9 Shocking Secrets The Timeshare Industry Does Not Want Consumers To Know

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The timeshare industry continues to grow  - regardless

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Nobody wakes up one morning and decides to buy a timeshare, but a growing number of consumers spend an average of $21,000 to contribute to this multi-billion-dollar industry.

Timeshare purchases occur every day somewhere in the world: North America, Europe, Central and South America, Mexico, Caribbean Islands and Asia.

Many clueless consumers are lured into taking a timeshare sales presentation by mail marketing campaigns, on the phone, or while on vacation. They buy them in the city, on beach fronts, in ski resorts, in theme parks and now on cruise ships.

Consumers buy primarily for two reasons: Firstly, it is due to the alluring gifts offered by the developers. Timeshare resorts have been offering discounted accommodations (called minivacs) in exchange for travelers or vacationers to attend a timeshare presentation. This tactic converts into a high percentage of new owners.

Secondly, it is because of the sales and marketing staff. They are trained to gain the potential clients’ trust, identify their dominant buying motives, and present an offer that makes financial sense. The industry’s motto is “sell on emotion, and close on logic,” and it works.

In the United States alone, the timeshare industry continues to skyrocket despite the negative image it has earned over the years.

However, the demographics of the market have changed substantially in the last 20 years. Timeshares were generally purchased by the elderly or the nearly retired. Now, the industry is attracting younger families with higher incomes and more ethnic groups.

Despite this growth in the timeshare industry, many timeshare owners later regret their decisions and are paying emotionally and financially for this on the spot purchase.

Like any other industry, there are shocking secrets within the timeshare community that consumers are not supposed to know to protect the profits of the companies and the industry. There would be legal ramifications if consumers knew what really goes on.

Here are 9 shocking secrets of the timeshare industry that consumers should know about before they buy, sell or dispose of their unwanted timeshares.

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1. Many Timeshare Companies Do Not Own Properties

That's right. Many timeshare companies do not own the resorts where they sell their timeshares. They are owned by separate corporations and simply have an agreement with the timeshare companies to use some their rooms.

When the members try to use their timeshares through the resort network or the exchange company, many find it very difficult because the timeshare has a limited inventory at that property. Consequently, there are a plethora of online complaints toward the company because there is no availability where and when owners want to vacation.

In the case of AM Resorts (SECRETS, ZOETRY, DREAMS, BREATHLESS, NOW and SUNSCAPE) Resorts in Mexico, the Dominican Republic and Jamaica, they are a collection by AmResorts. The company that sells the timeshare is Unlimited Vacation Club, a travel club, and they do not own any of the resorts. Consumers who purchase a UVC membership at these resorts are buying nothing more than an overpriced travel club membership that costs between $10,000 to $80,000.

According to the contracts, the legal entity for Unlimited Vacation Club is in Panama. Although it is a Florida based company, travel club members who want to mediate any legal action against the company must go to Panama.

Similarly, Prestige Travelers at Karisma Resorts and TravelSmart Travel Club, a part of the Sunwing Travel Group in Canada also do not own any of the resorts. 

2. 85% of all Buyers Regret Their Purchase (For Money, Fear, Confusion, Intimidation, Distrust and Other Reasons)

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According to Dr. Amy Gregory, assistant professor at the University of Florida who has been studying the impact of buyer regret and remorse and rescission decisions, many timeshare buyers regret their decisions. “A whopping 85 percent of all buyers regret their purchase (for money, fear, confusion, intimidation, distrust and other reasons).” 

The article mentions that 15% of timeshare buyers rescind and is a norm for the industry, according to Jeff Weir of Redweek, a timeshare users forum, and Dr. Gregory.  Although Dr. Gregory’s research includes “interfering information” that causes purchasers to cancel during this period, she doesn’t mention the internal tricks that resorts use to prevent people from cancelling.

When guests express a desire to cancel, the manager or closer involved in the sale will attempt to talk them out of it. This attempt could involve lowering the purchase price, offering more gifts, reminding them of the dominant reasons they purchased, or lying to prevent them from cancelling during the rescission period. For many, this conversation could be intimidating and embarrassing for many new purchasers who befriended the sales persons involved. 

3. Timeshare Attorneys and Relief Companies are Generating Millions of Dollars Off Timeshare Owners Who Can Easily Do the Work Themselves for Free

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Timeshare attorneys and timeshare relief companies are generating millions of dollars in profits by helping timeshare owners get out of their unwanted timeshares. They use a variety of methods which begins with contacting the resort to initiate the process.

