Scammers pretend to help owners get out of their contracts while taking their cash.
4 Things to Understand About Exiting Your Timeshare Contract
ARDA, the trade association representing the timeshare industry, has teamed up with Lisa Ann Schreier, a/k/a The Timeshare Crusader, to put together this list of important information about exiting a timeshare contract.
Education is key
As an owner, you need to know how to use your timeshare, the costs associated with your timeshare, and your options if you ever decide that ownership no longer meets your vacation needs.
“The closing/verification process is designed to answer your questions away from a potentially commissioned salesperson,” says Lisa. “Take advantage of that process. Don’t be rushed.
Having answers at the onset of owning may save you resources later.”
If you decide a timeshare is no longer a fit with your lifestyle, then educating yourself on the safe and often free ways to exit is another important step in the education process. “ResponsibleExit.com is a safe and trusted resource that will help with any questions you may have,” says Jason Gamel, President and CEO of American Resort Development Association (ARDA).
The developers on ResponsibleExit.com have support teams trained to help owners understand their options. “By contacting your developer, they can review your account and let you know your best options based upon your individual needs,” says Gamel.
There’s a world of difference between a timeshare that’s paid in full and one with a loan balance.
No Loan balance and current on your maintenance fees
Many timeshare developers offer low-cost or even free exit options to those owners who don’t have a loan balance and are current on their maintenance fees. And often, you don’t even need a reason other than you no longer want to be an owner. The key is calling the developer first, as they might not be able to work with you (for legal reasons) if you have engaged a third party to help.
Loan balance and/or delinquent maintenance fees
In this situation, cancelling your contract becomes a lot more complicated. Not only because you have an outstanding loan, but it is also more difficult if you owe money to the association. The only way to modify your loan or receive any other financial relief is to work directly with your timeshare developer. “No developer or lender is going to cancel a contract just because you suddenly decided you don’t want the timeshare or can’t afford it. Also, claiming, without written proof, that you were promised your maintenance fees would never go up, or that your timeshare would increase in value, are not legitimate reasons either. This is yet another reason why education is vitally important”, says Lisa, The Timeshare Crusader. It’s also worth noting that many scam companies claim they can get you a refund. In a word…not likely.
The truth about self-proclaimed exit companies and exit attorneys.. they’re not the same
For years, companies have come and gone that have promised quick and easy exit options for timeshare owners. Whether it was having a “buyer ready on the other line” to buy your timeshare, or companies who now claim that they can cancel your timeshare contract, companies will do anything to get you to pay for something you may be able to do yourself. If you’re an owner, chances are you’ve already been contacted by one or more of these companies.
“While these companies are quick to use the words “fast, easy and/or simple” and seem to offer a money-back guarantee if they don’t do what they promise, the reality is not quite as rosy,” cautions Lisa.
Here are a few things to keep in mind:
- Timeshare ownership is governed by the legal documents that create the timeshare plan as well as legally binding contracts. These non-lawyer exit companies cannot offer legal assistance if they aren’t lawyers themselves. If they claim to be working with lawyers, it is good to check the Better Business Bureau (BBB) and any complaints against those companies to see if that is the case.
- It’s simple for any company to offer a money-back guarantee. It’s an entirely different matter to get an exit company to pay up when they don’t live up to their obligations. Going back to the importance of education, check BBB ratings, and talk to other owners. What happens if the company goes out of business? How will they protect your money? Will they put it in an escrow account where they can’t touch it until they deliver on their promises?
- Read the fine print in the contract. If all the company can do on your behalf is obtain a foreclosure, is this considered a “win?” And what about your credit? Are you prepared to take a hit on your credit score that will last 5, 7, or more years? Understand how the foreclosure process works and know the difference between a maintenance fee foreclosure and a loan foreclosure. Each one may have a different impact on your credit.
- So, should you consult an attorney? Maybe. “Understand that hiring a timeshare savvy attorney is almost always a better option than dealing with a self-proclaimed exit company, all depending on what you are trying to accomplish,” warns Lisa.
