If I were working for another timeshare developer I would do whatever necessary to separate my company from companies that operate in such a deceitful manner. The more stories like this that come to light, the more the industry as a whole suffers.