Archive for the 'Trap in Timeshares' Category

Attorney General Bill McCollum of Florida Warns Consumers

Friday, January 30th, 2009

Attorney General Bill McCollum
News Release
July 13, 2007

Media Contact: Sandi Copes

Phone: (850) 245-0150

Attorney General: Beware Foreign Timeshare Investments

~ Advisory follows increase in number of complaints reported to the Attorney General’s Office ~

TALLAHASSEE, FL – Attorney General Bill McCollum today issued a consumer advisory, encouraging Floridians to be cautious when booking timeshare reservations or vacation memberships in foreign countries, particularly Mexico. The Attorney General noted that his office has received an influx of complaints from citizens who have been scammed by less than reputable travel companies offering ideal vacations to these locations but often falling far short of operating under fair business practices.

( Click Here to READ FULL ARTICLE )

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NEWSWEEK – The Trap in Time Shares

Saturday, January 17th, 2009

The Trap In Time Shares

Warning to all vacationers who-on impulse let a sales agent talk them into buying a share. It’s easy to love these holiday , but only as long as their pleasures suit style of life. If your taste ever changes, a time share can hang around your neck like an albatross. In most cases, there’s no certain way of pulling free.

One reason time shares are so popular is their close fit with the baby boomers, who want a family vacation spot but can’t afford a home of their own. Instead they buy a slice of a home-say, a single week at a summer resort. Led by luxury offerings from such brand-name hoteliers as Disney, Marriott and Hilton, U.S. sales this year are expected to reach a record $2.5 billion.

Price tags on new time shares are not low. Two-bedroom units average $9,500, up to a top of $18,000. Annual fees (for maintenance and taxes) average $350 and can reach $770. But you’re not locked into the place you buy. Swaps can be had for a similar week at a unit somewhere else.


So what’s not to like about this deal? Mainly, its perpetuity. At some point in the future you may not want this holiday anymore-because your children are grown or your spouse has died. But you can’t store a time share down in the basement next to your dusty exercise bike. Annual maintenance fees continue. To escape them you have to sell-and that’s when you learn that a time-share resort is easy to join but tough to leave.

_B_A glut:_b_At many resorts, “used” time-share weeks are a glut on the market. In almost all cases, they can’t be resold for anything close to what you paid. You’re doing well if you get even half the original price. Where there aren’t a lot of weeks for sale, you might luck into 80 percent or more. But time shares in older, less spiffy resorts, or in undesirable weeks of the year, often draw no bids at all.

That stands in sharp contrast to the pitch of many sales agents, who lead you to think that resales are easy. Officially, the industry deplores that line. “Time shares should not be purchased for investment or resale,” says Tom Franks, president of the American Resort Development Association (ARDA). Developers who permit salesroom hype are playing a hypocritical game: tsk-tsking the deceptions in public while privately hauling money to the bank.

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New York Times – TIME-SHARE RESORT INDUSTRY EXPERIENCING GROWTH PAINS

Friday, January 16th, 2009


TIME-SHARE RESORT INDUSTRY EXPERIENCING GROWTH PAINS

Published: September 27, 1981

Time-sharing, the new rage in vacation real estate, has attracted thousands of satisfied customers across the country. But left strand ed on the beaches and slopes are some unhappy buyers, who in the worst cases, lost all their money.

Some 300,000 families, mostly middle and upper income people, have bought time-shares since the concept of purchasing rights to a hotel or apartment unit at a resort for a specific week or two each year was introduced in this country in the late 1960’s. After a slow start, the industry began to expand dramatically in the mid-1970’s.

In the last six years, the number of time-share resorts in the United States has grown from 45 to about 550, according to Carl Burlingame, author of a magazine on time-shares and a book on the subject.

Industry surveys show a high satisfaction rate among time-share owners – 82 percent. A major attraction is the inflation protection that comes from locking in a portion of the family’s vacation costs for the next 20, 30, 40 or more years.

Moreover, as the industry has grown in size and sophistication, it has attracted major institutional lenders as well as first-class developers.

The industry’s success, however, has not been accomplished without charges of fraud and deception. The most well-known incident in the industry involved the old Stanley Hotel in Estes Park, Colo., where 2,100 people bought time-shares before the developers went bankrupt in 1979. At an average price of $5,000, the purchasers were buying rights to new, luxurious condominium units around the old hotel. The units were never built. however. A court appointed trustee has tried to find another developer to take over the project.

In July, New York Attorney General Robert Abrams sought to bar sales in New York of time-shares from Tree Tops, Inc. in the Pocono Mountains of Pennsylvania because of the company’s failure to register in New York. As part of the consent judgment in the case, about 550 New Yorkers who bought time-shares at Tree Tops will have the opportunity to get their money back. Units at the resort sold at prices ranging from $3,500 to more than $8,200.

