You Can Cancel Your Timeshare Contract! 

Or so they would like you to believe. Here's a scam going around you need to be aware of. It sort of goes like this. You get a call at night (of course). The nice person on the other end asks you if you're happy with your time share. They want to know if you received everything you were promised at the resort. They want you to know that if you bought your time share direct from the developer the value of that time share is now pennies on the dollar. THAT gets your attention! Especially is you're still paying for it! 

 What's going on here? Well, they're doing a classic sales technique: Create a problem and then offer the solution to the problem. It's a tried and true technique, and unfortunately one that certain con artists use to your disadvantage at times. Who falls for it? It could be a number of folks:

·          You bought the time share direct from the developer (big mistake) and afterwards you discovered you vastly overpaid for it. Canceling the contract sounds like a way out of a bad mistake. Perhaps they can even get you ALL your money back!

·         You're still paying the mortgage on the time share and you know you're underwater on it. You don't want to let it go to foreclosure because that will hurt your credit rating. Perhaps canceling the contract would solve the problem!

·         You've tried selling the time share by giving money up-front to con artists who promise everything and deliver nothing. Perhaps canceling the contract is a better idea and less costly!

·         You were pressured into the contract and really should never have bought it. It just wasn't the right thing for you and you've never used it. Canceling the contract would make things right again!

The con artist will give you a whole smorgasbord of ideas of why you can legally cancel your contract, waiting for you to pick one or two so you feel like a victim. On one web site we visited they gave these ideas: 

• Being told you are buying a real estate investment.
• Being told your timeshare is a tax write off.
• Being told they have a resale department in the event you want to sell your property/points.
• Informed the resort was pet friendly and later finding out pets are not allowed.
• Verbose claims to induce the purchase of the timeshare.
• Not being informed of exchange fees and being told that you can travel freely at any time to any place.
• Not being made aware of maintenance fees or that your fees will increase
• Not being informed of potential assessments as the property ages or that you may be responsible for additional dues when other timeshare owners have backed out of their timeshare.
• Summoned to a meeting under the guise it is a mandatory "owners" meeting only to be pressured and sold an upgrade
• Not being able to use your timeshare, with the resort citing that nothing is available or you do not have enough points.
• Not being informed of the time period in which you can cancel your timeshare.

        On another web site we found these:

• Were you told the timeshare was an investment that would increase in value?
• Were you told you could rent your timeshare to make money?
• Were you told your maintenance fees would not go up or minimally if at all?
• Were you told that you had to buy today and today only?
• Did your 90 minute presentation last much longer?
• Did they offer to buy your previous timeshare for a great profit?
• Did they tell you that you could go anywhere in the world whenever you wanted
• Did they tell you that you were only going to attend an "Owner's Update Meeting" to give you information on how to better use what you have?
• Did they tell you that you could write the timeshare off on your taxes or that you could refinance at a much lower rate?
• Were you ever told that you had a legal right to rescind or cancel and how to do so if you chose?
  

     Now of the two web sites we visited (and there's a ton of them out there) we're not stating that these particular companies are not legit. We use these examples only as examples of ideas that are thrown at you to make you think you were wronged and you have a legal right to be able to cancel the contract.     

     Perhaps there really is a company out there that can do these great things and we just don't know about them. Perhaps they truly have helped hundreds and hundreds of consumers out there as they claim. Perhaps there really is an Easter Bunny.     

     Now for the disclaimer. We're not attorneys and we're not giving legal advice. That said, we ARE a licensed real estate brokerage. That means we know real estate contracts, and time share contracts in particular since that's our specialty. So the big question: Can you cancel the contract? Yes, you can. Next time you see the Easter Bunny he'll tell you how.     

     Now folks, let's be real. A developer spends tens of millions of dollars to build and sell a time share resort. They have an army of attorneys guiding them all along the way. Do you really think their contracts are not 100% iron-clad? In 26 years of doing this I've heard of only two or three contracts that were broken and that was because the salesperson simply screwed up royally and there was evidence to prove it. You have a better chance of winning the lottery than finding something in your paperwork that can prove you were lied to, misinformed or cheated in any way at all. It doesn't happen. PERIOD. And stuff like, "Did your 90 minute presentation last much longer?".........please, give me a break.    