What most timeshare owners do not realize is that they can do the work themselves without paying anyone. In some cases, they can simply walk away without any repercussions because, in many cases, they do not own anything.

However, these savvy cancellation companies have popped up overnight and are generating millions of dollars in profits.

One timeshare attorney boasts that he has helped over 6,000 timeshare owners to dispose of their timeshare with a 99% success rate and charges an average of $3,900 per client. So, 6,000 X $3,900 = $23 million.

Although successful, the timeshare owners could have saved themselves the $3,900 and did it themselves by negotiating with the resort to transfer the property back with a warranty deed. This is the legal procedure that many timeshare attorneys use to transfer the timeshare back to the resort.

Timeshare attorneys and timeshare relief companies are so successful that the timeshare resorts have filed lawsuits against them because members are getting out of their timeshares through these companies.

One company, Mexico Timeshare Solutions, present themselves as a timeshare advocate and calls other cancellation companies scams. What their clients do not realize is that they are scamming clients into believing that they need their assistance to get rid of Mexico timeshares when the clients can simply walk away without paying anything. Mexico timeshares are simply travel clubs, and companies cannot do anything to foreigners should they desire to simply walk away.  This is how Mexico Timeshare Solutions guarantees their services.

Once the rescission period is over, the purchaser has lost their original deposit and would be liable for full payment. The sales person is usually not concerned about the customer service once the sales is completed. 

Timeshare attorneys and timeshare relief companies are successful in getting frustrated timeshare owners out of their unwanted timeshares regardless of whether it is paid off or not.

4. Many Travel Club Members Cannot Use Their Own Membership Because the Resort has Been Sold Out – Some, Many Times Over

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Many travel club members purchased because they wanted to travel around the world and explore new places and cultures. They will attempt to make reservations within their own resort system or use one of two of the largest timeshare exchange companies in the world, Resorts Condominiums International (RCI) or Interval International (I.I.).

One of the reasons why so many members want to dispose their timeshare is because they cannot exchange where they want to go. The primary reason why many can't exchange is because the travel club’s inventory has been oversold. With the points system, the resorts can sell as many points as they like.

According to a law suit filed against ILX Resorts. they oversold their inventory at the Los Abrigados Resort and Spa in Sedona, Arizona and that is why the owners could never get in. This is a timeshare, not a travel club.

Another lawsuit was recently filed against Diamond Resorts based in Las Vegas for securities fraud. The suit alleges that the resorts sell points that are not registered with the Securities and Exchange commission. Apparently, they are involved in a one billion-dollar lawsuit which accuses the company, and many of its affiliates of unfairly targeting the elderly.

Too often, resorts that sell a points system can easily oversell the inventory if the points are not directly attached to a deed.

Moreover, there are many resorts that simply have no inventory for their members because they prefer to use the rooms to market more guests to the timeshare presentations. This was the case with The Manhattan Club which resulted in a class action law suit by its members.

The points system and the right to use system are created for the advantage of the developers, not the consumers. They can sell as much as they like with little, if any, accountability. 

5. Many Timeshare Sales Managers Expect or Require Their Sales People to Lie, or They Get Fired

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Many timeshare companies have a reputation for being dishonest, which is why there are so many lawsuits against them and so many disgruntled owners.

What consumers do not realize is that lying is expected in many resorts and required in other resorts. There are many lies within the industry that if the sales person does not present, he will not get the support of the management during the sales process.

The sales process is a team effort and requires the support of management to use a variety of sales strategies called such as “playhouse” to get the sale. Most often, if the sales person doesn’t lie and his sales figures are not where the company wants them to be, the sales person will either be blackballed or fired.

All resorts have daily, monthly and annual goals that they must hit - at any costs.

When Timeshare Owners Trade in Their Old Timeshares for One at the Resort, They Give Them Zero Trade In

When an existing timeshare owner attends a timeshare presentation, they have the option of trading in their old timeshare for a new one.

The resort will offer a reduction in the price if the owner will trade in their old paid-in-full timeshare. In some cases, they will offer tens of thousands for their old timeshare.

This is an old sales tactic used in the industry to make a sale. The closer will originally present a much higher price for the timeshare to make room for this "trade in."

In the end, the timeshare owner simply traded in one timeshare for another and paid the same price as those who didn't trade in a timeshare. TIMESHARE COMPANIES NEVER GIVE TIMESHARE OWNERS ANYTHING FOR THEIR OLD TIMESHARE. 

