Timeshare Scams

Don't Let Them Con You.

Wade Capital Management, of Des Moines, Iowa, has been labeled a libelous business by the BBB. Their purpose was to hold money in escrow for timeshare owners who wanted to sell their timeshare through a listing agency. The Iowa Secretary of State has said they have no listing of this company either. The BBB went to their “address” at 668 19^th Street in Des Moines and found a three-story apartment building there. The manager of that building stated he had no idea what Wade Capital Management was and that no business by that name was at that location.

The company claimed to work with a “vacation ownership closing company.” They utilized the common scam of calling up prospective victims from a list of timeshare owners. Once on the phone, they promised they could have the timeshare sold at a profit, but in order to do so would need money upfront. They did not offer a written contract of services, and asked for the money to be wired to them. Wiring money is like handing over cash; once the transaction is made, that money is irretrievable. At the conclusion of their investigation, the BBB immediately took away Wade Capital Management’s rating.

The California Department of Real Estate (DRE) has issued a consumer alert about the rise of timeshare resale sales fraud in California.

“Given the economic strain many families are facing, timeshare ownership is a luxury some families can no longer afford”, DRE Acting Commissioner Barbara Bigby said. “And with so many owners wanting to divest themselves of their timeshares, it has created an opportunity for fraudsters.”

According to the DRE, these are the top three timeshare scams in California:

1. Con-artists who claim they will buy timeshares, but ask for an over-the-phone fee.
2. Con-artists who claim that they are an agent who has a “ready-and-able” buyer for their timeshare, but want a paperwork fee for the transaction.
3. Con-artists who pose as legitimate, licensed real-estate brokers, who then say they will list their timeshare, and ask for a fee to do so. They never list the timeshare and pocket the money made from the consumer

All of these con-artists ask for money up front and once payment is secured, the victim never hears from them again.

The DRE has several tips for timeshare contract holders to avoid being a victim of a resale telemarketing scam.

1. Research the company’s reviews on Trustlink and the Better Business Bureau (BBB).
2. Never pay upfront. DRE advises you contact them to see if the business is a reputable one.
3. Only licensed real estate brokers may list and sell timeshares. Ask for their license paperwork before you pay for suspicious or “too-good-to-be-true” services.
4. Ask for the agent’s contract in writing. Of course, all in writing contracts have to be agreed to. Transfer Smart offers an In-Writing Resale contract of their services.
5. Check them out on Google. A sign of a great timeshare transfer company is the amount of blogs they have.

Visit their website if you feel you’ve been a victim of a timeshare resale scam or for a copy of the Consumer Alert.

Timeshare Mega Media and Marketing Group, an illegitimate “company,” that claimed to resale timeshares, now has four more people going to prison. Eric Friedman, Alvaro Rodriguez, Hernando Osorio and Joseph Ackermann are all charged with defrauding customers and violating FTC rules regarding the Do Not Call registry.

Since last year, nineteen former employees of TMMMG have been charged and sentenced by the FBI, all receiving prison terms ranging from five to thirty-three months. Investigators say the company made $5 million in one year, and some individual clients paid up to $10,000 to earn what they thought was a way out of their timeshare deeds.

Prosecutors say there were never any buyers and they are now in the process of getting the company to award restitution to the many people they defrauded.

A class-action suit was filed in San Francisco last Thursday claiming Shell Vacations charged thousands of dollars for “points” sold on Ebay for $1.
Shell Vacations Club, which has resorts all over the United States and Canada, was charged with false advertising and scamming consumers.They claimed timeshares were purchased at a “fixed cost,” there were “thousands of dollars in hidden fees” and “price increases.”

Plaintiffs purchased 2,500 points they thought they could use towards vacations all over the United States at the many SVC resorts, at a price of $14,224. They then found Ebay links to 9,700 points for $1.

Upon further internet research, a complaint from a consumer not familiar with the case read: “In the next 10 years we will be paying $50,000 to go on vacation 10 times, and that only covers the condo, not airfare, etc,” one man wrote on an online complaint forum, according to the complaint. “How is that a great investment?” Another complaint cited “”one unpleasant surprise after another” and “many lies and conveniently concealed information.”

The plaintiffs seek damages for breach of contract, breach of faith, fraud, false promises deceptive business practices and negligent misrepresentation.

Transfer Smart is the only company that can get you out of a timeshare contract with a legal, 100% In-Writing Guarantee. No one else can do that, no one. Contact Transfer Smart today.

Denver District Attorney Mitch Morrissey

“Victims, particularly those eager to sell their interests in timeshare properties, are being contacted by people claiming to be timeshare buyers who are making sizable offers that may or may not require an upfront fee,” Morrissey said.

“Often, the buyer claims to have a ‘buyer waiting.’ In the interest of making the deal as simple and painless as possible, the buyer initiates all ‘necessary’ documents, and emails them to the seller to sign and send back,” Morrissey added.

“Sellers are told they will be reimbursed for these fees at the time of closing, only to find that the buyer and escrow account company have vanished before they have finalized the deal,” Morrissey said.

The DA wants citizens to know you should only use licensed real estate agents when dealing with any property ownership issues, especially timeshares. Any financial deals made should be put into writing, something the scam artists aren’t able to offer. And you should never agree to purchase anything over the phone if you’ve never dealt with the company in the past.

If you’d like to file a complaint with the FTC over a possible timeshare scam you know of, go to their website.