     So what's the catch? MONEY! Of course! For their services you're going to pay them up-front! But wait, there's more! Some of these companies have a 100% money back guarantee! So how could you go wrong? Well of course to take advantage of the guarantee you're going to have to follow their guidelines exactly to the letter (oh yes. They don't do the work for you, they just tell you what to do) If you don't follow the instructions to the letter the guarantee is void and they can't help you any longer 'cause you didn't follow their instructions. The instructions are not so bad, really. Write a bunch of letters in a certain order and on certain dates. Follow up with phone calls and a second round of letters, all in a certain order and on certain dates. Personally appear at the offices of the Attorney General and Real Estate Commission dressed only in a copy of your contract, while moon-walking through the front door. Stuff like that. 

     Yes, when you buy a time share from the resort they do tend to "stretch" the truth here and there. OK, they lie through their teeth. Sometimes. Not all the time. Some are really very straight forward and honest. But anything verbally discussed or promised in a real estate contract is of no value. That is the law. Everything must be in writing. If it's not in the contract, it doesn't exist. That's the law. In fact, in any real estate contract worth its salt you're going to find a sentence like this, "No agreements or representations, unless incorporated in this contract shall be binding upon any of the parties". In other words, if its not in the contract, it doesn't exist. That sentence is there to protect BOTH parties, not just one. 

And now you know!  

Tom Tubbs, Broker
Island Consulting Realty

[Editors Note- Timeshare Cancellation Schemes are a growing problem in the industry, simply because resale values have fallen so dramatically over the past few years and many timeshare owners still have large mortgages which make resale impossible. As always- simple common sense can protect you from the vast majority of timeshare related fraud and one simple statement to always remember...

Never pay any type of upfront or advance fee to sell, rent, or liquidate an unwanted timeshare!]

TripAdvisor reviews for this resort warn travelers of aggressive and potentially abusive timeshare sales tactics at the Lifestyle Tropical Beach Resort & Spa located at Puerto Plata in the Dominican Republic.

.......We came for two weeks club la costa/ RCI. attacked with bribes of free drinks, tour and then the sales pitch where we were told our Club La Costa points were worthlessand we should change over to Lifestyles resort for another $15,000....

...One of the most beautiful places in the world, great service, relaxing atmosphere but if you book through cheap carribean watch out because the price may be right but you are roped unawares into a promotional tour where they will aggressively go with the hard sell on a timeshare and if and when you say no they will verbally punch you in the face...

...The down side were the timeshare salesmen; they were relentless despite our firm "NO gracias." During our dinner at Indochine, 7/25, one of the timeshare reps interrupted our meal to set up a free tour. BAD FORM, despicable behavior. Our time is valuable and not be wasted on a sales pitch on our vacation. Be on guard for the guys in white shirts with clipboards.....

...DO NOT stay here. There wouldn't be enough space for me to list all my complaints. I travel regularly and this was by far the worst travel experience of my life. The food is horrible, service is just as bad, no one speaks english, and you are contantly hounded by sales people. The beach is dirty and not easily accessible, the only half way decent thing about it was the rooms. We stayed in the Presidential suites and they were nice but I wouldnt return if you gave it to me for free!...

When there is a dollar to be made, often common sense seems to go out the window. I just saw a press release from a credit card processor promising easy access to merchant services for "high risk" businesses including timeshare resale organizations.

"An account can be deemed as high risk simply because of the industry it is in. It's rewarding to know that we can help people live out their dreams of owning and operating a business, regardless of what industry they are doing business in.  We have programs in place that protect our financial institutions and allow these merchants to conduct normal business without being limited by unnecessary restrictions and limitations." states Christopher Kille, President of Commersense.

Commersense serves a number of small businesses within the United States, and is capable of serving international clients. The company specializes in providing services that protect the client against account closure. Accounts placed within the past few months have included clients within the following industries: debt collection, travel and timeshare resale, online pharmaceuticals, nutraceuticals, and credit repair. Commersense provides custom priced solutions based on the clients' merchant needs.

I've long advocated that if legislation was passed which targeted not only the con artists themselves, but also the banks and merchant accounts which give them the ability to defraud consumers so easily. If merchant accounts required a large bond be purchased for high risk accounts that would be available and subject to client refunds if fraud was discovered by law enforcement- it would go a long way to helping put an end to these call center boiler rooms.

