Florida’s latest timeshare battle pits developers against relief companies. Are there any winners?

This is just the latest in a long history of controversies arising from the timeshare industry.
A proposed law would make it harder for third-parties  to help owners get out of their timeshare contracts. [Times (2004)]
A proposed law would make it harder for third-parties to help owners get out of their timeshare contracts. [Times (2004)]
Published April 5
Updated April 5

At best, the timeshare industry has a spotty reputation.

Nearly everyone knows someone who feels like they got duped by a slick timeshare salesman peddling inexpensive vacations. Someone stuck with a so-called investment that feels more like a financial death spiral.

There are so many disappointed timeshare owners that a counter-industry sprung up to help them. The timeshare exit providers charge thousands of dollars for their services and lots of people are quick to pay.

But too many of the companies are calculating, criminal in some cases. They are happy to prey on the uninitiated. Consumers need Gary Cooper in High Noon. Instead, in strolls Leonardo DiCaprio from The Wolf of Wall Street.

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“It’s frustrating that both developers and relief companies don’t always have customers’ best interests in mind,” said Brian Rogers, who runs Timeshare Users Group, a network of about 100,000 timeshare owners across the nation. “But both will shout from the rooftops that customers are No. 1.”

For years, the timeshare industry has offered vacation-goers free hotel stays or gift cards if they agree to spend 90 minutes hearing a sales pitch. Millions of people sign on the dotted line, buying a piece of one or more vacation properties, often in sunny locales like Florida.

Many are happy with their purchase. But many aren’t. A decade ago, the Florida Attorney General’s Office was getting more than 8,000 complaints a year. With some needed changes, the number has fallen to 1,600. The Florida Department of Business and Professional Regulation received about 1,250 complaints a year, still high compared to other industries.

The dissatisfied complain of high-pressure sales tactics and lying salesmen who offer paradise but fail to deliver. The investment will increase in value, they’re told. You can easily sell it when the time comes.

In reality, many owners grumble that they can’t sell even at deep discounts. Developers won’t always take them back, either. Most of the contracts last for the life of the owner — perpetual, in industry speak. Owners are stuck paying fees until they die. The developers prey on seniors and working-class families, critics say, often upselling them when what buyers really want is to get out of their contract.

Enter the timeshare relief providers. They advertise heavily on radio and billboards, and target timeshare owners with direct mail. For a fee — $5,000 isn’t unusual — they pledge to take on the timeshare developer.

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The first step often entails telling the owner to cease all contact with the developer and stop making payments, a controversial strategy that can lead to foreclosure and ding an owner’s credit rating. In some cases, the relief companies transfer timeshare deeds to shell companies, creating the illusion that the owner is off the hook. Others have stolen consumers’ money without performing any service at all.

For legit providers, ending a contract can sometimes be as simple as calling the developer’s toll-free line and paying a termination fee, usually in the hundreds of dollars, if not free. Poof, no more contract.

“I see it a lot,” Rogers said. “Consumers who could have saved thousands of dollars if they just made the call themselves.”

The latest salvo in this ongoing battle: A proposed law backed by timeshare developers that would make it hard for a consumer to hire relief companies. Among other provisions, the 22-page bill filed in the state Legislature would ban relief companies from charging customers up front. Violating the law could result in a felony charge.

The bill (HB 435) appears stalled, and seems likely to remain so, unless it gets overhauled. As is, it could infringe on existing contract laws and be an unconstitutional restraint on trade. It’s a sledge hammer that would target only one side of the problem.

Members of the Florida House Business and Professions subcommittee seemed skeptical of the bill when they met last month.

Rep. Wengay Newton, D-St. Petersburg, described how he felt forced to file for bankruptcy when he couldn’t get out of a timeshare contract. Rep. Juan Fernandez-Barquin said he once endured a promised 90-minute pitch that lasted 3½ hours. Even as an attorney, the Miami Republican felt pressured. He said no.

Another time, a client wanted Fernandez-Barquin’s help getting rid of a timeshare. He reached out to relief companies, but they sounded like scams. He contacted the timeshare developer, too.

“They wouldn’t help me either, so we ended up consenting to a foreclosure,” Fernandez-Barquin said. “A widow had to walk away from the little equity that she had in there.”

Here you have two predatory rivals content to rip each other apart. It might make for interesting viewing if timeshare owners weren’t getting mangled in the fray.

Contact Graham Brink at [email protected] Follow @GrahamBrink.

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