Harry F. Lee, Tree Tops’ Pennsylvania attorney, said the company plans to properly register in New York. He said Tree Tops had written to Mr. Abrams’s office asking about requirements in New York, but never received an answer.

After consulting with New York lawyers, Tree Tops took the position that it was not selling real estate, but pre-paid vacations and it need not register in New York. Like some other time-shares, Tree Tops owners do not take title to a deed.

Mr. Lee said Tree Tops decided against time-consuming litigation and chose instead to agree to stop sales to New Yorkers and offer refunds.

Earlier this year Mr. Abrams’s office got the court to bar the sale of time-shares on the cruise ship ”Romance.” The attorney general contended that Little Cruise Ship Ltd., based in San Diego, and the company’s agent, Carlino & Phillips Advertising Inc, of Plainview, N.Y., misled buyers about the size and capabilities of the ship and failed to register properly.

Robert S. Robbin, assistant attorney general in charge of the Bureau of Real Estate Finance, said that complaints about time-shares are growing, reflecting in part the recent change in law allowing time-share sales in New York.

”The sales procedures are aggressive and that’s going to generate complaints,” he said. Time-sharing is ”still in the early stages and we’re trying to avoid problems by stopping problem practices early.”

Last month, a Federal judge in South Carolina sentenced John G. Mitchell, a Nashville lawyer, and Harry Morgan, a Tennessee businessman, to 15 years in prison for their roles in a time-share scheme. The men are appealing their convictions on conspiracy and mail fraud charges stemming from the sale of time-shares for a resort in Myrtle Beach that was never built.

John Clifford Ryan, an assistant U.S. Attorney in South Carolina, said investigators found about 127 people who had purchased timeshares in the promised project, which was called Resort Club Vacation Inc. Units sold for about $4,600.

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SMART MONEY’S ARTICLE – Escape from Timeshare Hell "

Thursday, January 15th, 2009

Escape From Timeshare Hell

Updated on November 5, 2007.

DESPITE THEIR UNWILLINGNESS to travel just weeks after the Sept. 11 terrorist attacks, Dowell Multer and his wife made the trip to their mid-October timeshare at the LaCabana Beach and Racquet Club in Aruba. “Things had changed a lot,” Multer says. “It was a much quieter place.” The couple vacationed there for two more years before deciding they did not want to return.

But after three years on the market, Multer, who is now 73 years old, still hasn’t found a buyer. Granted, there was interest from companies that specialize in timeshare resales, but they all demanded hefty upfront fees. “One person wanted $1,500 upfront and swore up and down it’s a great market,” Multer says. Another asked for $599, promising to advertise the property world-wide. A third wanted $300. Multer politely declined. Yet, with the $900 maintenance fee due each year, he’s desperate to sell. “Right now, we would be very happy if we could just give it away to somebody,” he says.

The Multers aren’t alone. While there are no official statistics on the number of timeshare owners looking to unload their investment, the sheer size of the marketplace suggests there are thousands — if not hundreds of thousands — of unhappy timeshare owners looking to get out.

With timeshares, you typically buy the right to stay at a resort for a week each year, as long as you live. (And because this is a deeded property, your timeshare will be passed over to your heirs after you die.) That may sound great at the developer’s presentation: Buying a timeshare from the developer directly usually comes with incentives like discounted weeks at the resort or free lunches, and is often something of an impulse purchase. But it also means you’ve bound yourself to an annual maintenance fee, which can run as high as $1,500 and can increase if the timeshare management decides to do improvements upgrades on the property.

Needless to say, life doesn’t always agree with such arrangements. People’s circumstances change and, for one reason or another, they can no longer use their timeshares. That’s where reality kicks in: Selling the timeshare is tough. Unfortunately, recouping your original costs — especially if purchased from the developer — is next to impossible.

Successfully unloading your property is a matter of adjusting your expectations and knowing what your options are when it comes to the sale. Here’s some advice:

Start with your resort
When trying to sell your timeshare, going to your resort is a logical first step: Some resorts have buy-back programs, where they will offer to buy your timeshare week or points at a certain price. The practice, known as “right to first refusal,” is meant to help preserve the value of timeshare properties, explains George Marine, a real-estate investor and timeshare owner from Long Island, N.Y. What it basically means is that if you want to sell your timeshare, the resort will offer to buy it back at a certain price, typically lower than the purchase price but still higher than what the owner may get at the resale market. While most brand-name resorts — such as Disney and Marriott Vacation Clubs — have right of first refusal clauses in their contracts, how often they exercise it will vary by resort.

If your resort doesn’t have a right of first refusal or any other resale program, they may at least refer a reputable broker or resale agent.