While it is vital that legitimate businesses have access to the financial tools necessary for growth and operation, I have to wonder if a merchant services company that actively targets high risk businesses is creating a responsible business

A story featured on WSPA Channel 7, a CBS station out of the Carolinas exposes a common complaint reported by consumers when purchasing non-deeded membership based travel clubs.

A South Carolina couple stated that they had signed a contract to purchase a travel club membership and paid a $1,200 deposit to Time Out Access Travel, and their paperwork promised them a three day cancellation period. The $3,700 program promised deep discounts on travel services including cruises and airfare. Charlie and Ann Berry were caught up in the sales presentation, and agreed to purchase without fully understanding the product. "After we got home I started looking over, trying to figure out exactly what this was," said Berry. "I said, 'No we're gonna cancel it'."

Many of these travel club memberships rely on high pressure sales tactics to generate business. In some cases, these products are sold without any type of cancellation or rescission period. Complaints against travel clubs memberships are especially common in Branson, Missouri- where many travel club scams seem to be based.
Mr. Berry states that he submitted a written cancellation letter within three business days, and has proof it reached the company because he sent the letter by certified mail. He states that he was not contacted by the company nor given a refund.

When the TV reporter contacted the owner of Time Out Access Travel for answers, he stated that the month-long delay and lack of contact regarding the refund was due to the relocation of the company's customer service department.

The article then quotes a local attorney Ken Anthony as saying that Berry's could have easily sued Time Out Access Travel and won in court. "If they failed to pay him it would be breach of contract because this is part of a contract that they've signed," he said..

My question is:

Just how many consumers would actually pursue a lawsuit to recover $1,200. lost in a possible travel club scam- and if they did so, just how much money would that lawsuit cost? Somehow I doubt that many attorneys would agree to pursue such a case without requiring a large retainer for their services.

Unfortunately, often the best strategy a consumer can pursue is to try and generate enough negative publicity to force the company's hand. The influence of the media can be a very powerful tool for consumer protection, and any consumer who feels they have been cheated should always be willing to use any tool at hand.

A press release from the US Dept of Justice states that three Florida men- Michael Franzenburg, 47, of West Palm Beach; Joseph Grizzanti, 30, of Greenacres; and Kenneth Foote, 40, of Lake Worth, were charged with conspiring to commit mail fraud, in violation of Title 18, United States Code, Section 1349.

According to the criminal information filed with the court, the defendants engaged in a scheme to defraud timeshare owners throughout the United States and Canada. From July 2009 to February 2010, telemarketers contacted more than 2,000 victims, and collected more than $3.3 million for timeshare marketing and sales services, which were never provided. The telemarketers, operating under the name International Resort Solutions LLC, solicited clients through at least four separate boiler rooms, each of which was located in Palm Beach County.

Franzenburg allegedly created International Resort Solutions LLC and arranged to have individuals establish boiler room telemarketing centers in Palm Beach County, through which they could solicit customers who were willing to pay advanced fees for purported timeshare marketing and sales services. The boiler room owners, including Grizzanti, used managers to operate the boiler rooms. The managers, including Foote, were, in turn, responsible for the day-to-day operations of the boiler rooms, including oversight of all sales and supervision of the telemarketers.

According to the information, the boiler room managers directed the telemarketers to call timeshare owners throughout the United States and Canada to induce them to pay up-front fees for purported timeshare marketing and sales services by making false and misleading representations about the company's services. Among the false claims was that International Resort Solutions had buyers for their timeshares, that the company had closings scheduled for their timeshares, and that they would actively market their timeshares to potential buyers.

If convicted, each defendant faces a maximum term of imprisonment of up to 20 years, to be followed by up to three years of supervised release. This is a very interesting case as prosecutors are targeting all levels of the organization: the LLC owner, the call center owners, and the direct supervisors of the boiler room call center.

As always, it is important to understand that the Information above is only an accusation, and a defendant is presumed innocent unless and until proven guilty. However, this type of aggressive prosecution of timeshare scam artists will hopefully encourage other owners and employees of timeshare scams to close their operation before they too face punishment including long terms of imprisonment!

