Timeshare exit companies pose their own problems for consumers

There are hundreds of thousands of dissatisfied timeshare owners in the U.S., stuck in often lifetime contracts that are usually difficult or impossible to cancel. Many are elderly and have lost interest in traveling. Many can no longer afford to continue paying maintenance fees. Some are dissatisfied by the deterioration of their facilities over time or are recent buyers who, having been victimized by high-pressure sales tactics, ended up with lifetime commitments of costly obligations to resorts they will rarely, if ever, use.

In the past six years or so, timeshare-exit services have emerged, advertising heavily with promises to help owners eager to jettison their timeshares. But a recent investigation by the nonprofit Twin Cities Consumers' Checkbook finds that scores of these services have developed reputations for taking advantage of their customers.

You can view Checkbook's full timeshare exit report and all of Checkbook's advice and ratings of local service providers until July 7 at Checkbook.org/StarTribune/timeshare-exit.

Checkbook reviewed hundreds of timeshare-related customer complaints, lawsuits, ads and marketing schemes, and interviewed timeshare owners and consumer advocates. It found a disturbing picture of a timeshare industry that uses deceptive selling practices to lure consumers into buying timeshares without understanding all the costs and complexities of ownership and then victimizes them again when they want to get rid of their properties.

Checkbook found that while some timeshare-exit services satisfy many of their customers, there are countless online complaints from angry exit-company clients who often make the same allegation: After they paid thousands of dollars upfront, their exit companies strung them along for months or years, often with few or no updates about their cases.

Exit companies often tell customers that eliminating a timeshare can take 12 to 18 months, but some of their contracts specify no firm deadline by which the companies must complete work.

Many complaints detail frustrated customers who ask for their money back but are simply told to remain patient. Others are denied refunds based on contractual fine print. For example, the companies may say that the owners failed to provide requested documents or other information within a reasonable time.

Some exit firms have gone out of business, with owners remaining on the hook for their timeshare obligations.

Some companies made misleading promises to sign on clients. A common marketing tactic exit companies use is to mislead owners into believing that unless they get rid of their timeshares, their annual maintenance fees and other charges will automatically pass on to their children.

The truth is that children don't inherit their parents' timeshare obligations unless they are co-owners or accept ownership as part of an estate transfer or agreement with the resort.

Missouri, with its Branson-area timeshare developments, is a major center of the timeshare-exit industry; Checkbook found that most of these operations are located there. The Better Business Bureau reports that a staggering 16 Missouri exit companies have BBB "F" ratings.

Several states' attorneys general have filed lawsuits against exit companies, accusing them of failing to provide promised exit services to thousands of customers.

But Checkbook found Missouri's Attorney General's Office has taken almost no action against timeshare-exit companies. To date, it has begun only one action against an exit company, despite receiving many complaints from customers of companies in the state.

Although some of these firms satisfy many of their customers by successfully terminating their timeshare contracts, there's a good chance their clients, with a little know-how, could have achieved the same result on their own for free or at little cost, rather than paying exit companies thousands of dollars.

Start by finding out whether your resort has an exit option. Ask to speak to someone who can help with an exit and not to a sales representative. Be persistent. If your resort doesn't have an exit program, try negotiating an exit yourself. Some resorts may agree to buy back your timeshare, especially if it's in high demand.

More likely, you may have the option of simply returning it, although it might charge you a fee, especially if you can demonstrate that you no longer can afford it or can't use it.

Twin Cities Consumers' Checkbook magazine and Checkbook.org is a nonprofit organization that is supported by consumers and takes no money from the service providers.