Find the right marketplace
However you approach the resale of your timeshare, one thing’s for sure: Never pay an upfront fee to a broker. “This is a wide-scale scam,” says Caroline Lindholm, president of the Greater New York Timeshare Owners’ Group (GNYTOG). “There are so many agencies out there that will take $395 or so, and promise you the moon. And the prices [they say you can get for your listing] are totally unrealistic.”

Pat Teal, a 72-year-old timeshare owner from Myrtle Beach, S.C., learned that the hard way. Back in 2003, she contacted several resale companies about selling her timeshare at the Fairfield Beach Ocean Ridge in South Carolina. She was quoted a $300 upfront fee, which she paid using a credit card, and a $200 commission after the sale was complete. But two months later she called to inquire about any interest in her property, and the company had disappeared. “I kept calling and calling, but I couldn’t get a hold of them,” she says. (According to Better Business Bureau records, the company — Freedom Resorts International in Hudson, Fla. — has gone out of business.) Teal figured out her $300 fee was a lost cause, but imagine her dismay when her credit card was charged another $200. She appealed the charge with the credit-card company and her $200 was refunded, but still, the experience was sobering. “I would be more than happy to pay a commission, once the timeshare sold, but I hesitate to pay money upfront again,” she says.

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Confessions of a time-share salesperson from CNN.com

Thursday, January 15th, 2009

By Lisa Ann Schreier
Budget Travel

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(Budget Travel Onlineexternal link) — The slick, fast-talking time-share salesman still exists. He may no longer wear a lime-green leisure suit, but he’s solely focused on the sale — and he’s largely the reason the industry has a less-than-stellar reputation. Some salespeople talk, talk and talk, and never listen to the client. There’s no shortage of unseemly tactics, with questions like “Don’t you think your children deserve better?” I’ve seen a salesperson give a tour of one time-share and then at the last minute try to sell a property in another part of the country. To avoid falling for a trick, pay close attention and never let a salesperson tell you what you want.


A scripted pitch

Although time-shares each have their own phrases, and salespeople have leeway to improvise, there are certain steps all staffers are trained to follow. The script begins with a Greeting; moves on to the Intent, in which a client hears what’s going to happen during the presentation; and then gets to the Warm-up, which is basically small talk. At some point, the salesperson will steer the conversation to the Product, with an introduction to terms such as “fixed week” and “floating week,” before proposing a Vacation Problem Solution in the form of a time-share purchase. Depending on the salesperson, the steps might feel like natural conversation or an extremely awkward blind date.


The puke price

Asking the client to buy is the final step. The salesperson will show a price sheet, often with a figure known as the “puke price” because it’s so high, it’ll make a client feel sick. Shortly afterward, a sales manager — whom insiders call a T.O., as in Take Over — will come in and say something about how that’s the price for anyone who just walked in off the street. The T.O. may then say, “I’m not supposed to show you this . . .” or “We have a special inventory that’s going to sell fast . . .” and offer a much cheaper price — what we call the Nosebleed Drop. Personally, I hate the whole game. It’s a crock. If you want to avoid the gimmicks, insist up front that salespeople show you one price only. If they don’t deliver on this, walk away.


Fuzzy math

I remember how one salesperson used to describe hotel price inflation to an unsuspecting client. “If you pay $100 for a typical hotel room today,” he’d say, “and figure an annual inflation rate of 10 percent, that means that in 10 years, that same hotel room will cost you $1,000!” Actually, even if such inflation occurred, the amount would be $260 in 10 years. Be doubly sure to check the numbers when it comes to financing and monthly payments. In fact, avoid the developer’s financing, which is typically a rip-off. You’re better off finding financing on your own.


No means no

I sincerely believe that for the right people, buying a time-share is a legitimate alternative to paying for hotels year in, year out. But if you’re really not interested in investing in a time-share, don’t waste your time at a presentation. In my opinion, the discount you receive on lodging and entertainment is not worth the few hours of vacation you’re giving up to hear the sales pitch that goes along with the deal. That said, if you’re curious enough to listen to the pitch and decide a time-share isn’t for you, just tell the salesperson so as firmly and plainly as possible. But salespeople don’t give up easily: You may have to repeat yourself a half-dozen times before the message gets through.

Lisa Ann Schreier was a time-share salesperson and manager in Orlando for six years.

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The Timeshare Prizes

Thursday, January 15th, 2009

Piney Shores is part of a Dallas-based time-share outfit called Silverleaf mail fraud and conspiracy charges for the way it ran its time-share contests. looking for upper-income families to sign up for their time-share deals, The last thing they wanted was for anyone to spend time thinking about it. .. well take a look at what happened … at TIMESHARE PRIZE PROMISES !!

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