Timeshare troubles: Should you pay to get out of your timeshare?
VANCOUVER -- A vacation at a warm and sunny resort is highly inviting at this time of the year, but beware of getting roped into a timeshare you don’t want; once you’re hooked they can be tough to get rid of.
With free trips and dinners to lure you into signing up, some timeshare companies lock you into a contract that could leave you paying thousands for a vacation spot you don’t use. Timeshare exit companies offer a way out, but beware: you could get trapped paying a lot of money with nothing to show for it.
Solomon Choi says signing up for his Las Vegas timeshare was easy, but after six years, he wanted out.
“When I received the first annual maintenance and renewal bill, I was like - wait, this is a pretty big number,” he says. The annual coast had hit $2,000. “Once you're locked in, you are in for life, in terms of these annual renewal and maintenance fees.”
Choi turned to a company that specializes in getting its clients out of timeshare contracts, and promised him he would be rid of the property once and for all within 18 months.
"I think I ended up paying them about $12,000 to try to get me out of this timeshare."
Margot Gilman with Consumer Reports says this is a common tactic, and some exit companies take a client’s money and end up providing nothing in return.
“We've seen numerous timeshare exit companies guarantee getting consumers out of their timeshare contracts, but never end up delivering,” she says.
Last year, the Better Business Bureau released a report on an investigation into hundreds of complaints about timeshare exit companies in the U.S. It found some were using high-pressure sales tactics, similar to timeshare sales methods, and some owners had paid over $30,000 to get out of their contracts - with no results.
The BBB estimated Americans across 46 states lost over $2.2 million to the companies.
Choi is still waiting to see if the company he hired, and paid $12,000 to, will deliver on its promise. Gilman says it’s important to have an exit strategy of your own when you sign up for a timeshare in the first place.
“More timeshare companies now have 'deed-back' programs to make it easier for owners to leave their timeshare,” she says. “You can also hire a realtor who specializes in timeshares. But remember, timeshares are often a depreciating asset, so you should be prepared to take a loss."
You can try selling your timeshare yourself, but in the saturated timeshare market, you may not get a bite. Hundreds of properties are listed on sites like Craigslist and eBay.
If you do have to use a timeshare exit company, there are a few things you can do to make sure they’re legitimate.
Consumer Reports suggests if the company says it is a law firm, do your due diligence and confirm it. Check that the lawyers listed on the page are real people, and if no lawyers are listed at all - that’s even more suspicious.
If they demand upfront payment, like the company Choi used did, that’s another red flag.
You can also check the Better Business Bureau for consumer complaints.