6. Most New Timeshare Owners Sign Legal Documents Without Ever Reading What They Have Signed For

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After what was supposed to be a 90-minute sales presentation becomes a 4 to 6-hour arduous ordeal, consumers will give in and decide to make a purchase. Once they fill out the initial paperwork, they are emotionally drained and just want to leave.

However, it might take an additional 30 minutes or more for the final paperwork to arrive, especially when there are a lot of sales in the room. When the paperwork finally arrives, most new owners sign the paperwork without thoroughly reading it.

A resort chain in the Dominican Republic states in their 36-page agreement that if the owner shares any negative remarks or comments online about their experiences with the resort, the resort will cancel their membership. This is something that the new owners unknowingly agree to when signing the paperwork.

Many will also overlook the right of rescission period; the time allowed for the purchaser to legally cancel the sale and get a full refund. Sales persons are trained to prevent rescissions during this period. 

7. When New Timeshare Owners Receive Free Accommodations and Gifts as an Incentive For Purchasing That Same Day, They Were Already Included in the Purchase Price and the Closing Costs

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When the guests decide to purchase the timeshare, the resorts will list the closing costs in addition to the purchase price. It will not be listed as part of the purchase price, but added to the down payment.

For example, if the purchase price is $18,000, the down payment is 35% or $6,300. The closing costs will be an additional cost and could be as high as $2,000. Hence, your down payment could be $8,300.

The resort will use the closing costs to pay for the documents, the new owner’s kit or packet, the exchange company enrollment, and any gifts that are offered as part of the deal. The remainder is often split amongst the sales staff involved in the sale.

For example, if the resort offers the new owners a free stay at the resort or other valuable gifts, they were already included in the purchase price or the closing costs. They are never free as they are presented. 

8. Consumers Can Purchase a Timeshare for a Fraction of What It Costs at the Resort

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Consumers who are serious about purchasing a timeshare should never purchase at a resort because they can buy the same timeshare for the same property at a fraction of the cost.

Resorts are charging exorbitant prices for a timeshare when consumers can quickly go online at the many timeshare resale sites and get it for much less.

While some resorts charge between $10,000-$20,000 for a timeshare, consumers can go online and purchase them for 10% of those prices.

Purchasing online also gives the consumer time to do the research and learn everything about the timeshare before making a purchase. There is nothing worse than making an expensive purchase at a high-pressure sales presentation and later regretting it. By purchasing online, one has the time to conduct their due diligence and pay considerably less.

When a consumer purchases a timeshare online, they will receive the same benefits unless otherwise documented in the paperwork. Read everything before you buy. 

9. Consumers Who Purchase a Travel Club Membership at an All-Inclusive Resort Pay More Than the General Public

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Most Mexican and many Caribbean travel club properties are mandatory all-inclusive resorts that include meals, beverages and some non-motorized activities.

This is an attractive feature for many consumers in some areas who would rather avoid searching for local establishments to eat and drink. With the all-inclusive option, they can eat and drink as much as they like without additional charges.

Many travel clubs operate within these resorts, although many don't own the resort.

When prospects attend a sales presentation, they are told that they will get a discount when they stay at any of the company’s affiliate resorts. Some are even told that the timeshare will guarantee discounted airfares during their membership. This is an outright lie.

For example, if the guest bought a membership from the Unlimited Vacation Club that operates out of the Secrets Resorts, they can stay at any of the Secrets Resorts and get a discount on the mandatory all-inclusive options without paying a maintenance fee.

What the owners don't realize is that they are paying the same or more for the all-inclusive than the general public is paying. When you add up the purchase price for the timeshare, and the nightly costs for the mandatory all-inclusive, they are paying much more than they can get on any travel site.

Many owners have gone online and discovered deals at the same resorts for a much cheaper price than what their timeshare offers.

Sadly, these companies use effective marketing strategies that include scare tactics to convince consumers to hand over their credit cards to pay for something they can easily do themselves as is the case with Mexican Timeshare Solutions.



Know Before You Go on a Timeshare Presentation

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Before attending a timeshare presentation anywhere, know before you go. Research the resort, the reviews and the resale costs to learn all you can about the resort that has invited you.

If you want to complete your sales presentation in 90 minutes or less with your gifts, present them a copy of the resale and the negative reviews. They will usually get you out so that they can talk to a more willing prospect.

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