Timeshare Scams

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.’ “

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Timeshare Owners Fed Up

I was browsing though the internet as I often do to find out what is happening in the timeshare industry, and I got side tracked by fumbling on another timeshare assistance company. their name is called TimeshareB-Gone. I have no problems with competition and I believe that is what makes our country so strong.The issue I have is that this company has a website that has got many issues. They used one of my pages without permission. I do not mind any site using information from my site, but at least give me a heads up and ask. I made this mistake myself and when I was called out on it, I changed my wording immediately. If that is not bad enough, this company has used The Owners’ Advocate links for almost all of the links on their site.

TimeshareB-Gone has even used The Owners’ Advocate page for an initial consultation. So, if anyone asks for assistance, it goes to TOA instead of TimeshareB-Gone. I know that TOA will be all over this as well as a few blog writers out there. Note to all start-up companies, do your research before you post any site. Like I stated previously, I made the mistake of posting data on my site that was verbage from TOA and I changed it immediately after being notified.

Another thing that I would like to point out is TimeshareB-Gone states that they have received a high volume of complaints already from various timeshare companies. The problem with this statement is that they just started their website, but the BBB has this company listed in Florida since 2004. Something appears to be strange with this company and I would advise anyone looking into this company to stay away until they define themselves and come clean with who they are.

I do not think you can trust anyone on the web who does not identify themselves. This company has no data on who they are and what their credentials are except that they are located in Hendersonville, Tn.

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Who is Timeshare B-Gone?

Today we are going to discuss the reasons why you might want to consider canceling your timeshare contract. Many have been inquiring into whether or not they should cancel their timeshares and most are not sure of the reasons, and resources that are available out there. If you have doubted your timeshare purchase, you might want to read further.According to ARDA, American Resort Development Association, timeshare sales increased from 2006 to 2007 by 10.3 percent and total sales in 2007 was $6.1 billion. That’s right, BILLION! In 2007 there were more fixed and floating weeks sold than points. This puts to rest the scam of sales reps stating that within a certain amount of time points will be the only product developers will sell. That is simply not true and not supported by any statistics. The average price in $2007 for a week was $19,247. Remember that was in 2007. This price was on average 14 percent higher than in 2006. In 2008 the average price for a timeshare in the United States was $20,152, an increase of over $900.00. In 2008 sold $9.7 billion, an increase of over $3 billion in one year. The majority of timeshares are in the state of Florida and on or in close proximity to a beach.

What does all this mean? Well, it tells you that timeshares are a popular thing in our culture. It tells you that sales are increasing and because of that, prices are increasing as well. Does this say that timeshares are a bad thing? Not at all. this tells you that anything that has value like this is going to have a huge sales campaign and strategy to get the consumers to the product and hungry for the product. Now that we have all the statistics, let’s get to the meat of this blog article.

What are the reasons that one might consider canceling their timeshare? Here is a simple list of 10 items that if happened, you should investigate canceling the deal.

1. A very long and aggressive sales presentation. Timeshare presentations/tours are supposed to last anywhere from 60 – 90 minutes before the people touring can get their gifts that were promised to them. During this process the sales representative is supposed to build rapport, gather information, and create desire for the customer. They will take you to the models, and ask questions about how you vacation and what you are currently spending. This process should last approximately 45 minutes, which will give them time to show you two options based on how you travel and what you spend. Once that is done and you “puke” at the cost, they will bring in their manager to attempt to get a better deal. You know the one that they bent over backwards for and that is so low that you can never return to get again. I have heard of timeshare tours lasting as long as 10 to 12 hours. That is not a tour, that is being held hostage. If you told them no several times and were there over 4 hours, you might want to really look further into what you have done.
2. If you took a timeshare tour and did not get the gifts that were promised to you, that is completely against every states timeshare regulations and you need to really consider canceling the deal. Any timeshare company that would do business on the front end like this is not a credible company. Just the same as starting a relationship off on a lie. The normal person would not stand for that, and it is a reason to really believe that this is just the start of more bad things to come.
3. If at any time the sales representative starts discussing timeshare ownership would be an investment, they are crossing an ethical line. If this has happened to you, this is a huge red flag and is totally illegal in the US, Canada, and Mexico. This goes against the Federal Trade Commission’s regulations concerning timeshare sales.
4. If you were promised to make a certain amount of money off of rental, your sales rep has crossed the ethical line. They can tell you that you can rent your timeshare out, but they cannot tell you that you can make a certain amount and they should not tell you that they can show you secrets to do this. This is probably the number one breech in ethics that we see. If this has happened to you, get advice.
5. If you were told that you can write trips off on your taxes, or owning will give you a tax break, get assistance. This is completely illegal and timeshare sales reps know that they are not allowed to provide any tax advice. They are allowed to say that you need to seek advice from a tax professional.
6. If you were never told that you have a right under state law to cancel your timeshare and what the cancellation period is, you want to seek advice. This is the consumers right and has to be given.
7. If you were told that because of a certain reason, no matter what the reason is, that you cannot cancel and all sales are final, get advice. Again, you have a right to cancel within the states cancellation period.
8. If you were told not to read the documents and to just sign them and read them later, that is a red flag. Any credible timeshare closing agent will want to take the extra 30 minutes and ensure that you completely understand what you are signing and what your rights are. If you did not get this, seek advice.
9. If you were told that you will never have to pay maintenance fees because of their referral program, or that maintenance fees will never go up, get advice. Many timeshare sales reps will short cut and state this instead of taking the time to explain how maintenance fees work and why they are needed. If you were told this, you might want to investigate.
10. If you were told that you will never have to pay exchange fees, and that you can exchange anywhere without any constraints, seek advice. This is another tactic that the weak sales rep will take instead of taking the time to explain how the exchange program works. You have some places because of location and size that are very difficult to get to and can take up to 2 years in advance to make the reservation.

