As a consumer protection company, we’re here to set the record straight on timeshares, a highly unregulated industry that has become drastically outdated since it began in the ‘70s.
Many timeshare companies have employed questionable tactics that affect consumers adversely – both financially and emotionally. We feel it’s our duty to warn consumers and call for change, which is why we are actively meeting with legislators and Attorney Generals all over the country.
While we’ve heard countless ways timeshare resorts have deceived consumers over the years, there are three main issues when it comes to questionable practices. Perpetuity clauses, positioning timeshare ownership as an “investment”, and maintenance fees.
As a steadfast partner in your timeshare journey, we want to talk about why these three things need to change in order to return financial control to consumers.
Inheritance decisions are written right into contracts: Perpetuity clauses are one of the sneakiest tactics timeshare sellers use to secure long-term revenue streams. Since the majority of timeshares are owned by baby boomers, the industry fears for its future stability and relevance with younger demographics.
Knowing this risk, many sellers include perpetuity clauses in their contracts, which automatically transfers timeshare ownership to the purchaser’s next of kin when they pass. In fact, 74 percent of all timeshares are sold for life and beyond through perpetuity. This is often unbeknownst to the inheritor, and if they are aware, they often assume all the bills have already been paid off and they’ll get to reap its benefits with no strings attached – only to find out this is simply not true. Consumers should know that their contract can be involuntarily reassigned to their next of kin, who will then be required to take on all of its financial burden.
Timeshare are not actually investments: A popular tactic that timeshare sellers employ during a pitch is convincing the person that owning a timeshare is an investment, one that will generate a profit for the owner if they decide to sell it. This couldn’t be further from the truth. Buyers should think of timeshares more like a new car, not a house, meaning its value will decrease over time. In fact, many prospective buyers are unaware that the sale price of their timeshare was hiked up to begin with to cover unrelated costs such as sales presentations, incentives and giveaways.
Just take the secondary market as an example of how timeshares depreciate in value – owners often sell their properties for a fraction of their purchase price on sites like eBay, Craigslist and RedWeek to escape ongoing maintenance fees, which brings us to our next point.
Maintenance Fees Aren’t Always Maintenance Fees: Did you know that maintenance fees average $980 per year for the average owner? What’s worse is that a portion of this amount is not even being put toward maintenance-related causes. Instead, that fee is being used for other industry initiatives that work against consumers, such as legal fees and lobbying costs for pro timeshare objectives.
Because the fee is a relatively small cost, timeshare owners usually pay it without knowing how it’s being spent – which ultimately enables the industry to rack up millions for lobbying.
While there are a multitude of other ways the timeshare industry falsely portrays itself, your partners at Timeshare Exit Team strongly believe that these three are the most detrimental to consumers, as they all have the potential to cost buyers thousands more than what their timeshare property is worth over the years. The timeshare industry has failed to impose any kind of protection for loyal customers.
This is why we are calling for action.
–Brandon Reed, CEO at Timeshare Exit Team