The Reality of Timeshare Cancellation

SOURCE: Finn Law Group

The Reality of Timeshare Cancellation

There’s no shortage of reasons for a consumer to want to exit his or her timeshare obligation. Similarly, there is no shortage of options that present themselves as viable solutions for consumers eager for a way out of their timeshare interest. A quick web search or “cancel my timeshare” or “timeshare cancellation” highlights hundreds of options, provided by countless companies and organizations located all around the country.

For a savvy consumer reviewing her options, this raises a logical next question: “With so many companies offering to ‘cancel’ your timeshare, which one should you choose?”

In most cases, however, this is not the right approach to cleanly or successfully exiting a timeshare obligation.

What does it mean to “cancel” a timeshare?

Indeed, the team here at Finn Law Group would argue that thinking in terms of “cancelling your timeshare” is counterproductive to actually accomplishing your goal. It’s wrong thinking, manufactured by a shadow industry of backdoor dealers who profit from consumers so desperate for relief that they’ll turn to just about anyone.

Let’s take a step back and reframe the matter a little differently. Rather than asking “how do I cancel my TIMESHARE,” consider asking instead: “How do I get my timeshare CONTRACTS cancelled?” Because, to put it simply, these are two different questions.

When a consumer signs on the dotted line with a developer, they enter into an agreement that is legally binding. Though they may not like it, they have entered into a contract that is completely enforceable and which will, indeed, be enforced, unless fraud can be proven. It’s a legal question, a legal issue – and so you’ll need a lawyer when it comes time to dispute, exit, or nullify that legal contract after the rescission period has ended.

Before committing to a timeshare cancellation company, thoroughly research and ask what exactly this company can and will do for you, the client. In practical terms, what are they actually going to do? What are their methods? The vast majority of these internet-facing companies – when they even provide the services they’re advertising – simply interface with the resort or else charge the consumer to list their timeshare unit on a resale site; neither of these methods offers any guarantee of success, and both can easily be done on your own to the same result, without shelling out to a middle man.

Even redemption companies that have established ties to resort developers can’t genuinely offer a guarantee of success; most of these companies operate by means of informal inventory relationships with resort companies, who buy back bundled interests in bulk. There is never a guarantee that a developer will be willing to take back your interest – depending upon market conditions, your specific interest may not be easily remarketable, and thus offers no value to the developer. And, with all this being said, redemption is still not a genuine cancellation of your timeshare cancellation – you may still well be on the hook for many fees, debts, and interest payments if the deal, such as it is, falls through.

And this is to say nothing of the countless reports we see every year of online organizations promising to cancel, redeem, or resell timeshare interests and contracts, only to disappear altogether after the consumer has paid the upfront fee, leaving the timeshare owner on the hook for their obligation – perhaps with the added burden of even more debt.

The bottom line is that contract disputes are always a legal issue, so we firmly maintain that you should go to lawyer. A licensed attorney is only beholden to you, his or her client, and not to the interests of a third party or to the resorts themselves. The most important thing is that you’re being taken care of. Just about any licensed, legal professional is a better option than a private company making big claims about cancellation, which so often amount to little more than hot air and hucksterism.

How Do I Get Out of My Unwanted Timeshare Contract?

When asked for their perspective about timeshares, 76% of current owners expressed some kind of buyer’s remorse about their interest. And while that number may sound high, anecdotally speaking, this result is fairly unsurprising.

After all, search the internet for even a few minutes, and you’re bound to come across countless stories and questions from current timeshare owners looking to permanently cancel their timeshare contracts after their brief rescission period has ended.

Maybe it’s been a year. Maybe it’s been decades. But the fact remains – many consumers want relief from their timeshare obligations, only to find themselves stuck.

So, why do so many consumers want to find a way out of their timeshare contracts in the first place – and what avenues for relief may actually net them the lasting results they want?

Why Do Many Timeshare Owners Want to Cancel Their Contracts?

Certainly, there are countless valid reasons why a consumer may want to find a way to negotiate an exit from his or her timeshare obligation.

For instance, perhaps she feels trapped by the rising annual maintenance fees that are part and parcel of timeshare ownership. According to the same study we referenced earlier, maintenance fees and other rising costs accounted for the single biggest factor driving timeshare owners away from the industry. Nearly half (46%) of consumers who wanted to exit a timeshare obligation cited “too high” maintenance fees as their most important reason for exiting.

Setting aside the fact that resort maintenance fees tend to rise, year over year, separate from the rate of inflation, many timeshare consumers grow to resent keeping up with their interest payments, hefty fees, and regular assessments on a vacation week that they may feel challenged to ever use. Anecdotally speaking, many timeshare owners cite booking or reservation issues as a major reason they no longer want their interest; for others, lifestyle changes (divorce, money issues, health complications) make it impossible to keep using their interest, even if they are satisfied with their resort experience.

The fact of the matter is that there are many legitimate reasons why a timeshare owner may wish to extract themselves from an interest – and yet many find that getting out from under their timeshare obligation is much more easily said than done.