Transfer Smart offers a 100%, IN-WRITING GUARANTEE that we will get you out of your timeshare if you qualify, and 96% of timeshare owners will qualify. Call Transfer Smart today.

The Internet Crime Complaint Center has seen a rise in the amount of international vacation scams. In Fort Lauderdale, Florida, and across the country, residents of beachfront properties have had complete strangers visit them with documentation that they have rented out their home for weeks or months at a time. The only problem? Their homes were never placed for rent by the actual owners. The vacationers spend money on travel to exotic locations only to find out they are victims of vacation scammers.

Steven Chase, a south Floridian with a million-dollar beachfront home, was surprised when a family from Surinam showed at his door expecting to use his home as a vacation house.
“I said, ‘I hate to say it to you, but this house is not for rent. You’ve been scammed,’” Chase recalled telling the family.

Mr. Chase did not profit off the would-be vacationers, rather a nameless website which demanded payment upfront did. Unfortunately, prosecuting the criminals behind the sight proves to be an elusive goal, as the pages are generated out of the United States. As Sgt. Steve Scelfo, head of the Fort Lauderdale police’s Economic Crimes unit outlines: “The money’s not actually coming through Fort Lauderdale. We don’t have the standing jurisdictionally to investigate it.”

Foreigners are not the only victims. Mr. Michael McKenna, of Pine Beach, New Jersey, sent an inspector to Mr. Chase’s home to see if the home had enough space for six adults, four children and two dogs. Of course, he did not pay upfront but he considers himself one of the lucky ones. He now says he will only work on vacation rentals with real estate agents, face-to-face. “They’re definitely more trustworthy than going off those internet sites,” he said.

Mr. Chase found his house listed on four different websites and is making it a personal goal to eradicate false vacation rental listings. “I’m trying to push for some legislation to hold these websites accountable for the information they post,” he said. “I’m making a lot of noise.”

Transfer Smart offers a 100% in-writing guarantee that they can get you out of your timeshare contract. Call them today for a no-cost information session.

The accountant from Cherry Hill, N.J., jumped on it, and became one of 6 million Americans who own a time share, shared vacation property that owners get to stay in for a week or so each year for life.

Four years later, the thrill of ownership is gone. Her family has yet to use the one week at Atlantis Harborside Resort she bought, and the contract has become a nagging financial burden at a time when a lousy economy is squeezing her home finances.

Udell is back on Craigslist, this time as a seller wanting to be free from the mandatory annual fees that sustain her ownership. Her bill for 2010 totals $1,650, up 20% from last year plus a $250 charge to make up for “the deadbeats who have abandoned their time shares,” according to Udell. “I can’t deal with the hassle anymore.”

Udell is joining a rising chorus of time-share owners who are fed up with mortgages and burdensome payments that they think render little or no return. With ironclad contract terms, high annual fees and aggressive salespeople, time shares have always been controversial. But this economic downturn has been particularly nasty for the industry. It’s killed the easy credit that was the lifeblood of developers and forced would-be customers to think twice about signing a life-long financial commitment for something they’d use only a few days a year.

Sales are down. Resort development has come to a standstill. Mortgage defaults are rising. Thousands of salespeople and maintenance staffers have been laid off. Customers are flooding the resale market, where some are trying to unload contracts for as little as $1.

Meanwhile, scams that target desperate owners are skyrocketing, triggering enforcement actions from state attorneys general throughout the country. The number of consumer complaints about time shares received by the state of Florida, which is home to a quarter of the industry, doubled in 2009 to more than 2,500, according to the state’s Department of Agriculture and Consumer Services.

“We were always ‘the engine that could’ for the (tourism) industry, but now we’re the red-headed stepchild,” says Howard Nusbaum, CEO of American Resort Development Association, or ARDA, an industry trade group. “We’re going through a tough period.”

There were 1,630 time-share resorts in the USA as of 2008, with 40% of them concentrated in Florida, California and South Carolina, according to ARDA. About 7 million time-share contracts are currently held by owners in the USA. The average price in 2008 was $20,150.

Sales drop, defaults rise

Since they were created in the 1960s, time shares didn’t have a down year until 2008, when sales dipped 8% to $9.7 billion, according to ARDA. They plunged 40% more in 2009 to about $6 billion and will likely remain flat in 2010, Nusbaum estimates.

Time-share mortgage defaults rose each quarter in 2009 compared with 2008, ARDA says. In the third quarter of last year, 2.9% of time-share mortgages went into default vs. 2.2% in 2008. About 8% of time-share mortgages were in default as of 2008. Maintenance fees have grown an average of 12% a year since 2005.

Large hospitality companies, already hurting from empty hotel rooms, are retreating. Marriott International’s time-share sales fell 38% in the first nine months of 2009 to $445 million. It also wrote down $752 million of its time-share resorts’ value, and it said it would discontinue construction of new properties and would convert some to other types of properties.

Nancy Lehenky, a Marriott customer, wishes she could walk away from the $60,000 mortgage she took on last year for a two-week interval at a resort in Palm Desert, Calif.

Lehenky and husband David, who run Flathead Distillers, a vodka distillery in Montana, pay $1,100 a month for the mortgage and $2,000 a year in taxes and fees. While they were able to afford the payment when they bought it, her husband has since been laid off and their decision to open the distillery has forced them to tighten spending. Lehenky particularly regrets having paid full retail price rather than shopping for a resale. “Had I known what was coming in the future, I’d have held off,” she says.

