The Timeshare Exit Scam
Michael and Lynn (whose names were changed for privacy) bought a timeshare for $40,000 a number of years ago. Their maintenance fee was $2,000 per year.
They got a call, supposedly from Wyndham resorts alerting them that timeshare policies have changed a lot and invited them to a free seminar. They were promised a dinner and a free iPad.
The seminar was a giant scare tactic. They were informed that with the advent of hurricanes and other bad weather, these fees will be escalating. Even worse upon their death, their children will be saddled with these fees. Michael and Lynn didn’t want to burden their kids so agreed to pay $25,000 to get out of the contract. After all, they are getting elderly and probably wouldn’t be able to travel soon anyway.
However, several days later, they found out that the supposed exit company didn’t represent Wyndham nor did they have a contract to terminate the timeshare. Also, Michael and Lynn not only lost their $25,000 but also still had their timeshare and was still responsible for the contract.
Older timeshare owners like these are increasingly being targeted by a growing number of timeshare exit companies who claim that they can release the owners from their obligations for a fee.
Complaints about timeshare exit companies about with the Better Business Bureau and are escalating. So what do you need to know to avoid being scammed.
1Resort companies such as Marriott and Wyndham do NOT partner with with timeshare exit companies.
2While I do understand that many retirees want to exit their contracts especially if they can no longer travel, many timeshares have no value. I have actually seen some being sold for $1 on the internet. The vast majority of owners have no clue that their timeshares are basically worthless in a number of cases.
3If you are trying to get out of a timeshare contract , do NOT pay upfront money to a company or a lawyer promising to help you.
4Safest route: contact either your resort management company or timeshare developer directly. Ask if it has a deed-back or surrender program to free you from your obligation. Companies sometimes allow for surrender of the timeshare, although they may have to prepay maintenance or other fees.
5Don’t be frightened into dumping the timeshare for fear of burdening your kids. Anyone who inherits a timeshare has the option to decline it!!
6Finally avoid paying fees for donation of the timeshare. Some companies that facilitate this charge thousands for this. Even worse, the timeshare donation will probably result in zero deduction since the timeshare is worthless.
Forewarned is forearmed.
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