A Broken Paradigm…But Which One?

Over the weekend, I read the regular litany of complaints about high pressure timeshare sales tactics. 

Yawn. 

Don’t get me wrong…the high pressure, the misinformation, the nonsense of the ‘today only price’, the running of credit without prior approval…I’ve heard every single one of them. And it needs to stop. 

But does it really need to stop?  It’s obviously working for the developers or else they’d stop it. For all the bitching and complaining by consumers, reporters and consumer advocates; it’s still working. 

For every consumer that stands up at the end of the mandated 120 minutes, there are at least 7 that stay for who knows how long. For every consumer that does their advance homework and knows that the $20,000 timeshare the salesperson is hawking is available for $1,000 or less on the resale market. For every one person that understands the resale market, there are at least 10 that think that $20,000 is a good deal because the salesperson originally said it was $45,000. For every consumer that understands that the resort update is a sales pitch and not required, there are at least 12 that go along with the pitch the ‘concierge’ gives them. 

You’d be hard pressed to come across anybody who either hasn’t heard about these antiquated practices or personally encountered them. 

And yet every single day, timeshare sales centers around the country are filled with consumers sitting across little round tables listening to the same tired pitches. And for the past 20 or so years since I stumbled into this industry, an average of 10% of those consumers purchase something. 

So is the timeshare paradigm broken?  Not even close, buster. Not even close. You know what is broken?  The customers’ paradigm. Change that and I guarantee you the developers will change immediately. 

Some Good News…And Some Questions

Earlier this month, North Carolina became the first state to regulate self-proclaimed timeshare exit companies. A few of the key provisions are:

Timeshare exit companies may not advise or suggest timeshare owners to cease making payments on their timeshare obligations

Timeshare exit company contracts must provide timeshare owners with a right of rescission

Timeshare exit companies cannot charge timeshare owners for a transfer or exit service that amounts to foreclosure or repossession

Timeshare exit companies are not entitled to a fee for a transfer or exit service if the timeshare owner procures their own transfer or exit

Written evidence of the transfer or exit must be provided and include the method of transfer or termination, along with legal documents

Timeshare exit companies must escrow the fee charged to timeshare owners

While this is certainly a step in the right direction, I can’t help but think this would be unnecessary if there was a legal provision in place that mandated that every…every…timeshare developer have an exit option for every…every…paid in full timeshare interest.

No more hiding behind the “you didn’t purchase it directly from us” excuse. No more telling media outlets that there’s an exit option when depending on the time of day, there’s a ton of exclusions. No more “here’s the number of a reseller” when an owner calls and wants to be released. 

And the exit option has to be either free or a reasonable amount. What’s a reasonable amount?  No more than one year of current maintenance fees. 

Several questions spring to mind about this. 

>Why has this taken so long?  

>Why was one of the leading timeshare law firms working on this with the North Carolina Real Estate Commission and not ARDA-ROC?

>Why hasn’t the North Carolina Real Estate Commission looked into promises made by the timeshare developers at the point of sale as well?  Namely charging consumers upfront for a product/service that will not be available until well after rescission?  

However, it’s Friday. Let’s end the week on a positive note. This is a good thing for timeshare owners. 

Way Too Little…Way Too Late

Several days ago, I saw a tweet from Responsible Exit…the consortium of a handful of timeshare developers who claim…I say ‘claim’ because I’ve heard both good and bad reviews…to provide a way out for owners…saying “Want to exit your timeshare? Maybe you should consider learning how to best take advantage of the benefits available as an owner. ⁣⁣Contact your developer to learn more about how to get the most out of your ownership.”

I almost spit out my iced tea. 

“Maybe you should consider learning how to take advantage of the benefits available as an owner”?  Seriously?  And then suggesting that the beleaguered owner contact the developer?!?  Are you kidding me?

The same developers who disguise their never ending sales pitches as “information sessions”?  The same developers whose only answer to frustrated owners is to buy more?  The same developers who routinely employ salespeople whose knowledge of the timeshare industry consists of nothing more than what management wants them to know?

Now, there are some developers who do provide owners with some continuing education.  They are to be commended. I recently saw that both Wyndham and Marriott were offering some virtual sessions and of course, DVC is way ahead of other developers. 

But the vast majority of developers collect their money, shove new owners out the door with some phone numbers, a link to their website and some paperwork and then continually try to get them to buy more so that the owners will be able to do what they were initially told their timeshare would get them. 

After years of not getting adequate information, after years of rising maintenance fees and after years of being lured by the unscrupulous self-appointed exit companies; NOW the developers want owners to come to them to learn all about the many benefits of ownership and how get the most out of their timeshare?

Way too little…way too late.