More information on this case can be found at these links:
http://www.usdoj.gov/usao/fls
http://www.fbi.gov/miami/press-releases/2011/three-charged-in-palm-beach-county-time-share-boiler-room-conspiracy/view

If you have ever been approached by a pushy OPC (Off-property contact) trying to entice you into a mandatory timeshare sales presentation, you'll appreciate the authors candid explanation of her experience in Sedona, Arizona.

Follows are excepts from the article along with additional comments from me in italics.  I encourage you to READ THE FULL ARTICLE BY CLICKING HERE.

"...while vacationing with my film-obsessed son, I thought it only natural to stroll into the free-admission Sedona Motion Picture Museum... (a) museum attendant stopped us and soon revealed the true purpose of this pseudo-attraction. The museum was partly a marketing device to entice tourists to timeshare pitches at a 14-year-old resort development (Sedona Pines, a RCI points based timeshare) affiliated with RCI (a timeshare exchange company).... Like slow-witted sheep, my son and I had walked clear-eyed into a booby trap...."
 
The author goes into a very detailed explanation of her experience, and the high pressure sales tactics used to entice her to decline a potential "developer swap" that would have taken her Marriott timeshare week and $6,000 in exchange for a 30,000 annual point RCI membership based out of the Sedona Pines Resort (similar RCI point ownerships are often sold on eBay for less than $100. and there is currently a 42,000 annual point ownership for Sedona Pines advertised on Redweek.com with an asking price of $900.). She eventually paid $1,295. for a one time allotment of 30,000 RCI points (estimated monetary value of approx $450 to $550 as a rental transaction) just to escape the sales presentation.

She exposes two of the biggest "almost lies" that are used in many developer sales presentations:

Timeshare Developer Sale Weasel Misrepresentation #1 in this Sales Presentation...

"Points members pay no annual maintenance fees, which make traditional timeshare ownership so expensive, he said..."

This is a blatant twisting of the truth by a developer sales weasel in an attempt to deceive. While there are no "maintenance fees" associated with an RCI points account- there are in fact maintenance fees that are associated with the underlying timeshare interval which generates the annual point allotment. In this particular instance, if she would have agreed to the purchase she would have still been responsible for annual maintenance fees to Sedona Pines of approximately $450. per year. She would also have been responsible for the required fees to RCI described below (information taken from http://www.rci.com/CDA/Common/Documents/DisclosureGuidePoints.pdf).

SUBSCRIBING MEMBERSHIP AND TRANSACTION FEES.
Network Dues and Subscription Fees (“Network Dues”) are payable to the Network each Use Year. The 2010 Network Dues are: 1 year: $124 USD
2 years: $229 USD
3 years: $319 USD
4 years: $409 USD
5 years: $499 USD

Each time a Member makes a transaction, a transaction fee is charged. Transactions include but are not limited to making a Reservation, canceling a Reservation, saving RCI Points, or making an External Exchange Reservation. The ranges of 2010 transaction fees are as follows:

Reserving Member’s own Vacation Time for 7 nights only: No Charge
(This means that you use the exact underlying ownership on your deed or resort contract. In other words, you are not charged a transaction fee if you do not use your RCI points account, but are still responsible for the annual dues to RCI).

Home Resort Priority Reservation for 7 nights only: $40 USD
(This means that you simply trade your full week for another full week at your home resort. This is often something you could do at your own resort for free (floating timeshare weeks) before you "converted" to RCI points.)

Reserving Vacation Time other than Member’s own Vacation Time or Home Resort Priority Reservation:
For 7 nights or more: $139 USD
For 6 nights: $119 USD
For 5 nights: $109 USD
For 4 nights: $99 USD
For 3 nights: $79 USD
For 2 nights: $59 USD
For 1 night: $39 USD
(This is the fee you pay when you make a reservation. Also, it's not shown here but many individual resorts also charge a housekeeping fee on top of this fee.)

RCI Points Partner Inventory Reservation:
Fees vary by product type.
(There are various services including rental cars, airline tickets, gift cards, etc.)

Guest Certificate: $59 USD
(You pay this if you allow family or friends to use your reservation.)