- “If you find an attorney willing to take on your case based on one of the concerns outlined in the previous section, they might be more interested in their fee than providing you the solution you are looking for,” says Lisa. “Hiring a reputable attorney will help you to not only determine if you have a valid legal claim against your developer but also give you legal counsel at all stages of your case and establish a valid attorney/client relationship.”
To summarize, ARDA and The Timeshare Crusader offer this information:
- Understand what you’re purchasing and your exit options before purchasing.
- Realize that if you’re looking to sell your timeshare, its value isn’t based on how much you paid for it; instead, it is its value in having prepaid vacations and time with your family and friends.
- Avoid any company or individual wanting to charge you large up-front fees for exit services that won’t be completed for years.
- Always check with your developer first or ResponsibleExit.com before you sign anything with a third-party company.
- If a company offers a “money-back guarantee,” make sure to ask how your money would be protected if they go out of business or they don’t perform their services as promised.
- Check reviews readily available online but not on the company’s own website, as these can be easily fabricated.
- Finally, talk to other owners, your developer, and your exchange company, as you may discover new ways to use your timeshare.
Alaska Attorney General Action Against Fraudulent Timeshare Exit Company Serves as Warning to Consumers
With the recent lawsuit filed by Alaska Attorney General Treg Taylor against seven corporations and eight individuals who are alleged to have operated a fraudulent timeshare exit company, the American Resort Development Association-Resort Owners’ Coalition (ARDA-ROC) today reminded timeshare owners to always talk to their developer first when looking to exit their timeshare.
The Alaska Attorney General filed a lawsuit against an interrelated network of timeshare exit companies, including seven corporations and eight individuals, alleging they defrauded elderly Alaskan consumers. The defendants in the Attorney General’s complaint include Consumer Law Protection, LLC, Consumer Rights Council, Premier Reservations Group, LLC, Resort Transfer Group, LLC, Square One Development Group, Inc., Square One Group, LLC, Timeshare Help Source, Christopher Carroll, George Reed, Louann Reed, Scott Jackson, Eduardo Balderas, Sherrod Banks, Courtney Kirkpatrick, and Gary Adamson.
“Consumers should always be wary of companies that use scare tactics to create a sense of urgency,” said Attorney General Taylor, in a press release from his office on June 28, 2022. “A company that refuses to give you a few days to think over a big financial commitment probably isn’t the kind of company you want to do business with.”
“Continued actions by Attorneys General throughout the United States only emphasize how important it is that consumers remain cautious about engaging with unscrupulous third-party companies who require them to pay thousands in up-front fees and offer guarantees that sound too good to be true,” said Robert Clements, Vice President of Regulatory Affairs and General Counsel for the American Resort Development Association (ARDA). “If you have done business with one of the companies named, we encourage you to reach out to the Alaska Department of Law.”
The Attorney General’s office alleges that the entities solicited timeshare owners to get out of their timeshare contracts based on false claims and promises in exchange for large upfront payments. According to the Alaska Attorney General’s press release, the lawsuit alleges that the defendants:
- Targeted timeshare owners using a deceptive direct mail campaign, which lured timeshare owners to sales presentations at Anchorage hotels with false promises of a $250 shopping card and information on how to eliminate timeshare maintenance fees, improve their ownership experience, or legally exit their timeshare; and
- When the timeshare owners arrived at the sales presentations, the defendants used hard sales tactics, including telling the timeshare owners that their maintenance fees would skyrocket, that their heirs would be forced to pay the maintenance fees in perpetuity, and that the only way to exit their timeshare contracts was to pay for the defendants’ timeshare exit services.
Nine Alaskan victims, and counting, have been identified by the Department of Law, who paid the defendants a total of over $113,000. There may be additional victims who have not yet been identified.
The Alaskan Attorney General’s office has asked customers nationwide who believe they were defrauded by the companies to fill out a consumer complaint form here or file a complaint through the Department of Law’s Consumer Protection Unit at (907) 269-5200.
“This is exactly why we continue to remind timeshare owners who are looking to exit about the importance of going to their developer, resort management company or HOA first,” said Ken McKelvey, Chairman of the Board for ARDA-ROC. “Through ARDA-ROC, we also offer a safe exit resource, that is supported by timeshare developers, through the Coalition for Responsible Exit.”
