7 Reasons Why Timeshares Are Criminal

"Timeshare is a criminal industry." That's a quote attributed to an unnamed deputy speaker of the European Parliament, as recorded in the new report, "Rise and Fall of Timeshare in Europe." The report is, in effect, a wide-ranging screed against much of the British and European timeshare industry. Although the focus is on Europe, many of its consumer warnings apply equally to U.S. timeshare markets.

The report's author, Alexander (Sandy) Grey, is chairman of the British organization Timeshare Consumers Association, which provides information for present and potential timeshare buyers. Grey is no stranger to controversy, having been sued for libel in a court action with an ambiguous result: He was required to pay the plaintiff's legal expenses for preliminaries but the plaintiff didn't pursue the actual claim. I mention this backstory at the outset to make sure you understand that the report is not "unbiased." But it certainly is interesting.

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According to the report, would-be British and European timeshare buyers face many of the same fundamental problems that you might face as a potential buyer in the United States:

  • High-Pressure Sales Techniques. As in the U.S., European promoters lure potential buyers with fake "free trips" and similar ploys to get them on-site, then engage in high-pressure and carefully scripted sales pitches. Often, a sales pitch goes on for most of a day, making it very difficult for visitors to get away.
  • False Claims. The biggest false claim, generally, is to pitch a timeshare interval as an "investment." This is often bolstered by supporting false claims about resale markets that promise profits, a "guaranteed" resale, a developer-operated in-house resale program, and such.
  • Phony Upgrades. As part of the process, consumers who buy in at a low level and aren't pleased with the result are urged to "upgrade" to superior accommodations levels, better time slots, or both—all for extra payments.
  • No Exit. Many timeshare contracts obligate the purchasers to pay associated fees for extended time periods or, in the worst cases, indefinitely. Some contracts even limit the owner's ability to transfer ownership.
  • Fees to Resell. Scammers often promise interval resale for a hefty fee—which almost never results in an actual sale.
  • No Control. Almost all timeshare ownership contracts include a requirement that interval owners pay annual management and/or maintenance fees. Supposedly, these fees are subject to the oversight of owners through a "members' club" or similar, but the report claims that, in practice, developers often load these "clubs" with shills that, in effect, give developers free rein to increase fees without any control. The report posts a graph showing that management fees at one large resort system grew at twice the rate of inflation. The report also claims that developers often pad supposedly audited fees far beyond actual maintenance and operational costs.
  • Dirty Tricks. Some developers, according to the report, resort to a variety of stalling techniques to prevent owners from transferring ownership to resale buyers.

The report ends on a hopeful note that a combination of government regulation and market maturity will drive out the bad actors and, as a result, the scams and deceptions will disappear.

As I've reported in my earlier timeshare coverage, many North Americans who own timeshares are completely satisfied with the experience. I know some folks who own several intervals, use them regularly, and consider them a better value than hotels or conventional vacation rentals.

But I also contend that if you want a timeshare, you'll pay a lot less for a resale than if you buy from a developer. Despite a great deal of satisfaction, lots of owners want out, and it's a buyer's market.

And whatever you think about the author, this report is an interesting read. You can download it here. And for more information on the U.S. timeshare picture, log onto the Timeshare Users Group.

Ed Perkins on Travel is copyright (c) 2012 Tribune Media Services, Inc.

(Photo: Couple Lounging on Pillow Mattresses via Shutterstock)

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