Welcome to The Tuesday Slot, this week we welcome another new contributor, known only as “Industry Observer” as he wishes to remain anonymous. The introduction is once again by our very own Irene Parker, who was very excited to have this published, as it is from someone who has watched the industry for many years even though he has never purchased. It is certainly a very welcome independent insight into the timeshare industry and sales presentations.
Firstly a little news provided by Canarian Legal Alliance, they are certainly going to be keeping the courts busy over the next month.
At present they have in various courts around Spain 75 pre-trial scheduled, the three main timeshare companies are Anfi on Gran Canaria, Silverpoint on Tenerife and Club la Costa who have resorts on mainland Spain and the Canary Islands. Pre-trials are basically a formality and a last chance for a settlement to be reached before the case goes to a full trial. At the Courts in Maspalomas, Gran Canaria, 4 judges have been dealing with cases at this stage and issuing sentences without the need to go to a full trial. They have sat on so many cases now that they feel it is a waste of the courts time to set full trials. This has certainly speeded up the process for many clients.
Along with the pre-trials, the are 26 trials to he heard against the same timeshare resorts, again at various courts around Spain. We hope to bring you news of the conclusions as and when the cases are concluded and the judges issue their judgements.
One of the many complaints that Inside Timeshare receives from readers about their timeshares is the number of resorts that are advertising on the internet and the various booking websites.
This was sent to Inside Timeshare from one very angry reader, (see link below), it is for Select Marina Park, Mijas, Costa Del Sol. This is a Club la Costa Resort, which as we know is not a cheap timeshare to buy. It also uses the points system, which has been deemed illegal by the Supreme Court on many occasions, the reason is that it lacks any substance.
What that means is that you do not actually have any guarantee of booking your holiday accommodation, it is subject to availability. Yet this resort is being advertised on hotels.com for a fraction of the cost of the exorbitant maintenance fees that owners / members are required to pay annually, on top of the original extremely high purchase price. Is it any wonder that so many timeshare purchasers want out of their contracts!
Now for our Tuesday article.
Why at Age 70 I Have Never Attended a Timeshare Presentation
Introduction by Irene Parker
Timeshare members are always grateful when a member who has been through the complaint or foreclosure process, thinks beyond their own Nightmare on Timeshare Street to support others. There is nothing more frustrating than groveling before timeshare customer service representatives who dismiss complaints of unfair and deceptive sales practices with, “You signed a contract” or “We are not responsible for what our sales agents say.” Our deepest gratitude to the author of today’s article who has been keeping Charles and me informed of industry developments over the past two years so we can in turn pass that information on to our readers. He has never owned a timeshare.
By an Industry Observer
January 22, 2019
I have been a timeshare industry observer since 1985. I have concluded that timeshare is not for me. I shun contracts (especially perpetual ones) and I don’t plan very well in advance. For those with disposable income and the ability to plan, timeshare may be a rewarding experience. However, I would advise looking to the resale market for the best bargains. And, I would study the industry before dipping my feet in the resort pool.
In 1985 my wife and I were at North Myrtle Beach, South Carolina on our first beach vacation. Upon leaving the supermarket, I noticed a flyer underneath our car’s windshield. Similar flyers were under all the out-of-state car windshields. The flyer offered a $40 gift to preview a new resort in North Myrtle Beach. Husband and wife were required to attend. A minimum income of $30,000 was required, as well as a driver’s license and credit card. Military couples with a certain minimum grade level were also welcome. I thought, “Why do they have to pay people to go see something for sale?” People don’t get paid to look at houses or condos, and condos were quite the rage in Myrtle Beach in 1985.
I filed this experience in the back of my mind. It would reemerge numerous times in the future. On subsequent vacations to Myrtle Beach, Virginia Beach, Charleston, Orlando, Branson, and of course, Las Vegas, I would become more than aware of the smiling faces of OPCs who wanted to be my friend to get me to attend a tour, open house, remodel, new resort – whatever. Each approached us at a boardwalk or a booth, often a hyped-up boy or girl who had something special to share with me for only a few minutes of my time (90 minutes). I always reacted poorly to these solicitations since #1: I was on vacation and #2: I am not a real estate guy.
Fast forward to 2012 – I was in the midst of closing a company that I had run for 24 years. The economy had been unkind to the printing industry. I had to close the doors to my tiny empire and move to an early retirement. Fortunately, I could afford to do so. In 2013, finding myself with time on my hands, I decided to study the timeshare industry which had been in the shadows of my vacations. Three of my friends owned timeshare in different systems. I had quizzed them on their experiences. One loved his relationship. The other two had mixed feelings about whether the process was worth it.
I began to google the names of timeshare operators along with keywords – problems, complaints, regrets, and lawsuits. Come to find out, there were a lot of people who bought timeshares that either didn’t want them or felt they had been duped into buying them. As mentioned, many are satisfied with their purchase, but it appeared many families had been financially harmed by their decision to buy a timeshare.
I have spent five plus years spending an hour or two a day on sites like TUG, RedWeek, Inside Timeshare, Inside the Gate, YouTube, and complaint sites. I developed a theory as to how the timeshare companies succeed in plying their trade.
Here are my simple conclusions:
First: It starts with a bribe. It may be money, food, gambling, discounts, shows, or trips. Prospects are offered something of value by an OPC (outside person contact) for attending a presentation. David Siegel, Jr. of Westgate timeshare fame, has termed prospects “mooches.”
