For a clear idea of how the timeshare industry affects real people, start right here in the Show-Me State.
After being lured into a presentation with promises of a free, two-day stay and unlimited travel to different timeshare destinations, Christine and Rick Miller of Cedar Hill, along with their young children, are now thousands of dollars in debt, stuck with bad credit and two timeshares they don’t use. They say that the developers they bought timeshares from added on undisclosed fees and claimed it would be easy to exit those timeshares.
The Millers are not alone. Their story echoes countless others who’ve struggled with the emotional and financial burdens of an unwanted timeshare contract. Many of these people live and vacation here in Missouri, where locations like Branson are timeshare hot spots.
You may have seen recent reports by Missouri’s Better Business Bureau about individuals who were scammed by bad actors in the timeshare exit industry. However, these types of cases represent only a fraction of timeshare-related frustrations from consumers, the majority of which stem directly from the perceived deception from timeshare developers themselves.
Individuals purchasing a home traditionally have support from a home inspector, Realtor, lender and lawyer, yet in the process of purchasing a timeshare, sales representatives often steer individuals away from professional guidance, pushing them instead to sign on the spot with no real opportunities to think through the consequences of such a gigantic financial commitment.
These high-pressure tactics are prevalent in a timeshare industry that is massive. With more than 9.5 million households currently owning one or more timeshares, the industry earned more than $10 billion last year.
The average price of a timeshare interval is nearly $22,000, according to the American Resort Development Association. If a consumer takes out a 10-year mortgage at up to a 17.9% interest rate, they would end up paying $41,000. Additionally, owners are responsible for consistently rising annual maintenance fees, which average $1,000 and last for the lifetime of the contract.
Despite contrary claims from developers, the timeshare resale market is dormant. Many timeshares are impossible to sell and others are only worth 10% of their original purchase price. The only reason exit companies (like the one I founded in 2012) exist in the first place is because developers are so reluctant to let people out of their contracts and don’t have reliable exit programs.
This year in Florida, the industry lobbied legislators to adopt anti-consumer legislation that would’ve prevented owners from contacting a lawyer to terminate a one-sided timeshare contract. The effort promptly failed. In Arizona, lawmakers approved consumer-friendly legislation that was opposed by major timeshare developers. But because of powerful lobbying efforts, it was watered down before it was signed into law.
Branson Mayor Karen Best called on Missouri to add more regulations on timeshares after the St. Louis Better Business Bureau noted the industry’s “deception, pressure and traps disguised as vacations.” More bills from both reform advocates and timeshare allies alike will probably surface in the coming months.
Relying on state legislatures to tackle this issue one-by-one could take years, if not decades. Crucial and effective action will only rise from heightened awareness, which is why the Coalition to Reform Timeshare was launched earlier this year.
The coalition is working alongside legislators and consumer advocates to fix this industry and make it more consumer friendly. As part of this, the coalition brings to light stories of timeshare owners who have personally dealt with the greed and deception that at this point seems baked into developers’ business practices.
Priorities include solidifying the right to unilaterally terminate an unencumbered, non-deeded timeshare; the right to record a timeshare company’s entire sales presentation; freedom from any high-pressure sales techniques and verbal misrepresentations; and the right to a 24-hour cooling-off period prior after signing a timeshare contract.
This industry is in dire need of reform, and countless Americans are in need of assistance. Timeshare developers and politicians across the country — beginning right here in Missouri — shouldn’t delay another minute in holding this industry accountable.
Brandon Reed is a consumer rights advocate and founder of the Coalition to Reform Timeshare.