Lehenky asked Marriott to take the contract back last year. The company refused.

ARDA’s Nusbaum says industry woes can be traced largely to developers no longer being able to package mortgage debt as asset-backed securities sold to Wall Street.

Developers have historically lent directly to customers. Cash back from investors on the sale of bundled mortgages was used to build more resorts. The mortgage-backed security market all but vanished in the 2008 financial crisis, and the industry has had to halt most new construction and cut back on free cruises, air tickets and hotel rooms given as incentives for customers listening to a sales pitch.

Westgate Resorts, one of the largest operators in the industry, had a record year in 2009 with about 2,200 new rooms/suites, says Mark Waltrip, COO of Westgate. This year, it’ll open none. The company halted construction on “10 to 12″ properties that have already had groundbreaking, he says.

Remorseful buyers

The industry contends that customer satisfaction remains high and that demand hasn’t waned. ARDA says 50% of buyers already own another time share. And the percentage of people who buy a unit after sitting through a sales pitch remains unchanged at about 10% to 15%, Waltrip says.

Unlike other hospitality or real estate industries, time-share operators dictate much of consumer demand by providing incentives for people to come directly to resorts or to sales-pitch sessions, ARDA’s Nusbaum says. “No one wakes up in the morning and says they’re going to buy a time share. They come in and get compelled by the product. It’s an emotional buy,” he says.

Summers Doonan, an American Airlines flight attendant in Orlando, knows all too well about the allure of a sales pitch conducted next to a resort pool glistening in the Florida sun. She and her former husband, Brian, were invited in 2007 to a free weekend at Ron Jon Cape Caribe Resort in Cape Canaveral and sat through a sales pitch. They walked out with a one-week contract that cost them $18,000. “We were suckered in, and we fell in love with it,” she says.

Having divorced last year and now on unpaid leave from her employer, Doonan wants to sell it. She never got to use her week, because it fell in October when her kids are in school.

Trying to exchange it for other weeks or for time at other resorts, which was her original intent, proved to be a lot more competitive, difficult and expensive than she was led to believe, she says. On top of $1,150 in taxes and fees every year, she pays $90 a year to belong to an exchange club and faces another $200 fee each time she wants to trade. She and her husband have agreed to split paying for the fees until it’s sold.

“Both of us are tight. I have three kids I’m trying to raise as a flight attendant,” she says. “It was a rash decision. You’re surrounded by beauty and the excitement of it all. (Salespeople) are definitely charismatic.”

Brian Rogers, who runs the Timeshare Users Group, or TUG, an online forum for owners, says the growing number of disgruntled, but more informed, customers combined with the financial crisis that has forced developers to cut spending will result in changes in how the industry is run.

The number of ads by owners looking to sell on Rogers’ website is 25% higher than a year ago. About half of the people on his website want to sell their time share, he says. “More people are trying to get out. Some find it difficult even when listing their time share for a single dollar.”

That is not comforting news to Udell. She’s listed her week in the Bahamas for $4,300 on Craigslist, TUG and other sites, but hasn’t gotten any offers. Her husband, Craig, is changing his career to be a teacher and earns a fraction of what he made before, and her family can’t afford annual vacations without going further into debt. “Going on a vacation like that would be living beyond our means,” she says.

‘Scams’ in resale market

Sensing desperation, fly-by-night hucksters are cold-calling and mailing owners with promises of a quick sale for an upfront fee as high as $5,000.

Udell says she’s been bombarded by such solicitations. “They make it very tempting,” she says. “One company guaranteed (it) can sell for $20,000. I hung up on him.”

Doonan, the flight attendant, paid $600 upfront with a reseller, which has listed her unit for $18,000 on its website and printed fliers that she’s never seen.

TUG’s Rogers says he knows of no resale company that can guarantee an owner a sale. Customers, he says, should never pay resellers any upfront fee. “They’re so masterful at their pitch,” he says of resellers. “It’s a scam on top of a scam on top of a scam.”

Florida is a hotbed of time-share scams. The state’s attorney general, Bill McCollum, sued two related companies in November, that have allegedly collected more than $4 million monthly in fees from owners who were solicited via Internet advertising and telemarketing calls.

The lawsuit alleges that the defendants — including Universal Marketing Solutions, Creative Vacation Solutions, owner Jennifer Kirk, and Kirk’s brother, Scott Kirk — collected “advertising and/or marketing fee(s) for time-share resale services via a series of false and fraudulent misrepresentations.”

The defendants required “hundreds of consumers” to pay $1,500 each and said they “would market and/or advertise their time share in an attempt to resell it, when in actuality the time share was merely placed on a website, to which no Web traffic was directed.” The defendants also “made blatant misrepresentations … (that) they could definitely sell their time share within a certain time period.” Calls to the companies weren’t returned.

“The secondary market doesn’t have the protections (that are in the primary market),” says Nusbaum of ARDA, which issued a statement applauding Florida’s lawsuit.

Despite their flaws, time shares still have legions of loyal fans. Linda Moore, a property manager in Thorofare, N.J., uses her weeks in Florida as her winter home. She bought her first week at Fort Lauderdale Beach Resort several years ago, and has steadily added to her portfolio by looking for deals in the resale market.