Second: It is seldom the promised 90 minutes. The goal is to play a game of attrition. The longer the interview, the better the chance of capitulation – the customers will buy SOMETHING even when there may be an agreed upon pact not to buy. There is a good possibility that the prospects will break down and sign just to get their gifts and get out the door.
Third: There will be more than one presenter. First is the “greeter” who will become your friend. They need to see your driver’s license and credit card. The driver’s license is to verify the family relationship and the credit card is to run a credit check. The credit check may be an unwanted surprise. The first sales agent will extol all the virtues of membership. If there is no bite, he/she will get approval to lower the price. After the initial sales agent, comes the manager or “closer.” He/she is out to make sure a sale happens. The friendliness will have worn thin. Prices will be reviewed and maybe lowered again. The sale needs to be made. If no sale has ensues, then comes the “survey person.” He/she will review the presentation, the offers, and reasons for not buying. He/she will try one last attempt to sell an exit package. It may be a “discovery” “trial” or “sample” package. This will allow the prospects the chance to check out the resorts in the system, but requires another presentation. Trial packages are limited in scope and availability.
Fourth: The whole job of the sales team is to make a SALE and that sale needs to be made TODAY. They know no one comes back later to purchase a timeshare. The sales team is on commission. They don’t eat if they don’t sell.
Fifth: Truth may take a back door to the need for a sale. There is a clause in most, if not all timeshare contracts, that says the prospect did not rely on verbal representations to make their purchase. How many of us have relied on the ethics of the salesperson sitting across from us when buying a car, boat, condo or house? In Florida timeshare sales agents are licensed sales agents but they are exempted from the ethics requirement! It’s pretty scary if you can’t rely on ethics.
The terms of the contract are in the contract – not in the words of the salesman. The salesman may say that the company will buy back your timeshare. They won’t. He/she may say that the timeshare will go up in value. It will not. He/she may say that you can go anywhere at any time. Complaints about availability abound. Attorney Mike Finn called this verbal representation clause a “license to lie,” and the beleaguered buyer unwittingly signs voluminous documents containing this one toxic sentence timeshare companies over-rely on.
Sixth: Most timeshare contracts are perpetual. Once the three to ten day state contract rescission period is up, the buyer may have no other option but to pay the mortgage and maintenance fees if they cannot convince the timeshare company to break the agreement. It can be sold or given away, but the marketplace is almost non-existent. A default can have dramatic consequences on one’s credit score.
Seventh: Sales people will make sure that no hand-written notes leave the room. False promises are not in the contract. The contract is long and initialed in many places. There are three things to be especially aware of.
- There is often a clause that says the company can change the terms and conditions of the contract whenever they want. Why even have contracts when benefits can be changed at any time?
- Accommodations are subject to availability. There are many complaints about lack of availability. Actual availability often cannot be verified until the buyer has access to the booking site, conveniently after the rescission period has expired.
- These days contracts are often signed electronically, meaning your initials are stored and then tapped, tapped, tapped on a cheap tablet even tech savvy buyers find hard to read.
Eighth: Timeshare contracts have a rescission period, which varies by state. It may be three to ten days. There are creative ways sales agents and their company can dodge the rescission period. A new program to be relieved of maintenance fees (that doesn’t exist) won’t be available until after the first of the year. While on vacation, sometimes with the kids, reviewing complex contracts can be a difficult chore. Sadly, even reading the contract doesn’t always disclose some of the pitfalls, like availability.
Ninth: Roughly 50% of the cost of a timeshare purchase is the marketing, promotion, and commission costs. Think about it. If you list your house for sale, you pay 6% or 7% commission. What would happen to your home price if you had to pay a 50% commission to buy? Add that to the false promise that your timeshare is easy sell and you have a disaster waiting to happen. Sellers are lucky to get 10% of their initial investment back, thanks to the lack of an adequate secondary market. Timeshare developers don’t even want the timeshare back. You may even have to pay the developer a fee to take the timeshare back.
Ten: Timeshares can be purchased on the resale market for pennies on the dollar. Sites like Tug2.net, Ebay, and Redweek have real people selling real timeshares for bargain prices. You can check with a member of the Licensed Timeshare Resale Broker Association to find out if your timeshare has a secondary market value. They can explain the pros and cons of buying from the secondary market compared to buying directly from a timeshare sales center. Plus LTRBA members have knowledge of all timeshares.
Don’t jump. Don’t believe you have to buy TODAY. Research the company. Research the industry. Social Media is here to stay. Chances are there is a member Facebook page out there for the timeshare you are considering, with members reporting positive and negative experiences you can evaluate. Do your timeshare math to calculate the purchase price, borrowing costs, and annual fees, not to mention special assessments. Check the resale market.
Thank you to our Industry Observer for his observations. Here are a few member sponsored sites to check with to determine if you are jumping into your vacation dream so that you don’t end up one of our Nightmare on Timeshare Street authors:
We seek to provide timeshare members a way to proactively address membership concerns; to advocate for timeshare reform; to obtain greater disclosure from the company; to advocate for a viable secondary market; and to educate prospective buyers.
Thank you Irene for the introduction and a very big thank you to our industry observer for this article and all your information over the past two years.
If you have any comments on this or any other article, please use our contact page, we welcome your insights.
If you need any information about any company that has contacted you, that you have found on the internet or from an advert in a publication, then again use our contact page and we will help you do your credibility checks. Remember, doing your homework is one of the most important ways of saving you from losing your hard earned cash.