Aug 5

Changes in the Timeshare Industry Mean New Dangers for Consumers

We’ve spent years warning consumers of the dangers of timeshare resale scams. Now, a new dangerous trend targeting desperate timeshare owners is on the rise.

The timeshare industry is a multi-billion-dollar enterprise on the forefront of constant change and adaptation. Each timeshare purchase contract is a source of lifelong revenue for a resort, and is a legally binding document that even survives death. Problems arise when timeshare owners want out of their timeshare contract.

Because of the volume of timeshare contracts signed, and the unscrupulous sales tactics of some resorts, for several years a door was left open for timeshare owners who sought to cancel their timeshare purchase contracts. This “door” was known as timeshare divestment—a process whereby a licensed attorney would negotiate with a resort to release a timeshare owner from its perpetual purchase contract. Initially timeshare divestment was a legal recourse—an attorney would examine a timeshare purchase contract, along with relevant facts and evidence, and extract legally cognizable claims such as fraud and duress where they existed to negotiate a client’s release of contractual obligations. As time went on, the nature of timeshare divestment shifted from a legal remedy to a business all its own.

People noticed that some resorts were willing to cancel timeshare contracts regardless of the validity of an owner’s claims, and started to see the birth of a new money-making idea: the quick timeshare exit. Timeshare cancellation companies (some associated with attorneys and some without a single attorney on staff) started marketing timeshare divestment as an easy escape solution for any and all timeshare owners. These companies would charge upfront fees in excess of $5,000 to send a generic one-page letter to resorts asking for timeshare cancellation. Although they found some initial success, the timeshare industry quickly caught on to this scheme and started investigating individual timeshare divestments.

The result is a current host of lawsuits against timeshare cancellation companies for racketeering (see “Welk Resorts Files Suit Against Timeshare Exit Team For Widespread Racketeering Scheme to Defraud Vacation Owners, Members and Companies” and “Lawsuits Highlight Growing Rancor in Timeshare Industry” for example). Needless to say, the timeshare owners who paid upfront fees to timeshare cancellation companies never saw that money again.

So now what?

The reality is that some timeshare divestment is still valid—several resorts do illegally use fraud and duress to entice consumers to sign perpetual timeshare purchase contracts and those contracts are in fact illegal and unenforceable. If sued, those resorts know they could lose their case on the merits and could be subject to additional penalties. In that situation, resorts realize that cancelling a timeshare contract is a way to cut their losses.

At this point, however, there is no guarantee that timeshare divestment alone will be a successful remedy. Some large resorts such as Westgate, BlueGreen, and the Holiday Inn / Orange Lake / Silverleaf Resorts triage, have decided to publically call out timeshare cancellation companies who charge upfront fees and produce little to no results regardless of the validity of their claims in an attempt to latch onto to timeshare owners. These resorts have absolutely no incentive to release a consumer from a timeshare purchase contract until and unless a consumer’s case of fraud, duress, manipulative sales tactics, etc., is decisively proven in court.

The only remedy left for struggling timeshare owners is to find a licensed attorney who will actually and effectively represent individual consumers and fight for their legal rights—from divestment through to litigation.

If you are stuck in a timeshare, do not fall for timeshare resale scams, timeshare cancellation schemes, or any other tactic used by a “timeshare” company who charges an upfront fee. Protect yourself. Contact The Abrams Firm at (360) 918-8196 for a free consultation with a licensed attorney regarding your individual legal rights. We are Consumer Protection Attorneys dedicated to fighting for you.

– Bebe B., Associate, The Abrams Firm