The Most Common Timeshare Complaints and How Consumers Are Fighting Back - And Winning

timeshare complaints

Abundance of timeshares for sale

There are thousands of timeshares for sale all over the world. Timeshare owners may want to sell their timeshare for a variety of reasons. Many timeshares are offered online for as little as $.077.  That’s right. You can buy a timeshare today that cost a timeshare buyer thousands of dollars for under a dollar.

Timeshares bought on the secondary market may have a reduction or elimination of benefits. Buyers should thoroughly research restrictions before buying a timeshare from the secondary or “resale” market. 

Why are there so many timeshares for sale?

Why are so many timeshare owners or members even willing to give them away?

Primary reasons for disposing timeshares: 

  • The sales and marketing agents used aggressive sales tactics. We felt we couldn’t get out of the sales presentation unless we bought something,
  • It doesn't work the way it was explained,
  • We bought another timeshare at another location so no longer need two (or more),
  • We don’t need or want to use it anymore,
  • The property is not kept up as we expected,
  • The timeshare owner is deceased and the family doesn’t want it,
  • We can't rent it out like they said we could,
  • The maintenance fees are out of control,
  • There are new resort fees that weren’t there before,
  • There is poor customer service,
  • We don’t feel that we are getting what we paid for,
  • We are not satisfied with the exchange properties,
  • The exchange company won't provide what we want,
  • There is never any availability at our home resort.
  • There is no availability anywhere,
  • We paid a timeshare relief (or resale) company money up front to get rid of our timeshare but we still have it,
  • We paid a timeshare listing company to list our timeshare but we still own it,
  • We traded in our timeshare for a new one, but are still being billed maintenance fees for the old one.

There are many more complaints but these seem to represent the most common reasons why someone would want out of their timeshare. Most timeshare contracts are perpetual. Given the limited to no secondary market, accompanied by rising lifetime maintenance fees, it’s no wonder there are so many complaints.

Those deceived may learn they were deceived only a day or a month after the contract rescission period. Let’s hope lawmakers and regulators wake up to the harm done to families stuck with an albatross.

 

State Governments Are Assisting Consumers with Timeshare Complaints

common timeshare complaints

Some state Attorneys General in the United States have investigated and reached settlements with timeshare companies.

An Attorney General does not act as your attorney, but if enough complaints are filed, they will launch an investigation that can result in a fine and an “Assurance of Discontinuance,” meaning the company has agreed to stop practices that are fraudulent. It’s rare for a company to admit their practices were fraudulent, but the company will agree to a settlement to make it go away.

most common timeshare complaints

The more consumer complaints, the more likely government and regulatory agencies will get involved. It is hoped more federal and state regulatory agencies will take note in an effort to: 

  • Help disgruntled consumers recoup some or all their money, if deceived,
  • Enforce existing state and federal laws to better protect consumers,
  • Enact or strengthen laws in an effort to provide more disclosure,
  • Send out strong messages promoting consumer awareness, like the Federal Trade Commission’s tips for timeshare buyers.

https://www.consumer.ftc.gov/articles/0073-timeshares-and-vacation-plans

The South Carolina Supreme Court ruled that dissatisfied timeshare owners can sue two Hilton Head Island timeshare companies. Some timeshare companies force arbitration. Many believe arbitration to be pro-industry.

Timeshare Arbitration is Not Always Equal

Arbitration is binding and private, unlike a lawsuit because a lawsuit is a public filing.  Some developers have a clause allowing the buyer to opt out of arbitration within a certain period of times after the contract is signed. Buyers should do so. 

most common timeshare complaints 

The high court’s opinion will allow the estimated 100 lawsuits that have been  filed against two Hilton Head Island timeshare companies to go forward, said attorneys Joseph DuBois and Zach Naert, who represent timeshare buyers in the cases.” (Heffernan, 2017)

 Although the complaints should be decided by the state’s real estate division, many complainants have been waiting for years for this unanimous decision.

Some States Require Timeshare Sales People To be Licensed

If the state requires a real estate license to sell timeshare, then the sales people and resorts fall under the state’s real estate division. This is where dissatisfied owners can begin the complaint process.  Some states only require their sales and marketing personnel to acquire a timeshare license. Lisa Ann Schreier, blogger and author of Timeshare for Dummies, provides a list of real estate requirements for timeshare sellers:

http://thetimesharecrusader.blogspot.com/2010/05/timeshare-license-information.html

 

Washington State Attorney General Wins Lawsuit

The Washington state Attorney General’s office reached a settlement with a company that was pocketing millions of dollars from innocent consumers by promising to get rid of their timeshares. According to the press release, the company promised to transfer people’s unwanted timeshare to their own business without paying the underlying obligated or maintenance fees. The company claimed to have handled more than 30,000 such transfers from consumers within Washington state and nationwide. 