Options for Consumers Seeking Timeshare Cancellation or Relief

So, with all that in mind, what are the avenues for consumers looking to end their commitment to their timeshare legally? Let’s look at a few of the options that many consumers pursue, once they’ve realized that they no longer wish to retain ownership of their timeshare interest.

The Timeshare Resale Market

Owners may first turn to the timeshare resale market online or in the classifieds – only to find that simply selling off their interest won’t be as easy or lucrative as they may have anticipated. In fact, it is not uncommon, as our own Michael Finn once discussed with Credit Card Guide, to see timeshare owners listing their obligations for as little as $1 on sites like eBay, with many owners even offering to pay the buyer’s transfer or closing fees in full.

Why is it often so difficult for an owner to sell their timeshare on the aftermarket? As Michael has noted before, timeshare development companies have long kept a tightfisted control over the secondary resale market out of fear for their bottom line – though, as he points out, this restrictive strategy likely disadvantages both consumers and the sustainability of the industry itself, in the long term.

In the absence of the thriving aftermarket that we see with many comparable consumer goods – from vacation houses, to RVs, to automobiles – developers tend to exert a lot of control over current timeshare owners. Many sternly recommend (or require) that consumers interface with a resort-approved “resale company,” which will often require an upfront fee to “list” the interest on a website – where it may be hard, if not impossible, for a consumer to accurately determine who will see it. With that said, many resort developers also reserve the right to restrict timeshare resales as they see fit; even if they do allow a sale to go through, they may also limit the new owner’s ability to fully take advantage of their interest, by, say, curbing their access to the exchange market.

Relief and Redemption Companies

Timeshare relief and redemption companies, many of which work by means by means of exclusive partnerships and deals with resorts and inventory aggregators, similarly tend to require a high upfront fee – meaning that there’s essentially no way to be sure what the company will be able to deliver before you pay them.

These third party companies can be slow to act and unresponsive, and eventual success is far from a certainty. With the market as oversaturated with inventory as it is, there’s simply no guarantee that developers will be interested in retaining your particular contract, at any given time.

Many of these redemption and transfer companies also tend to come and go from the marketplace, so your chosen service may well fold and disappear before your business is concluded. In other cases, scammers simply use the idea of a redemption, resale, or donation company as a front, to quickly bilk desperate consumers out of an upfront payment and then vanish into thin air.

The Timeshare Rental Market

At this point, a consumer may have been swayed away from attempting to sell or cancel their timeshare obligation, and instead look into renting out their timeshare. At the very least, many figure, this can be a way to help shoulder the financial burden caused by annual fees.

While renting can be a viable option, it will force many consumers into the virtual world of message boards and chat rooms. In many cases, this virtual “wild wild west” can be full of misleading information and false leads (at best) and yet another group of predatory scammers looking to make a quick buck (at worst).

What’s more, the timeshare rental market can be highly competitive – as we’ve discussed, there is quite a lot of unwanted inventory already floating around the marketplace, and travelers have more options for finding inexpensive accommodations than ever before. Timeshare owners may not reap enough financial rewards from the rental process to successfully cover their ongoing interest payments and their steadily rising annual maintenance fees.

Bringing on an Attorney

In cases where consumers feel trapped and entirely overwhelmed by their timeshare obligation, consulting with a timeshare attorney may be the most viable option for permanent, lasting relief.

In any case, a timeshare owner’s first move should always be to reach out to their resort developer and management company, to see if it’s possible to negotiate release from a contract or to see if the company has a cancellation or “take back” process in place.

With that being said, many consumers find that having a legal professional on their side during this negotiation process offers significant advantages, for many reasons.

For one thing, an attorney has a professional obligation to represent his or her clients – meaning that they are not beholden to the wishes and financial influence of the resort developers, as so many third party relief and resale companies inevitably are.

What’s more, having a qualified legal professional in their corner may well offer consumers a number of practical advantages when it comes to negotiating with their resort company.

For instance, an attorney has the ability to review and dispute contract clauses, and can pursue litigation as a strategy, if it is warranted. The ability to pursue litigation on the consumer’s behalf can be a remarkable tool for leverage in negotiations.

Similarly, only an attorney may reasonably suggest the use of strategic default as a strategy, allowing the consumer to stop making payments in order to gain leverage in their negotiations with the resort. Under FDCPA, a consumer can be shielded from third party debt collectors as long as he or she has retained an attorney; instead, the debt collector must contact the attorney, unless the attorney fails to respond or grants the debt collectors explicit permission to do otherwise.

As we have shown, the path to relief for the timeshare consumer may be a long and winding one, studded with dead ends and pitfalls. One way to evade many of these dangers is to recognize that you have a significant legal issue with important legal ramifications, and to act accordingly.

At Finn Law Group, our team has years of experience working on the behalf of the consumer in negotiation with major resort companies. We have worked to achieve practical results for our clients in a timely manner, by means of aggressive representation in direct resort negotiations, state and regulatory filings, and litigation.

Desenvolvido por: EBGE - Editora Brasileira de Guias Especiais | (81) 3097.7060 | sac@ebge.com.br