Timeshare industry in need of reform
Timeshare industry in need of reform
Brandon Reed | Orlando Sentinel | September 30, 2019
When Orlando-area resident Karen Henderson realized that the vacation points she had purchased from a major timeshare developer resembled a never-ending contract, she was convinced that enlisting in its buy-back program would ensure that she wasn’t stuck paying increasing maintenance fees and that her daughter wouldn’t inherit a money pit.
Soon, her owner update meetings slowly transitioned from “buy more and better vacations” to “how to offset your mortgage,” and she faced long sit-downs with multiple salespeople who she says pushed her hard to “invest” in the points so she could make money that would offset payments from previous contracts that she already could not afford.
It was a seemingly endless cycle of more points and new contracts just to pay for their unaffordable maintenance fees and mortgages, and on top of that, she was met with customer service that she viewed as deceptive and, at times, straight-up fraudulent.
Karen is not alone; her story is emblematic of others who have struggled financially and emotionally with the stress of an unwanted timeshare contract —particularly here in Florida, which is regarded as the timeshare capital of the world.
When someone purchases a house, they have support from a lawyer, a lender, a realtor, a home inspector, etc. But timeshare developers are doing everything they can to target customers they think they can take advantage of, isolating them from any professional advice on the front or on the back end of an agreement, and making them sign on the spot with no real opportunity to reflect on what is often a huge and long-lasting financial commitment.
Timeshare is an enormous industry, having brought in $10.2 billion in 2018. There are 9.6 million households that own one or more timeshares.
The cost of ownership is high, with the average price of a timeshare interval being $21,455, according to the American Resort Development Association. If the buyer takes out a mortgage, at a 10-year loan and up to 17.9% interest rate, a person would end up paying $41,000 for their timeshare. On top of that, they are responsible for an ever-increasing annual maintenance fee averaging $1,000 that lasts for the lifetime of the contract.
Contrary to resort industry claims, the resale market for the majority of timeshares is difficult for many consumers — which is why so many turn to exit companies. It’s a disgrace, and these shameful statistics and anecdotes can go on and on.
Issues relating to the timeshare industry have gotten the attention of various state legislatures in 2019. Anti-consumer legislation endorsed by the timeshare industry was introduced and failed here in Florida. Conversely, recent pro-consumer legislation signed in Arizona was a positive step, but was watered down before signing thanks to lobbying from industry. Other legislation has emerged in states like Nevada, and we expect more bills from both reform advocates and timeshare allies moving forward.
But relying on individual statehouses to tackle this problem one-by-one could take years, if not decades. Noteworthy action will arise from increased awareness of the problem, which is why the Coalition to Reform Timeshare (CRT) was launched earlier this year.
The CRT is dedicated to working with legislators and consumer advocates in Florida and throughout the country on reforming the timeshare industry, making it more consumer-friendly from the sales pitch to the actual product. It is exposing the industry’s dark underbelly, sharing stories of timeshare owners who have experienced the greed and bullying that is so ingrained in timeshare business practices.
Specific areas of reform that should be priorities for fixing this industry include the right to full transparency during the sales presentation, including complete disclosure of the true market value of the timeshare, full disclosure of the entire cost of timeshare ownership, and freedom from any high-pressure sales techniques and verbal misrepresentations; the right to a 24-hour cooling-off period prior to signing a timeshare contract; the right to record a timeshare company’s entire sales presentation; and the right to unilaterally terminate an unencumbered, non-deeded timeshare.
The timeshare industry is in dire need of reform, and countless individuals and families are in dire need of help. Timeshare developers and legislators across the country —beginning with Florida — should not hesitate to act.
Brandon Reed is a consumer rights advocate and founder of the Coalition to Reform Timeshare.
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