Points Transfer: No Charge
Point Borrowing: No Charge
Points Rental: $0.02 USD per point
(This is a per point fee charged to you if you need a few extra points to secure your reservation. You can rent one-time usage points equal to half of your annual allotment each year. This is normally much cheaper than adding another small point package ownership to your portfolio.).

Points for Deposit: $26 per use, limit 4 uses per year
(Points for Deposit is a program where an RCI points owner can deposit up to four RCI weeks intervals into their RCI points account each year. When a RCI Weeks resort converts and joins the RCI points program- you are no longer allowed to use that ownership for points for deposit, but instead must pay the resort developer any amount they determine as a conversion or upgrade fee. This is often a very nasty surprise to timeshare owners who were sold a combination portfolio advertised as RCI points but which actually contained one or more points for deposit intervals.)

Point Saving:
If Reservation Made During Use Year: No Charge
If No Reservation Made During Use Year: $26 USD

Points Extension:
13,999 points or less: $39 USD;
14,000 points or more: $99 USD

Membership Transfer Application:
$100 USD

RCI Vacation Protection:
For 5 nights or more: $49 USD
For 3 – 4 nights: $39 USD
For 1 – 2 nights: $29 USD

Call Center Domestic/International External Exchange: $194 USD
RCI.COM Domestic/International External Exchange: $179 USD
(These are the fees charged to RCI weeks members for exchanges. If you talk to a person, it costs more!)

 http://www.rci.com/CDA/Common/Documents/DisclosureGuidePoints.pdf


What all this means is that the salespersons statement of "no maintenance fees" would have resulted in about $700. in fees each year for ownership, membership, and a full weeks exchange.

Timeshare Developer Sale Weasel Misrepresentation #2 in this Sales Presentation...

"With flexibility, you could always find a destination for 7,000 points or fewer, he said, thus stretching your vacation time to as many as three, maybe even four weeks."

The author herself found out just how difficult it was to accomplish this:

"I’ve spent many hours on the RCI Web site trying to pull the same kind of magic that The Starter achieved — spinning 30,000 points into a series of luxurious getaways. But because I’m not so flexible and usually take vacations along with millions of other regular Americans, I found that my 30,000 points would get me just about what I could expect with II — one week’s stay in a given destination. Many of the nicest places require double my points for prime vacation weeks. I used virtually my whole allotment to book a summer week in New Hampshire, and when I had to reschedule unexpectedly because of work, I discovered to my horror that I would lose 75 percent of my points because I hadn’t bought a $49 “vacation protection” plan."

This developer almost-misrepresentation is a true staple in the industry sales pitch. The promise of "Endless Vacations" by using getaways and last call offerings to travel at pennies on the dollar prices. While these programs exist, members often find that the destinations available are not nearly as desired as the sales person would have you believe. The other big issue for members is that while the point cost of booking the reservation goes down the closer you get to the usage dates- often the travel expense to get there goes up and eats away any savings you would have enjoyed.

The above example is just another illustration of a common-sense truth! Consumers should never agree to any type of purchase when confronted by a high-pressure sales presentation or a threat of a "today only" offer. Consumers should never buy or sell a timeshare on impulse. Timeshare ownership is often a lifelong commitment with annual fees and associated costs of ownership that should only be purchased after a period of careful consideration, research, and due diligence.

During this frustrating period of ridiculous political gridlock, it's refreshing to see something that was actually accomplished by legislators that may have a positive impact on the public.

This year, the Florida legislature passed and signed into law HB 883, which became effective on June 2, 2011. This bill included the "Tourist Safety Act of 2011" which was written to try and stop the practice of individuals entering hotel lobbies without the permission of hotel management, and passing out unsolicited advertisements.  The Tourist Safety Act of 2011 provides that any person who, without permission, delivers, distributes, or places, or attempts to deliver, distribute, or place, a handbill at or in a public lodging establishment commits a misdemeanor of the first degree and can be fined a minimum of $2,000 for a second violation, or $3,000 for a third or subsequent violation.   

This law will hopefully give local authorities a better opportunity to stop "pizza flyer scams" which advertise (and sometimes even deliver) a pizza to hungry tourists in an attempt to steal personal and credit card information.

In an earlier scam report, Vacation-Times.org received reports that this type of scam was making its rounds through the Disney resort area in Orlando, Florida.