She bought another week in early January for $575 and now owns more than 10 weeks there. “I had people come in and say, “This is a tremendous view,” and I’m saying, ‘Yeah, and it’s all mine.’ “

Post from: Timeshare Blog

Timeshare Owners Fed Up

The accountant from Cherry Hill, N.J., jumped on it, and became one of 6 million Americans who own a time share, shared vacation property that owners get to stay in for a week or so each year for life.

Four years later, the thrill of ownership is gone. Her family has yet to use the one week at Atlantis Harborside Resort she bought, and the contract has become a nagging financial burden at a time when a lousy economy is squeezing her home finances.

Udell is back on Craigslist, this time as a seller wanting to be free from the mandatory annual fees that sustain her ownership. Her bill for 2010 totals $1,650, up 20% from last year plus a $250 charge to make up for “the deadbeats who have abandoned their time shares,” according to Udell. “I can’t deal with the hassle anymore.”

Udell is joining a rising chorus of time-share owners who are fed up with mortgages and burdensome payments that they think render little or no return. With ironclad contract terms, high annual fees and aggressive salespeople, time shares have always been controversial. But this economic downturn has been particularly nasty for the industry. It’s killed the easy credit that was the lifeblood of developers and forced would-be customers to think twice about signing a life-long financial commitment for something they’d use only a few days a year.

Sales are down. Resort development has come to a standstill. Mortgage defaults are rising. Thousands of salespeople and maintenance staffers have been laid off. Customers are flooding the resale market, where some are trying to unload contracts for as little as $1.

Meanwhile, scams that target desperate owners are skyrocketing, triggering enforcement actions from state attorneys general throughout the country. The number of consumer complaints about time shares received by the state of Florida, which is home to a quarter of the industry, doubled in 2009 to more than 2,500, according to the state’s Department of Agriculture and Consumer Services.

“We were always ‘the engine that could’ for the (tourism) industry, but now we’re the red-headed stepchild,” says Howard Nusbaum, CEO of American Resort Development Association, or ARDA, an industry trade group. “We’re going through a tough period.”

There were 1,630 time-share resorts in the USA as of 2008, with 40% of them concentrated in Florida, California and South Carolina, according to ARDA. About 7 million time-share contracts are currently held by owners in the USA. The average price in 2008 was $20,150.

Sales drop, defaults rise

Since they were created in the 1960s, time shares didn’t have a down year until 2008, when sales dipped 8% to $9.7 billion, according to ARDA. They plunged 40% more in 2009 to about $6 billion and will likely remain flat in 2010, Nusbaum estimates.

Time-share mortgage defaults rose each quarter in 2009 compared with 2008, ARDA says. In the third quarter of last year, 2.9% of time-share mortgages went into default vs. 2.2% in 2008. About 8% of time-share mortgages were in default as of 2008. Maintenance fees have grown an average of 12% a year since 2005.

Large hospitality companies, already hurting from empty hotel rooms, are retreating. Marriott International’s time-share sales fell 38% in the first nine months of 2009 to $445 million. It also wrote down $752 million of its time-share resorts’ value, and it said it would discontinue construction of new properties and would convert some to other types of properties.

Nancy Lehenky, a Marriott customer, wishes she could walk away from the $60,000 mortgage she took on last year for a two-week interval at a resort in Palm Desert, Calif.

Lehenky and husband David, who run Flathead Distillers, a vodka distillery in Montana, pay $1,100 a month for the mortgage and $2,000 a year in taxes and fees. While they were able to afford the payment when they bought it, her husband has since been laid off and their decision to open the distillery has forced them to tighten spending. Lehenky particularly regrets having paid full retail price rather than shopping for a resale. “Had I known what was coming in the future, I’d have held off,” she says.

Lehenky asked Marriott to take the contract back last year. The company refused.

ARDA’s Nusbaum says industry woes can be traced largely to developers no longer being able to package mortgage debt as asset-backed securities sold to Wall Street.

Developers have historically lent directly to customers. Cash back from investors on the sale of bundled mortgages was used to build more resorts. The mortgage-backed security market all but vanished in the 2008 financial crisis, and the industry has had to halt most new construction and cut back on free cruises, air tickets and hotel rooms given as incentives for customers listening to a sales pitch.

Westgate Resorts, one of the largest operators in the industry, had a record year in 2009 with about 2,200 new rooms/suites, says Mark Waltrip, COO of Westgate. This year, it’ll open none. The company halted construction on “10 to 12″ properties that have already had groundbreaking, he says.

Remorseful buyers

The industry contends that customer satisfaction remains high and that demand hasn’t waned. ARDA says 50% of buyers already own another time share. And the percentage of people who buy a unit after sitting through a sales pitch remains unchanged at about 10% to 15%, Waltrip says.

Unlike other hospitality or real estate industries, time-share operators dictate much of consumer demand by providing incentives for people to come directly to resorts or to sales-pitch sessions, ARDA’s Nusbaum says. “No one wakes up in the morning and says they’re going to buy a time share. They come in and get compelled by the product. It’s an emotional buy,” he says.

Summers Doonan, an American Airlines flight attendant in Orlando, knows all too well about the allure of a sales pitch conducted next to a resort pool glistening in the Florida sun. She and her former husband, Brian, were invited in 2007 to a free weekend at Ron Jon Cape Caribe Resort in Cape Canaveral and sat through a sales pitch. They walked out with a one-week contract that cost them $18,000. “We were suckered in, and we fell in love with it,” she says.