This is not an all inclusive list. There are other areas that sales reps use to get you to think that you are getting more than what you actually are, but these are the most common. If you have 3 or more and have purchased within the last year you need to contact a timeshare assistance company for advice. As far as timeshare assistance companies are concerned, click here for more information.

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Why Should I Cancel My Timeshare

Many travelers who go on vacation and take timeshare presentations often make the mistake of purchasing a timeshare based off the emotional high they are getting while on vacation. They normally go on the presentations because of a free gift that they are promised. The timeshare presentation was supposed to last 90 minutes, but end up lasting over 4 hours. They are never told they can cancel and when they get home and are having that feeling of buyers remorse, they find out that they could have canceled, but are now past the cancellation period. Does this sound like you?Timeshare Advocacy International, LLC has helped many who have fallen victim to poor sales tactics and were lied to, coerced, misinformed, or misrepresented. You need to know that you can cancel your timeshare contract even if you are past the cancellation period. There are timeshare assistance companies that claim to have a 100 percent success rate, even though the BBB says other wise. There are companies out there that claim the BBB is a ripoff and are not to be trusted. That makes no sense whatsoever. I use the BBB before I ever make a decision to do business with a company and have always gotten the best insight possible. You can even call if you are still unsure and they will give you all the information that you may need. For anyone to call the BBB crooks and say that they are not a useful organization is trying to hide something if you ask me.

One thing I have learned after serving 21 years in the Navy is that everyone has a different definition of integrity. Integrity is not claiming that you can help anyone when you cannot. Integrity is not claiming that you have credentials with the Federal Trade Commission, US Attorney General, and Profeco when you do not! Integrity is not claiming that you are the FIRST and only professional consumer advocacy group to successfully effect the termination of hundreds of Timeshare and Vacation Ownership contracts nationally and globally when you are not. There are documented companies that have been around longer and that have better results. This company claims that they had to use alias’ because they were afraid for their families. What a load of rubbage. I am running off on a tangent, there is integrity, then there is everything else period.

Now, to get back on track, if you have a timeshare that you purchased within the last year and feel that you have been lied to, corced, or misrepresented go to Timeshare Advocacy International and request a free initial consultation. It costs you nothing and if we cannot help you, we will tell you up front. WE WILL NOT TAKE YOUR MONEY AND RUN! There is a company out there who has that reputation. You can make all the new and creative websites and claim to be there for the people, but once a shark, always a shark!

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How to Cancel Your Timeshare Contract

Due to the tightening economy and recent news concerning timeshare developers going bankrupt, timeshare owners are looking for any reason possible to get out of their timeshare contract(s). I want to give you a realistic view from someone who is in the business of canceling timeshares.There are many timeshare assistance companies that claim they will get you out of your timeshare contract no matter how long you have been in it. All you have to do is pay anywhere from $500.00 to $2500.00 and they “guarantee” to get you out. I wish that was really the case. In order to get out of a timeshare contract, you have to prove that there was misrepresentation, fraud, coercion, or some type of misinformation. That part is pretty simple. The following are reasons that can justify a reason for cancellation:

1. Not informing the customer that they have the right to cancel within the states/country rescission period.
2. Not conducting a proper sales presentation, i.e. not showing you the models, not gifting you at the end of the presentation.
3. Using misleading information to get you to make a decision. Telling you that you will earn a certain amount of cash $$ for your rental, giving tax advice, or that the timeshare is an investment and you can make money when you go to sell it.
4. Not showing and disclosing the Public Offering Statement.
5. Using coercion as a sales tactic. Keeping you on the tour for an extended period of time without letting you leave with your gifts. Some will not sign your hotel voucher, while others will not give you the cash or other gifts that you were guaranteed prior to the tour.
6. Not conducting a proper closing of the timeshare contract and other documents.
7. If the sales rep misrepresents themselves, like stating they do not get paid a commission and are only there to ensure you get the proper information. They normally will state that you are not on a sales presentation. This is more for existing owners.
8. Making any promises other than what is in writing to get you to buy.
9. Making bribes of any type to get you to buy.
10. Giving false information on pricing, financing, maintenance fees, and exchanges.

This is not an all inclusive list, but just 10 of many. Here is the other piece of the puzzle. You need to make these issues known and make formal complaints in a reasonable amount of time. I will tell you that if you are over 6 months, it is difficult to cancel, but depending on the reason(s) it definitely can be done. If you are over a year, you better have a rock solid case, and there are few. You might be able to get the contract canceled but you will not recoup all your money. Anything over 2 years is a waste of time. Now, there may be the exception to the rule. but normally you have used the timeshare, and have made numerous payments. It is almost impossible to prove any type of fraud, misrepresentation, or coercion that far out. Think about it. If you purchased a used car from a slick, smooth talking salesman and you try to go back two years later, you are going to get laughed at. Additionally, no judge in this country is going to allow that to come across their bench.

I genuinely feel for anyone who has been a victim to anything other than legitimate sales practices, but that does not give you a reason to cancel after a reasonable period of time. After two years, you have to make a decision to either keep it and learn how to make it work; stop paying and let it go into foreclosure; or find someone to buy it. The last option is the least likely to happen.

Again, I want to help anyone who has been a victim. The bottom line is that if you have owned for over a year and have not brought the issue up to the timeshare company or any other agency, you really do not have a chance of winning your claim. If you do, you are the exception and not the rule. Please, do not fall for the scams of companies telling you that they specialize in anyone in this range. The facts are the facts.

If you have any questions visit Timeshare Advocacy International for more information. I still will answer any questions from those who are over a year from purchase, but I will most likely not take your case.

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Timeshare Cancellation News