ARDA-ROC encourages timeshare owners looking to exit to contact their timeshare developer, resort management company or HOA first. Timeshare developers also support using the Coalition for Responsible Exit as a safe exit resource, which offers free or low-cost exit options and can be accessed by visiting ResponsibleExit.com.
Legal Action by Missouri Attorney General Schmitt Against Timeshare Exit Companies Serves as Warning to Consumers
For Immediate Release | 6/21/2022
Contact: Sarah Bascom | Kelsey Deasy
ARDA-ROC Reminds Timeshare Owners to Talk to Their Developer First When Looking to Exit Their Timeshare
Washington, D.C. – In response to recent action by the Missouri Attorney General against an interrelated network of timeshare exit companies and their principals, the American Resort Development Association-Resort Owners’ Coalition (ARDA-ROC) today reminded timeshare owners who are looking to exit their timeshare about the importance of going to their timeshare developer first.
The Missouri Attorney General obtained a temporary restraining order against an interrelated network of timeshare exit companies and their principals, freezing several million in funds from their bank accounts. Entities named in the complaint are Consumer Law Protection, Consumer Rights Council, Premier Reservations Group, Resort Transfer Group, Square One Development Group and related entities, and Timeshare Help Source (collectively referred to as “The Companies”). Read more about the action by clicking here.
“Consumers should always be extremely cautious about engaging with unscrupulous third-party companies who require consumers to pay thousands in up-front fees and offer guarantees that sound too good to be true,” said Robert Clements, Vice President of Regulatory Affairs and General Counsel for the American Resort Development Association (ARDA). “These companies make false promises, use deceitful practices and prey on owners looking to exit their timeshares, and sadly, thousands of consumers have lost millions of dollars in the process. If you have done business with one of the companies named above, we encourage you to reach out to the Missouri Attorney General’s office.”
The action Missouri took alleges that since 2018, The Companies have:
- Used “deceptive, unfair, and high-pressure sales tactics to convince consumers to pay them thousands (or tens of thousands) of dollars for timeshare exit services that [they] cannot or will not perform.”
- Made a myriad of false and deceptive statements, including that consumers’ timeshare maintenance fees would escalate unchecked into perpetuity; that unless consumers paid for services, consumers’ children and grandchildren would be saddled with ever-increasing timeshare fees; and that they would provide a full refund if consumers had not been exited within a year.
- Falsely claimed they are affiliated with timeshare developers, exchange companies, the Better Business Bureau and the industry trade association, ARDA.
- Failed to disclose, and even taken steps to actively conceal the right to rescind the contract within three days.
The state estimates that the number of victims could be in the thousands with millions of dollars in damages, including damage to consumers’ credit.
The Missouri Attorney General’s office has asked customers nationwide who believe they were defrauded by the companies to file a complaint through the Consumer Protection Hotline at 800-392-8222 or submit a complaint online at ago.mo.gov.
“ARDA-ROC continues to shed light on these stories in hopes of reaching more and more consumers out there before these ‘timeshare exit companies’ do,” said Ken McKelvey, Chairman of the Board for ARDA-ROC. “Timeshare owners looking to exit should always go to their timeshare developer, resort management company or homeowners’ association first to discuss what kind of programs they have in place.”
ARDA-ROC recommends owners always contact their timeshare developer, resort management company or HOA as their first source of information regarding exit options. The Coalition for Responsible Exit is also a place for owners to safely explore free or low-cost exit options that are supported by timeshare developers and can be accessed by visiting ResponsibleExit.com.
ARDA-ROC is a 501(c)4 non-profit entity funded by over 1.5 million individual timeshare owner’s voluntary contributions. ARDA-ROC is dedicated to preserving, protecting, and enhancing vacation ownership through smart policy and sensible regulation. ARDA-ROC advocates for local, state, and federal policies that enable the vacation ownership industry to thrive and provide consumers with an enriched vacation ownership experience. For more information, visit ARDA-ROC.org.