Having divorced last year and now on unpaid leave from her employer, Doonan wants to sell it. She never got to use her week, because it fell in October when her kids are in school.

Trying to exchange it for other weeks or for time at other resorts, which was her original intent, proved to be a lot more competitive, difficult and expensive than she was led to believe, she says. On top of $1,150 in taxes and fees every year, she pays $90 a year to belong to an exchange club and faces another $200 fee each time she wants to trade. She and her husband have agreed to split paying for the fees until it’s sold.

“Both of us are tight. I have three kids I’m trying to raise as a flight attendant,” she says. “It was a rash decision. You’re surrounded by beauty and the excitement of it all. (Salespeople) are definitely charismatic.”

Brian Rogers, who runs the Timeshare Users Group, or TUG, an online forum for owners, says the growing number of disgruntled, but more informed, customers combined with the financial crisis that has forced developers to cut spending will result in changes in how the industry is run.

The number of ads by owners looking to sell on Rogers’ website is 25% higher than a year ago. About half of the people on his website want to sell their time share, he says. “More people are trying to get out. Some find it difficult even when listing their time share for a single dollar.”

That is not comforting news to Udell. She’s listed her week in the Bahamas for $4,300 on Craigslist, TUG and other sites, but hasn’t gotten any offers. Her husband, Craig, is changing his career to be a teacher and earns a fraction of what he made before, and her family can’t afford annual vacations without going further into debt. “Going on a vacation like that would be living beyond our means,” she says.

‘Scams’ in resale market

Sensing desperation, fly-by-night hucksters are cold-calling and mailing owners with promises of a quick sale for an upfront fee as high as $5,000.

Udell says she’s been bombarded by such solicitations. “They make it very tempting,” she says. “One company guaranteed (it) can sell for $20,000. I hung up on him.”

Doonan, the flight attendant, paid $600 upfront with a reseller, which has listed her unit for $18,000 on its website and printed fliers that she’s never seen.

TUG’s Rogers says he knows of no resale company that can guarantee an owner a sale. Customers, he says, should never pay resellers any upfront fee. “They’re so masterful at their pitch,” he says of resellers. “It’s a scam on top of a scam on top of a scam.”

Florida is a hotbed of time-share scams. The state’s attorney general, Bill McCollum, sued two related companies in November, that have allegedly collected more than $4 million monthly in fees from owners who were solicited via Internet advertising and telemarketing calls.

The lawsuit alleges that the defendants — including Universal Marketing Solutions, Creative Vacation Solutions, owner Jennifer Kirk, and Kirk’s brother, Scott Kirk — collected “advertising and/or marketing fee(s) for time-share resale services via a series of false and fraudulent misrepresentations.”

The defendants required “hundreds of consumers” to pay $1,500 each and said they “would market and/or advertise their time share in an attempt to resell it, when in actuality the time share was merely placed on a website, to which no Web traffic was directed.” The defendants also “made blatant misrepresentations … (that) they could definitely sell their time share within a certain time period.” Calls to the companies weren’t returned.

“The secondary market doesn’t have the protections (that are in the primary market),” says Nusbaum of ARDA, which issued a statement applauding Florida’s lawsuit.

Despite their flaws, time shares still have legions of loyal fans. Linda Moore, a property manager in Thorofare, N.J., uses her weeks in Florida as her winter home. She bought her first week at Fort Lauderdale Beach Resort several years ago, and has steadily added to her portfolio by looking for deals in the resale market.

She bought another week in early January for $575 and now owns more than 10 weeks there. “I had people come in and say, “This is a tremendous view,” and I’m saying, ‘Yeah, and it’s all mine.’ “

Post from: Timeshare Blog

Timeshare Owners Fed Up

The accountant from Cherry Hill, N.J., jumped on it, and became one of 6 million Americans who own a time share, shared vacation property that owners get to stay in for a week or so each year for life.

Four years later, the thrill of ownership is gone. Her family has yet to use the one week at Atlantis Harborside Resort she bought, and the contract has become a nagging financial burden at a time when a lousy economy is squeezing her home finances.

Udell is back on Craigslist, this time as a seller wanting to be free from the mandatory annual fees that sustain her ownership. Her bill for 2010 totals $1,650, up 20% from last year plus a $250 charge to make up for “the deadbeats who have abandoned their time shares,” according to Udell. “I can’t deal with the hassle anymore.”

Udell is joining a rising chorus of time-share owners who are fed up with mortgages and burdensome payments that they think render little or no return. With ironclad contract terms, high annual fees and aggressive salespeople, time shares have always been controversial. But this economic downturn has been particularly nasty for the industry. It’s killed the easy credit that was the lifeblood of developers and forced would-be customers to think twice about signing a life-long financial commitment for something they’d use only a few days a year.

Sales are down. Resort development has come to a standstill. Mortgage defaults are rising. Thousands of salespeople and maintenance staffers have been laid off. Customers are flooding the resale market, where some are trying to unload contracts for as little as $1.

Meanwhile, scams that target desperate owners are skyrocketing, triggering enforcement actions from state attorneys general throughout the country. The number of consumer complaints about time shares received by the state of Florida, which is home to a quarter of the industry, doubled in 2009 to more than 2,500, according to the state’s Department of Agriculture and Consumer Services.

