LEGAL MATTERS: 7 Reasons Why You Should Never Invest In A Timeshare

Wednesday, June 26, 2013

John T. Longo, GoLocalProv Legal Contributor

 

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Timeshares will turn that great little spot where you enjoyed your vacation into a legal nightmare–don't let yourself be fooled.

If you vacation anywhere that draws a lot of tourists this summer, chances are someone will try to sell you a timeshare. Don’t buy! Timeshares are a financial black hole and a legal nightmare. Here’s why:

The higher the pressure, the worse the deal.

The last thing a timeshare salesperson wants you to do is research the deal on your own. He knows if you do you will realize you are getting hoodwinked and he won’t get his 40% commission. To discourage you from doing your own research he will do anything he can–legal or illegal–to get you to buy right away. He’ll offer you discounts that are only available if you buy that day. He’ll let you buy with just a small down payment you can put on your credit card. He may even flat out lie and tell you that you are just putting down a deposit you can get back if you change your mind.

Timeshares are not investments.

Salespeople tout timeshares as investments. I have yet to find an investment advisor who agrees with them. Investments make you money; timeshares cost you money every year and decline in value. Desperate owners routinely offer to sell their timeshares for a fraction of what the resort’s salespeople charge.

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Timeshares are more expensive than hotels.

If you plan to go to the same place, at the same time, every year, forever, then a timeshare might be cheaper than a hotel. But if you are buying with the hope of occasionally ‘trading’ your week for a week at another resort, you are going to lose. First, to trade you are going to have to pay an annual fee to a trading operation like Interval International or RCI. Then you are going to have to pay a swap fee each time you trade. Then, if the week you own is not as valuable as the week you want to spend at another resort (and that is always the case), you are going to have to pay an upgrade fee. To add insult to injury, the other resort may even soak you with more fees.

The giveaways they offer you are junk.

If the free meals, plane tickets, cruises and other goodies salespeople promise you just for visiting their resorts were worth a damn, they would not be giving them away. You won’t realize how pathetic the freebies are until you try to use them: the ‘cruise’ will be on an overnight ferry trip with $200 in port charges; the plane tickets will be ‘vouchers’ you have to pay to redeem without knowing if they will even be good for the dates you want to fly; and the food will be a ‘alcohol not included, buy-one, get one free’ offer at a third-rate restaurant.

You cannot just walk away from a timeshare.

Once you own a timeshare, you are liable for the taxes and annual fees. If you stop paying either, the resort will wreck your credit and it may sue you. You will be on the hook until you record a deed transferring the timeshare to a new owner. (Budget at least $1,000 in filing and attorney fees for that.) Even after you deed it to someone else, you will still be on the hook for past taxes and fees.

Scammers are not afraid of lawsuits.

When you come back from your vacation and realize you got snookered, you may come to me. Chances are I will tell you that you have a great case that is not worth pursuing. Among the problems will be the paperwork they tricked you into signing, the cost of suing someone out of state, the difficulty tracking down the lying salesperson, and the reality that, even if you beat them in court, it may be impossible to collect the money you win.

Vacation clubs are equally bad.

Because people are becoming skeptical of timeshares, some scam artists are now pitching ‘vacation club memberships.’ They sell them the same way as timeshares–using high-pressure tactics that keep you from doing your own research–and you should run away from them just like timeshares.

The bottom line is this: don’t waste any of your precious vacation time with timeshare hucksters. After you get home, if you had a good time and want to go back, Google ‘timeshares for sale by owner’ in the place you visited.
 

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John Longo is a consumer rights attorney practicing law in Rhode Island and Massachusetts. He represents consumers who have disputes with businesses, employees cheated out of their wages or overtime, car buyers stuck with Lemons, and people in need of bankruptcy protection. He is a member of the National Association of Consumer Advocates, the National Association of Consumer Bankruptcy Attorneys, and the Rhode Island Association for Justice.

 

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