Better Business Bureau investigation: Unpacking timeshare and vacation club sales
No one appreciates vacations in beautiful settings and escaping the winter cold more than residents of Northern Illinois.
But the BBB is alerting consumers to do their homework to avoid what may lead to an impulsive and uninformed purchase of a timeshare. Any visit can seem warm, relaxing, exciting and fun-filled.
However, with emotions and pressure running high, vacationers can have their guard down and quickly find themselves with buyer's remorse and on the hook for a lifelong commitment of expenses and rules of timeshare ownership. In fact the new study shows annual maintenance costs average $1,120 a year and are paid every year whether you use it or not.
There are many good timeshare and vacation club sales companies out there, but research is essential. The phrase "knowledge is power," attributed to Francis Bacon and often used by Thomas Jefferson, is especially relevant to the nuances of timeshares, and a knowledgeable consumer is an empowered buyer.
Research companies and see ratings and reviews from multiple sources, and a great place to start is BBB.org. Knowledge in these situations can help avoid high-pressure tactics or signing or purchasing something without fully understanding all the obligations involved.
Our new investigative study, "Unpacking timeshare and vacation club sales," is a cautionary tale and examines patterns of consumer complaints, dollars spent and lost, customer reviews, related scams and more. We hope to raise awareness and education for a clearer picture for anyone considering a timeshare.
The study reveals that consumers often feel misled about the amount and frequency of fees charged for timeshare maintenance and items in the contract, including hard-to-book dates. Many consumers reflect that timeshare contracts are easy to get into, but these contracts are incredibly difficult to escape.
Incoming complaints report about timeshare sales, vacation clubs, timeshare exit businesses, and vacation-related scams are at 30,000 in the past two years, with $32 million disputed.
BBB Profiles for businesses in this category registered almost 10,000 negative reviews, and there were 1,116 BBB Scam Tracker reports with losses of $3.5 million.
Timeshares and vacation clubs are often synonymous with high-pressure sales. People often walk into a timeshare presentation having no idea what to expect. Timeshares are nearly impossible to sell, positioning some additional exit companies to offer misleading guarantees with hefty fees.
As if timeshares were not complicated enough -- there are also timeshare scammers who trick buyers; scammers copy high-pressure sales tactics used by actual timeshare sellers.
Imposters use the address in amenities of a timeshare or vacation club, combined with the owner's personal information, to trick victims into paying bogus fees.
BBB has monitored deception in the timeshare industry and warned consumers about timeshare exit companies for nearly half a decade. But skilled sellers continue to con buyers into unfavorable deals that often worsen when desperate investors offload purchases through the timeshare exit industry.
Here are some additional tips for anyone considering a timeshare or exit company. This is your hard-earned money. Extensively research timeshare properties, vacation clubs, or exit companies and thoroughly read contracts for language about lifetime commitment, heirs' obligations, maintenance fee increases, or guarantees. Seek outside counsel if you don't understand parts of the agreement.
If you feel high pressure like someone is trying to push you into a deal, walk away. It's also to go into a deal being realistic about what you can get for your timeshare.
Most of these contracts are not investments and may return considerably less than you paid. Be wary of paying timeshare exit companies all fees upfront until services are ready.
It's also important to remember satisfied timeshare owners and outright scammers are trying to lure in victims with great deals, knowing their targets can be enticed with low prices and high-pressure deadline deals.
As I like to say, that is a major tip-off to the rip-off. If it sounds too good to be true, it is. To report a scam, even if you didn't lose money, please go to the BBB Scam Tracker. Scam Tracker reports can raise awareness and protect your community.
• Steve J. Bernas is President and CEO of the Better Business Bureau and can be reached at email@example.com