“We were always ‘the engine that could’ for the (tourism) industry, but now we’re the red-headed stepchild,” says Howard Nusbaum, CEO of American Resort Development Association, or ARDA, an industry trade group. “We’re going through a tough period.”

There were 1,630 time-share resorts in the USA as of 2008, with 40% of them concentrated in Florida, California and South Carolina, according to ARDA. About 7 million time-share contracts are currently held by owners in the USA. The average price in 2008 was $20,150.

Sales drop, defaults rise

Since they were created in the 1960s, time shares didn’t have a down year until 2008, when sales dipped 8% to $9.7 billion, according to ARDA. They plunged 40% more in 2009 to about $6 billion and will likely remain flat in 2010, Nusbaum estimates.

Time-share mortgage defaults rose each quarter in 2009 compared with 2008, ARDA says. In the third quarter of last year, 2.9% of time-share mortgages went into default vs. 2.2% in 2008. About 8% of time-share mortgages were in default as of 2008. Maintenance fees have grown an average of 12% a year since 2005.

Large hospitality companies, already hurting from empty hotel rooms, are retreating. Marriott International’s time-share sales fell 38% in the first nine months of 2009 to $445 million. It also wrote down $752 million of its time-share resorts’ value, and it said it would discontinue construction of new properties and would convert some to other types of properties.

Nancy Lehenky, a Marriott customer, wishes she could walk away from the $60,000 mortgage she took on last year for a two-week interval at a resort in Palm Desert, Calif.

Lehenky and husband David, who run Flathead Distillers, a vodka distillery in Montana, pay $1,100 a month for the mortgage and $2,000 a year in taxes and fees. While they were able to afford the payment when they bought it, her husband has since been laid off and their decision to open the distillery has forced them to tighten spending. Lehenky particularly regrets having paid full retail price rather than shopping for a resale. “Had I known what was coming in the future, I’d have held off,” she says.

Lehenky asked Marriott to take the contract back last year. The company refused.

ARDA’s Nusbaum says industry woes can be traced largely to developers no longer being able to package mortgage debt as asset-backed securities sold to Wall Street.

Developers have historically lent directly to customers. Cash back from investors on the sale of bundled mortgages was used to build more resorts. The mortgage-backed security market all but vanished in the 2008 financial crisis, and the industry has had to halt most new construction and cut back on free cruises, air tickets and hotel rooms given as incentives for customers listening to a sales pitch.

Westgate Resorts, one of the largest operators in the industry, had a record year in 2009 with about 2,200 new rooms/suites, says Mark Waltrip, COO of Westgate. This year, it’ll open none. The company halted construction on “10 to 12″ properties that have already had groundbreaking, he says.

Remorseful buyers

The industry contends that customer satisfaction remains high and that demand hasn’t waned. ARDA says 50% of buyers already own another time share. And the percentage of people who buy a unit after sitting through a sales pitch remains unchanged at about 10% to 15%, Waltrip says.

Unlike other hospitality or real estate industries, time-share operators dictate much of consumer demand by providing incentives for people to come directly to resorts or to sales-pitch sessions, ARDA’s Nusbaum says. “No one wakes up in the morning and says they’re going to buy a time share. They come in and get compelled by the product. It’s an emotional buy,” he says.

Summers Doonan, an American Airlines flight attendant in Orlando, knows all too well about the allure of a sales pitch conducted next to a resort pool glistening in the Florida sun. She and her former husband, Brian, were invited in 2007 to a free weekend at Ron Jon Cape Caribe Resort in Cape Canaveral and sat through a sales pitch. They walked out with a one-week contract that cost them $18,000. “We were suckered in, and we fell in love with it,” she says.

Having divorced last year and now on unpaid leave from her employer, Doonan wants to sell it. She never got to use her week, because it fell in October when her kids are in school.

Trying to exchange it for other weeks or for time at other resorts, which was her original intent, proved to be a lot more competitive, difficult and expensive than she was led to believe, she says. On top of $1,150 in taxes and fees every year, she pays $90 a year to belong to an exchange club and faces another $200 fee each time she wants to trade. She and her husband have agreed to split paying for the fees until it’s sold.

“Both of us are tight. I have three kids I’m trying to raise as a flight attendant,” she says. “It was a rash decision. You’re surrounded by beauty and the excitement of it all. (Salespeople) are definitely charismatic.”

Brian Rogers, who runs the Timeshare Users Group, or TUG, an online forum for owners, says the growing number of disgruntled, but more informed, customers combined with the financial crisis that has forced developers to cut spending will result in changes in how the industry is run.

The number of ads by owners looking to sell on Rogers’ website is 25% higher than a year ago. About half of the people on his website want to sell their time share, he says. “More people are trying to get out. Some find it difficult even when listing their time share for a single dollar.”

That is not comforting news to Udell. She’s listed her week in the Bahamas for $4,300 on Craigslist, TUG and other sites, but hasn’t gotten any offers. Her husband, Craig, is changing his career to be a teacher and earns a fraction of what he made before, and her family can’t afford annual vacations without going further into debt. “Going on a vacation like that would be living beyond our means,” she says.

‘Scams’ in resale market

Sensing desperation, fly-by-night hucksters are cold-calling and mailing owners with promises of a quick sale for an upfront fee as high as $5,000.

Udell says she’s been bombarded by such solicitations. “They make it very tempting,” she says. “One company guaranteed (it) can sell for $20,000. I hung up on him.”

