Irene Parker and I take a look at timeshare relinquishment comparing Europe to America. As many Europeans own timeshares purchased in America, it’s useful to have the complete picture. This time she asks the question “Timeshare Transfer Agents: Friend or Foe?
For those not familiar with the term, Transfer Agents advertise offering timeshare owners a guaranteed “deed-back” even if the timeshare program is not deeded. (more on this further on).
In Europe we have a different take on this subject, as we do not have the same model of Transfer Agents like the US. We tend to have resale firms and exit companies, some purport to be legal firms, who for a sizeable fee will relinquish your contract. Many of these companies do both, so the lines can be a ltiile blurred. Although we do have some of the same problems, such as resorts /developers who do not recognise the sale and or transfer.
Here we bring in the ongoing story of two elderly sisters, known as Mrs B. Around two years ago they took up the services of a company who claimed they would get compensation for them if they joined their “Class Action” group. But in order to do this they had to pay around £5965 to relinquish their two timeshares, one was Oasis Lanz in Lanzarote, the other was Dona Lola Club on the Costa del Sol, run by MacDonald Resorts and Hotels.
Mrs B signed a power of attorney so the company could work on her behalf, all appeared to be above board. After around a year she eventually received notification that her timeshare had gone, both had been transferred / sold to a gentleman for £1 each. Inside Timeshare has all documents relating to this.
Sounds all well and good.
Well, as far as Oasis Lanz is concerned it is, Mrs B has not had any contact from them or received any maintenance bills. The problem is Dona Lola Club and MacDonald Resorts, they will not recognise the transfer. This has now caused a problem for Mrs B and her sister.
They have been subject to threats of legal action by a debt collecting agency, Network Credit Services, employed by MacDonald Resorts. According to them there is £1412.54 (as of April 2016) for maintenance, accrued after the supposed transfer, (this amount increases as time goes on).
So why do MacDonald Resorts not recognise this transfer?
On speaking to Network Credit Services and explaining that the debt was under dispute, Maureen stated that MacDonald Resorts will not recognise any transfer made by this company, because in Maureens words “ McDonalds just get paperwork back from saying no longer required”. In other words, there was no actual sale or legal relinquishment. You will see the same in the article by Irene, using a company to take on the transfers.
This case is still ongoing with official complaints about the chasing of this “debt” going through the Financial Ombudsman Service.
Another aspect that is very common in Europe is the “Bait and Switch” tactic employed by many companies claiming to be “resale” firms.
The basis of this method is very simple, the timeshare owner either contacts a company they have found on the internet, or, they have been cold called by. They promise they can sell your timeshare and even give a very high valuation over the phone. Next they arrange a meeting to discuss your options.
Unfortunately there is no resale market, with one company actually stating this, so what then happens?
Simple, in order to get rid of your timeshare you must now purchase another product, be it leisure credits or discount holiday club. At the meeting ( read sales presentation), you are told that the product will cost around £10k to £12k. But don’t worry, we will discount that price for the value of your timeshare, so it will only cost you a fraction of that amount.
This was used to dupe many owners into Club Class and DWVC, where the incentive was the cashback offer. With this you are given a certificate for the value of the timeshare plus the cost of joining the club. In 3 to 5 years, as long as you follow the rules (which were complicated) you could then claim back the value on the certificate. So far we have never known anyone who did get paid out.
But what happened to your timeshare?
For many it was simple, they did not get rid of it, then after a couple of years they found they owned years of back maintenance. The timeshares were not transferred or relinquished, they are still liable for the maintenance and still own it, causing many a stressful situation with debt collectors.
So, let us look at what the situation is in the USA.
Timeshare Transfer Agents: Friend or Foe?
By Irene Parker November 20, 2016
Lately, a company by the name of Resort Release has been running an ad on my Facebook feed. It is always frustrating to invest time and energy campaigning to improve the timeshare industry, only to have companies we don’t approve of take out ads promoting their service. At least Inside Timeshare can control who posts on their site.
Transfer agents advertise offering timeshare owners a guaranteed “deed-back” even if the timeshare program is not deeded. The upfront fee ranges from $3500 to $7000 or more. Contracts taken back are “bundled” 25 to 50 and sold back to the developers, similar to what happened during the worldwide subprime mortgage crisis. The developers resell for full value.
What else can happen to the points or weeks or “inventory” recovered?
According to Greg Crist of the National Timeshare Owners Association,
“There are basically four buckets that transfer companies often attempt to put inventory into…
Bucket 1 – Works with an inventory broker who may or may not have a direct inventory recovery agreement. *Branded properties only
Bucket 2 – Lists timeshare properties on eBay and Craig’s List for $1.00
Bucket 3 – Transfers to “Mules” *Foreign Nationals who may be judgement proof
Bucket 4 – Transfers to Companies who later dissolve the corporation administratively. *Leaves resort pursuing a clouded title, doubling recovery costs and impacting association’s bad debt line, which all remaining owners on the roster end up absorbing.”