The Attorney General’s Office (AGO) has recovered $1.2 million from Jonathan Gibbs. This will cover full restitution for Washington state victims, between $1k-$20k, and all attorney’s fees.”  (General, 2013)

Diamond Resorts Loses to Lawsuit

Diamond Resorts reached an $850,000 settlement and agreed to an Assurance of Discontinuance after hundreds filed consumer complaints with the Arizona Attorney General’s office. The Attorney General’s office helped Diamond owners get out of their agreements. Although Diamond did not admit any wrongdoing, the settlement speaks for  itself.

I hope that attorneys general in other states will consider taking similar actions against Diamond and other resort companies that consistency mislead the people who placed their trust in them.  

The $800,000 settlement between the Diamond Resorts Corp. and the Arizona Attorney General's Office was reached earlier this year after hundreds of customers accused the corporation of using "deceptive sales practices" during time-share sales presentations, according to Mia Garcia, Attorney General's Office spokeswoman.” (Frank, 2017)

 most common timeshare complaints

It is not uncommon for timeshare sales agents to make promises that they know they can’t deliver during the sales presentation.  Promises increase as high pressure builds in their effort to get a buyer to sign on the dotted line. Many companies state in their contracts that they will not guarantee anything, unless it is specifically written in the contact. Mike Finn, of the Finn Law Group, has described this “oral representation” clause as “a license to lie.”

This from the Arizona AG’s Assurance of Discontinuance: 

Some of the alleged deceptions are related to the amount maintenance fees could increase annually, consumers’ ability to resell timeshares to the public, the existence of Diamond buy-back programs, consumers’ ability to rent out their timeshares for a profit, and discounts on other travel related needs, Garcia (Arizona AG) said in a statement.” (Frank, 2017)

 

New York Attorney Reaches Settlement with Manhattan Club

The New York Attorney General’s Office reached a $6.5 million settlement with the owners of The Manhattan Club timeshare project, one of the most expensive and luxurious timeshares in the country because of its prime location. Owners had complained for years that they couldn’t use their own timeshares, while those booking online had easy availability. Also, the company wouldn’t buy the timeshare back, as promised. 

The owners of the Manhattan Club lured thousands of timeshare buyers with false promises and shady sales tactics that violated New York law,” Schneiderman said.” (Tacopino, 2017)

 

Wyndham Loses Lawsuit to Whistle Blower

A former Wyndham sales rep was awarded $20 million for wrongful termination.  The company fired Trish Williams for exposing financial fraud to authorities. She filed a lawsuit and won. 

In 2010, the plaintiff, Williams, reported that elderly customers were being defrauded by Wyndham salespeople, who were opening and maxing out credit cards without their knowledge and lying about reducing interest rates, maintenance fees and the ability to obtain rental income from their timeshares.” (Firm, 2016)

 

Marriott Vacation Club Points System Questioned by Florida Legislature

Marriott Vacation Club’s points system caught the attention of Florida legislators when they suspected that the company’s points system may not be in the best interest of the timeshare owners.

New York attorney Jeff Norton sued MVC last year, alleging in court documents that the company’s entire sales structure is basically an illegal racketeering scheme because it uses a points-based system that was built on top of a system that previously sold deeds to real estate, among other things.” (Paul Brinkmann, 2017)

pbrinkmann@orlandosentinel.com 

This Marriott lawsuit was ruled non-meritorious, after Marriott worked to have an existing law amended to remove timeshare from the definition of beneficial interest.  Attorneys for the plaintiffs felt this was an attempt to circumvent or out-legislate the lawsuit.  The lawsuit said Marriott timeshare buyers "are being duped into believing they are obtaining title to a real-property interest … when, in fact, they are merely getting a right-to-use license," the lawsuit says.

FTC Pursues Timeshare Scammers

The Federal Trade Commission (FTC) is cracking down on timeshare resale scams to help protect consumers from illegal practices, but has not, as of the date of this publication, done anything to enforce the consumer protection statute Section 5 in regard to deception perpetrated by timeshare sales agents misrepresenting the product.  

https://www.ftc.gov/about-ftc/what-we-do/enforcement-authority

The basic consumer protection statute enforced by the Commission is Section 5(a) of the FTC Act, which provides that "unfair or deceptive acts or practices in or affecting commerce...are...declared unlawful." (15 U.S.C. Sec. 45(a)(1)).

FTC Unfair Practices

An act or practice is unfair where it

  • causes or is likely to cause substantial injury to consumers;
  • cannot be reasonably avoided by consumers; and
  • is not outweighed by countervailing benefits to consumers or to competition.