Doonan, the flight attendant, paid $600 upfront with a reseller, which has listed her unit for $18,000 on its website and printed fliers that she’s never seen.

TUG’s Rogers says he knows of no resale company that can guarantee an owner a sale. Customers, he says, should never pay resellers any upfront fee. “They’re so masterful at their pitch,” he says of resellers. “It’s a scam on top of a scam on top of a scam.”

Florida is a hotbed of time-share scams. The state’s attorney general, Bill McCollum, sued two related companies in November, that have allegedly collected more than $4 million monthly in fees from owners who were solicited via Internet advertising and telemarketing calls.

The lawsuit alleges that the defendants — including Universal Marketing Solutions, Creative Vacation Solutions, owner Jennifer Kirk, and Kirk’s brother, Scott Kirk — collected “advertising and/or marketing fee(s) for time-share resale services via a series of false and fraudulent misrepresentations.”

The defendants required “hundreds of consumers” to pay $1,500 each and said they “would market and/or advertise their time share in an attempt to resell it, when in actuality the time share was merely placed on a website, to which no Web traffic was directed.” The defendants also “made blatant misrepresentations … (that) they could definitely sell their time share within a certain time period.” Calls to the companies weren’t returned.

“The secondary market doesn’t have the protections (that are in the primary market),” says Nusbaum of ARDA, which issued a statement applauding Florida’s lawsuit.

Despite their flaws, time shares still have legions of loyal fans. Linda Moore, a property manager in Thorofare, N.J., uses her weeks in Florida as her winter home. She bought her first week at Fort Lauderdale Beach Resort several years ago, and has steadily added to her portfolio by looking for deals in the resale market.

She bought another week in early January for $575 and now owns more than 10 weeks there. “I had people come in and say, “This is a tremendous view,” and I’m saying, ‘Yeah, and it’s all mine.’ “

Post from: Timeshare Blog

Timeshare Owners Fed Up

The accountant from Cherry Hill, N.J., jumped on it, and became one of 6 million Americans who own a time share, shared vacation property that owners get to stay in for a week or so each year for life.

Four years later, the thrill of ownership is gone. Her family has yet to use the one week at Atlantis Harborside Resort she bought, and the contract has become a nagging financial burden at a time when a lousy economy is squeezing her home finances.

Udell is back on Craigslist, this time as a seller wanting to be free from the mandatory annual fees that sustain her ownership. Her bill for 2010 totals $1,650, up 20% from last year plus a $250 charge to make up for “the deadbeats who have abandoned their time shares,” according to Udell. “I can’t deal with the hassle anymore.”

Udell is joining a rising chorus of time-share owners who are fed up with mortgages and burdensome payments that they think render little or no return. With ironclad contract terms, high annual fees and aggressive salespeople, time shares have always been controversial. But this economic downturn has been particularly nasty for the industry. It’s killed the easy credit that was the lifeblood of developers and forced would-be customers to think twice about signing a life-long financial commitment for something they’d use only a few days a year.

Sales are down. Resort development has come to a standstill. Mortgage defaults are rising. Thousands of salespeople and maintenance staffers have been laid off. Customers are flooding the resale market, where some are trying to unload contracts for as little as $1.

Meanwhile, scams that target desperate owners are skyrocketing, triggering enforcement actions from state attorneys general throughout the country. The number of consumer complaints about time shares received by the state of Florida, which is home to a quarter of the industry, doubled in 2009 to more than 2,500, according to the state’s Department of Agriculture and Consumer Services.

“We were always ‘the engine that could’ for the (tourism) industry, but now we’re the red-headed stepchild,” says Howard Nusbaum, CEO of American Resort Development Association, or ARDA, an industry trade group. “We’re going through a tough period.”

There were 1,630 time-share resorts in the USA as of 2008, with 40% of them concentrated in Florida, California and South Carolina, according to ARDA. About 7 million time-share contracts are currently held by owners in the USA. The average price in 2008 was $20,150.

Sales drop, defaults rise

Since they were created in the 1960s, time shares didn’t have a down year until 2008, when sales dipped 8% to $9.7 billion, according to ARDA. They plunged 40% more in 2009 to about $6 billion and will likely remain flat in 2010, Nusbaum estimates.

Time-share mortgage defaults rose each quarter in 2009 compared with 2008, ARDA says. In the third quarter of last year, 2.9% of time-share mortgages went into default vs. 2.2% in 2008. About 8% of time-share mortgages were in default as of 2008. Maintenance fees have grown an average of 12% a year since 2005.

Large hospitality companies, already hurting from empty hotel rooms, are retreating. Marriott International’s time-share sales fell 38% in the first nine months of 2009 to $445 million. It also wrote down $752 million of its time-share resorts’ value, and it said it would discontinue construction of new properties and would convert some to other types of properties.

Nancy Lehenky, a Marriott customer, wishes she could walk away from the $60,000 mortgage she took on last year for a two-week interval at a resort in Palm Desert, Calif.

Lehenky and husband David, who run Flathead Distillers, a vodka distillery in Montana, pay $1,100 a month for the mortgage and $2,000 a year in taxes and fees. While they were able to afford the payment when they bought it, her husband has since been laid off and their decision to open the distillery has forced them to tighten spending. Lehenky particularly regrets having paid full retail price rather than shopping for a resale. “Had I known what was coming in the future, I’d have held off,” she says.

Lehenky asked Marriott to take the contract back last year. The company refused.

