October 14, 2022 • By Dennis Beaver
If you own a timeshare or, God forbid, are considering buying one, I have one word of advice that has made the timeshare industry mad at me following my April 2021 article quoting Salem, Oregon, attorney Eric Olsen.
Replying to my question, “What do you risk by not paying the timeshare maintenance fee or for the timeshare itself?” Olsen stated, “I can’t recall a single instance where a client was ever sued. Timeshare companies never sue.”
When that story ran, I got a call from a woman claiming to be in management with a timeshare developer in Las Vegas. It was a warning. “Mr. Beaver, we don’t appreciate what you are revealing about how we deal with people who don’t pay. Be careful.”
My one word of advice?
Don’t! Don’t ever sign one of these hideous, non-cancelable contracts that require you to make maintenance payments forever for something that you may never be able to use because of the way it was sold to you, or get out of even if sick and unable to travel.
Reminds me of Racketeering
The timeshare monstrosity has torn families apart, driven people into poverty and led to suicides. And if anyone thinks that I am exaggerating, just ask St. Petersburg, Florida-based attorney Mike Finn of the Finn Law Group, a consumer advocacy firm that focuses a considerable portion of its practice on assisting timeshare owners.
Mike’s description of the way in which the timeshare industry deals with its customers today, reminds me of racketeering.
And, if you bought one in the islands, hang on to your life preserver!
Buy in the islands and get sued
“Island destinations have been a popular venue to stick timeshare buyers with contracts that come with a little extra,” Finn notes, adding, “that about 15 years ago smaller island resorts began to sue people who:
(1) Put the purchase on their credit card but then canceled in a timely manner, and;
(2) Those who stopped making their yearly maintenance payments.
“The developers filed suits in island courts, obtained default judgments, transferred them to where the people resided and hired collection agencies in their home communities.
“But the real declaration of war on timeshare owners and exit companies began when law firms began assisting people attempting to terminate their timeshare purchase contact after their requests to the developers were ignored.
“In my judgment, the developers were attempting to cause a disruption between those timeshare holders and the third party exit company. It should be noted that the timeshare industry has always had the ability to pursue court action against all time share owners, since every one of them signed a promissory note and many signed mortgage notes.
“However, this was a weapon aimed more at anyone trying to provide assistance to owners rather than against these owners themselves.
“Since COVID, the timeshare industry is pursuing owners, presumably because their cash flow has been impacted due to the pandemic.
“The most important takeaway is that no one is safe!”
The Underlying Problem – You are a Cash Cow
So, why don’t the developers just let people out of the contract – especially those who can’t travel, are ill, or just don’t want it anymore? They could take it back, resell it, having nothing to lose and keep all the money paid thus far?
“Because it is a cash cow! Unlike a car you buy that you can sell later, you bought a timeshare and have no control over it! The developer thinks, ‘I will get maintenance fees from you – currently $2,000 yearly on average – and make it very hard for you to get rid of it. I may or may not take it back. I have total control over you. And then I may sue your pants off, even though I am going to sell it to someone else and get my purchase price back!’
“There is no other product in the world that can do this to you! None!”
You are Buying Nothing!
At one time, when you bought a time share you actually got a week – you owned that week.
Finn points out that, “About 18 years ago, they changed the business plan. They offered a right to use – rather than sell a unit that you owned – you bought points usable at any resort. Sounds great, right? Gives you flexibility.
“Your contract required using their reservation system, but they did not tell the buyers they were competing, not only with other points owners, but with the public!
So, when you buy a time share you are not buying anything! You are buying the right to attempt to make a reservation!
“The resort could easily be totally booked by members of the public using the same reservation system. ‘So I have to book one year out? What! I don’t know what I am doing in a year! This is plain crazy!”
“You are not told any of this. So, you buy the time share, try to book something and can’t, get frustrated and want out! This is the reason so many people have flocked to exit companies,” Finn notes.
Next Week: If you still want to buy a timeshare, what you need to know.
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.