 

FTC Deceptive Practices

An act or practice is deceptive where

  • A representation, omission, or practice misleads or is likely to mislead the consumer;
  • A consumer’s interpretation of the representation, omission, or practice is considered reasonable under the circumstances; and
  • The misleading representation, omission, or practice is material.

 https://www.federalreserve.gov/boarddocs/supmanual/cch/ftca.pdf

  As an increasing number of disgruntled timeshare owners file complaints with regulatory and law enforcement agencies, hopefully investigations will lead to better enforcement of existing timeshare laws, and the strengthening of disclosures. It would be nice to know the $100,000 timeshare you bought today, is worth nothing one day after the contract rescission period, should you need to sell, or learn you were duped into a purchase that fell short of what was promised.    

The Federal Trade Commission (FTC) and state agencies today announced a major takedown of timeshare property resale scams and phony or misleading travel prizes used to rope in unsuspecting consumers.” (Lewis, 2013)

 

U.S. Virgin Islands Being Sued for Additional Resort Fees

most common timeshare complaints, u.s. virgins island sued

The U.S. Virgin Islands’ government is being sued by timeshare owners because of the additional fees charged to use their timeshare. 

The fee is officially called the Environmental/Infrastructure Impact Fee, but it’s not dedicated to the islands’ degraded environment, such as its coral reefs, or crumbling infrastructure. Instead, most of it goes to the government’s general fund.” (Boiko-Weyrauch, 2017)

 The American Resort Development Association (ARDA), a Florida non-profit organization for the timeshare industry, has filed a suit in federal court against the island’s government for targeting non-resident tourists. 

…the plaintiffs argue it is ‘targeted, discriminatory, revenue legislation that has the purposeful intent to impose fees almost exclusively on interstate commerce violates the Commerce Clause,’ citing various times Gov. Kenneth Mapp has said the legislation aims to seek funding from visitors to the territory.” (Kossler, 2017)

In addition to the timeshare companies, the exchange companies are coming under fire too for making promises that they cannot keep.

RCI Sued

RCI is being sued by 500 British timeshare owners, in an effort to recover millions of pounds.  Although RCI cannot guarantee that one’s timeshare could be exchanged anywhere in the world, this false promise is heard over and over during timeshare sales presentations.  

According to the claim — which could ultimately affect up to 9,000 British clients of RCI if the multi-party test case succeeds — the timeshare participants were rarely, if ever, able to exchange their right to use one property for an alternative holiday home of the same value in a different location." (Ames, 2016)

 

Resort Owners Win Thailand Lawsuit  

Thailand is protecting owners who purchased at the Laguna Holiday Club (LHC) in Phuket, Thailand. They did not get what they had paid for and it was very difficult if not impossible to get rooms. They filed separate complaints with the local consumer protection agency and ten out of twelve were refunded their money.  

Most of the complaints are from LHC members who found it was very hard, or impossible, to get rooms from the Phuket Laguna group. Authorities claimed they had also acknowledged similar stories from foreigners who had made their complaints through embassies or online sources.” (News, 2011).  

Timeshare Advocacy Groups Helping Timeshare Owners Fight Back

Disgruntled timeshare owners are fighting back and winning all over the world. Some groups are responsible for attracting the attention of regulators and legislators possessing the power to protect consumers from unethical timeshare practices. Others are getting loan cancellations and refunds for their purchases, while others are simply walking away. Sadly for some, the outcome is foreclosure, as no one can guarantee a refund or loan cancellation.

Here are some timeshare user groups that are connecting frustrated timeshare owners with additional sources:

Know Before You Buy a Timeshare

Before you purchase a timeshare, investigate the product and the company.  Look at company reviews, good and bad, on TripAdvisor, Complaints Board, Trust Pilot, the Better Business Bureau, and other sites.

Bear in mind that the Better Business Bureau does not rate the company. They merely rate how efficiently a company responds to complaints. Some members have filed complaints complaining that the company called them asking them to call them back as the matter was time sensitive.

When the member attempts to reach the company, there is no response. This way the company can report back to the BBB that they reached out to the consumer, but they did not respond. The BBB gives the company a Gold Star for reaching out! 

most common timeshare complaints, timeshare contract

Read the paperwork thoroughly before you sign anything, but realize that there are many ways to be deceived that cannot be uncovered by reading the contract. If an agent tells you about a new program that isn’t public yet, “So don’t mention it to anyone,” don’t sign. If the availability sounds too good to be true, it may be. You may not find out until you have access to the booking site, conveniently, after the rescission period has expired! You may be showed a booklet of properties and the points required, but that does not mean the properties will be available. 

It is often not advisable for anyone to purchase a timeshare directly from the resort when there are thousands of deals at a fraction of the price for the very same product, with little or no risk at all.  Resorts will take away or reduce benefits when timeshares are bought off the secondary market.

Contact a member of the Licensed Timeshare Resale Broker Association if you would like to find out the difference in benefits buying directly from the timeshare resort as opposed to buying from the secondary market. http://www.licensedtimeshareresalebrokers.org/

For more information about the timeshare industry and how to get rid of a timeshare for buy the book, EVERYTHING ABOUT TIMESHARES

most common timeshare complaints

 

 

 

 


Leave a comment