ARDA’s Nusbaum says industry woes can be traced largely to developers no longer being able to package mortgage debt as asset-backed securities sold to Wall Street.

Developers have historically lent directly to customers. Cash back from investors on the sale of bundled mortgages was used to build more resorts. The mortgage-backed security market all but vanished in the 2008 financial crisis, and the industry has had to halt most new construction and cut back on free cruises, air tickets and hotel rooms given as incentives for customers listening to a sales pitch.

Westgate Resorts, one of the largest operators in the industry, had a record year in 2009 with about 2,200 new rooms/suites, says Mark Waltrip, COO of Westgate. This year, it’ll open none. The company halted construction on “10 to 12″ properties that have already had groundbreaking, he says.

Remorseful buyers

The industry contends that customer satisfaction remains high and that demand hasn’t waned. ARDA says 50% of buyers already own another time share. And the percentage of people who buy a unit after sitting through a sales pitch remains unchanged at about 10% to 15%, Waltrip says.

Unlike other hospitality or real estate industries, time-share operators dictate much of consumer demand by providing incentives for people to come directly to resorts or to sales-pitch sessions, ARDA’s Nusbaum says. “No one wakes up in the morning and says they’re going to buy a time share. They come in and get compelled by the product. It’s an emotional buy,” he says.

Summers Doonan, an American Airlines flight attendant in Orlando, knows all too well about the allure of a sales pitch conducted next to a resort pool glistening in the Florida sun. She and her former husband, Brian, were invited in 2007 to a free weekend at Ron Jon Cape Caribe Resort in Cape Canaveral and sat through a sales pitch. They walked out with a one-week contract that cost them $18,000. “We were suckered in, and we fell in love with it,” she says.

Having divorced last year and now on unpaid leave from her employer, Doonan wants to sell it. She never got to use her week, because it fell in October when her kids are in school.

Trying to exchange it for other weeks or for time at other resorts, which was her original intent, proved to be a lot more competitive, difficult and expensive than she was led to believe, she says. On top of $1,150 in taxes and fees every year, she pays $90 a year to belong to an exchange club and faces another $200 fee each time she wants to trade. She and her husband have agreed to split paying for the fees until it’s sold.

“Both of us are tight. I have three kids I’m trying to raise as a flight attendant,” she says. “It was a rash decision. You’re surrounded by beauty and the excitement of it all. (Salespeople) are definitely charismatic.”

Brian Rogers, who runs the Timeshare Users Group, or TUG, an online forum for owners, says the growing number of disgruntled, but more informed, customers combined with the financial crisis that has forced developers to cut spending will result in changes in how the industry is run.

The number of ads by owners looking to sell on Rogers’ website is 25% higher than a year ago. About half of the people on his website want to sell their time share, he says. “More people are trying to get out. Some find it difficult even when listing their time share for a single dollar.”

That is not comforting news to Udell. She’s listed her week in the Bahamas for $4,300 on Craigslist, TUG and other sites, but hasn’t gotten any offers. Her husband, Craig, is changing his career to be a teacher and earns a fraction of what he made before, and her family can’t afford annual vacations without going further into debt. “Going on a vacation like that would be living beyond our means,” she says.

‘Scams’ in resale market

Sensing desperation, fly-by-night hucksters are cold-calling and mailing owners with promises of a quick sale for an upfront fee as high as $5,000.

Udell says she’s been bombarded by such solicitations. “They make it very tempting,” she says. “One company guaranteed (it) can sell for $20,000. I hung up on him.”

Doonan, the flight attendant, paid $600 upfront with a reseller, which has listed her unit for $18,000 on its website and printed fliers that she’s never seen.

TUG’s Rogers says he knows of no resale company that can guarantee an owner a sale. Customers, he says, should never pay resellers any upfront fee. “They’re so masterful at their pitch,” he says of resellers. “It’s a scam on top of a scam on top of a scam.”

Florida is a hotbed of time-share scams. The state’s attorney general, Bill McCollum, sued two related companies in November, that have allegedly collected more than $4 million monthly in fees from owners who were solicited via Internet advertising and telemarketing calls.

The lawsuit alleges that the defendants — including Universal Marketing Solutions, Creative Vacation Solutions, owner Jennifer Kirk, and Kirk’s brother, Scott Kirk — collected “advertising and/or marketing fee(s) for time-share resale services via a series of false and fraudulent misrepresentations.”

The defendants required “hundreds of consumers” to pay $1,500 each and said they “would market and/or advertise their time share in an attempt to resell it, when in actuality the time share was merely placed on a website, to which no Web traffic was directed.” The defendants also “made blatant misrepresentations … (that) they could definitely sell their time share within a certain time period.” Calls to the companies weren’t returned.

“The secondary market doesn’t have the protections (that are in the primary market),” says Nusbaum of ARDA, which issued a statement applauding Florida’s lawsuit.

Despite their flaws, time shares still have legions of loyal fans. Linda Moore, a property manager in Thorofare, N.J., uses her weeks in Florida as her winter home. She bought her first week at Fort Lauderdale Beach Resort several years ago, and has steadily added to her portfolio by looking for deals in the resale market.

She bought another week in early January for $575 and now owns more than 10 weeks there. “I had people come in and say, “This is a tremendous view,” and I’m saying, ‘Yeah, and it’s all mine.’ “

Post from: Timeshare Blog

Timeshare Owners Fed Up