Timeshare has been with us for many years now, the original concept was one that certainly sparked great interest, the quality of the resorts and the guarantee of that quality no matter where you booked. But over the years many timeshare owners have been the victims of some very unscrupulous entities, from resale companies to discount holiday clubs and now exit companies, all promising the timeshare owner a way out of their commitment. So we have to ask the question, is the timeshare industry responsible for the proliferation of the many scams involved around timeshare?
In a way, the industry is responsible, the way it has been sold and the difficulties many owners have on getting out of their contracts when they no longer require the membership has made it very easy for the scammers to take hold and make even more money out of the unsuspecting timeshare owners.
In the early days, timeshare was sold as though it was property, the pitch at sales events was very simple, you could not afford to purchase an apartment abroad just for holidays, the cost was too great. So how about purchasing a “share” in an apartment, along with other “owners” you would split the cost of maintaining the apartment and the resort, these were the annual maintenance or management fees.
At first glance this looks like a win-win situation, you get to “own” a share in a luxury apartment in the sun, a place you could call a home from home. You actually believed that you “owned” the apartment and that according to the sales pitch it would increase in value, just as though you owned it outright as real estate.
This then gave rise to the resale industry, with promises of very inflated prices, but this came at a cost. In order to place your “apartment” for sale, a fee was required to “list” your timeshare on their website. Many of these companies operated by way of cold calls, they enticed the “victim” with promises of quick sales and in most cases for more than you originally paid for the timeshare. Remember, you were conditioned at the original sale that you were purchasing property and it would increase in value.
These companies would also make the promise that if they did not sell within the year of the contract, the initial payment would be returned. Great promise until they disappeared after that year and reemerged under a different name. Thousands have been lost in this way.
Eventually, these began to be replaced by the “holiday clubs”, these were basically discounted clubs where you purchased a membership, it was also a way out of your annual maintenance costs. The “holiday club” when you purchased membership would then take your timeshare, in some cases with the “cashback” system which supposedly paid for the membership and your timeshare after a specific period.
This particular scheme became infamous through its use by Incentive Leisure Group, selling the Designer Way Vacation Club. This whole scheme was eventually shut down and the cashback scheme was shown for what it really was, a total fraud and in many cases, the “member” still owned the timeshare.
Eventually, these clubs have frittered away, one of the last was the Monster Travel, Monster Credits and Monster Rewards dreamed up by Mark Rowe, who was also well known as a sales rep and sales manager for Resort Properties/Silverpoint. As we know this timeshare company has been shown to be one of the most fraudulent in the history of timeshare.
Rowe even took this one step further, he set up “law firms” who would not only exit you from your timeshare contract but also get you compensation. The only problem here is that to do this you also had to “join” his “club” either Monster or the replacement Jive Hippo.
So this now brings us to the present day, the “exit & claims” companies.
Although there are many cases going through the Spanish courts all brought by genuine law firms, there is on the periphery a growing number of operations that are less than legitimate.
These claim that they will “exit” you from your timeshare contract then claim compensation once the contract is cancelled. There is however a fee that needs to be paid to “exit” you from your contract, in many cases, this can be around £3000 or more.
The vast majority of these “exits” never actually happen, we have over the years seen many companies come and go with “victims” losing thousands and finding they are now in arrears for maintenance fees of around 3 years or more. Their contracts were never cancelled despite what the company told them.
So back to our question, is the timeshare industry responsible for these frauds?
In a way they are responsible, it has been their own greed that has allowed these scams to proliferate and continue. The being locked into contracts that are virtually impossible to get out of, the huge rise in annual maintenance fees and not to forget the biggest problem of all, availability.
All these are problems made by the timeshare industry, it is these problems that make owners/members vulnerable to those who see an opportunity to make huge amounts from scamming them. After all, any industry which basically holds its members to ransom making it almost impossible to “exit”, will always be a catalyst for the unscrupulous.
It is a problem that is not going away, as long as the timeshare industry continues to operate in the same old way, there are going to be those who will take advantage of people’s fears and offer them what looks like a simple solution to their problem. Unfortunately, all it will do is empty your bank account.
If you require any information on any company that has contacted you or one that you have found on the internet, please use our contact page and Inside Timeshare will get back to you.