Economy Hurts Timeshare Companies: Worst Shape in 20 Years

By M. Beddingfield

Central Florida Investments, Inc., a company with more than 10,000 employees and approximately 2 million timeshare owners, is feeling the financial squeeze "with the suddenness of a heart attack." According to David Siegel, CEO and president, they went from having a fantastic beginning of the year to "experiencing an unforeseen business emergency brought on by the collapse of the credit markets."

The company owns Westgate Resorts and has closed down its Houston premiere gallery, laying off all 106 staff members. Twenty-eight resorts in eleven states will also be affected with hundreds of sales associates losing their jobs.

Ed Hastry, president of the National Timeshare Owners Association, says the timeshare industry is in its worst shape in 20 years.

With credit no longer so easy to obtain, everyday Americans aren’t digging into their cash stash to purchase overpriced timeshares. Isn’t it funny that when money gets tight, people tend to become better judges of value?

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Timeshare Deliquencies Rise

With tougher economic times, it really shouldn't come as a surprise that more and more people are having issues with the timeshares that they own. While more and more want to sell, it seems like a lot are finding that they just can't afford them anymore and are missing their scheduled payments.

Standard & Poor's reports that total timeshare delinquencies rose to a new high of 4.2% in September 2008 and averaged 3.9% during the entire third-quarter.

If you are having trouble keeping up with timeshare payments, it's time to swallow that bitter pill and realize that you aren't going to get back any of the money that you used to purchase the timeshare resort unit. As the economic crisis worsens, it's going to be even more difficult to get rid of your timeshare, so mark it up to an expensive financial lesson and do whatever it takes to sell it now.

Westgate Timeshare Resorts Ordered to Pay $1 Million

By M. Beddingfield

Westgate Resorts, a Florida-based timeshare firm, has been ordered to pay $1 million in punitive damages by a Utah County. The reason? They were using travel vouchers that were too difficult to redeem.

Like many timeshare companies, Westgate used travel vouchers as bait to get people into their sales tours. They promised free trips for two to California, including air fare and lodging in Anaheim. What they didn’t disclose was the fact that there was also an upfront cost to redeem the travel voucher and severely limited restrictions.

In the trial, the jury gave punitive damages to Westgate to make a point to the timeshare industry that fraudulent schemes will not be tolerated.

Westgate Resorts plans to appeal the final civil judgment and says that the independent telemarketing firm in charge of scheduling the tours should have made callers aware of the travel restrictions.

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ABC News Timeshare Video

ABC news did an accurate piece on timeshares and the troubles that they can cause called Timeshare, Beware! That is putting it mildly in our opinion.

With over 4.7 million people owning a timeshare, a lot of them are going to be finding out the downside of not being able to sell them with the growing economic crisis.

One special note: the video mentions that when you inherit your parents stuff upon their death, if they have a timeshare it will go to you. This is true, but you don't have to accept it. You can refuse it as part of the inheritance and you are smart to do so.

ABC Timeshare Video

Five Reasons Not To Buy A Timeshare

A Fox news station has a news item detailing five reasons you don't want to buy a timeshare. These include the following:

1. High pressure sales tactics
2. The high cost of a single week
3. High fees even after the timeshare is purchased
4. High interest rates when you have to finance the timeshare
5. In all likelihood, you aren't going to want to vacation in the same spot your whole life

While these are all good reason, there are certainly a lot more -- but better to get some of that information out to people instead none at all.

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Fairfield Resorts: A Consumer Alert from a Former Employee

This Associated Content writer calls the methods of Fairfield Resorts so hideous that they wanted to pass their experiences on to warn anyone who might have contact with Fairfield Resorts in the future. They go on to describe the techniques that are used to get you to attend a sales presentation, including strong arm persuasion and iron clad contracts. If you take advantage of a free trip with a free hotel and say no to the salesperson, the company has been known to kick you out of the room and leave you stranded. They also talk about phone marketing and mail marketing from Fairfield Resorts.

They end by saying, “Stay away from Fairfield Resorts and do not let the special deals entice you to make a visit. It is not worth your time and the place is as bad as it sounds.”

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Fractional Ownership: Just Another Name for a Timeshare

Timeshare sales staff use all types of names to describe timeshares without ever using the word timeshare. Some other common names that sales people use to sell timeshares without actually using the name are vacation ownership, a holiday club, a vacation club, multi-ownership, a destination club or fractional ownership.

While the sales people will do their best to convince you that the properties that they are selling are somehow different from a timeshare, don't be fooled. The basics are all the same and you get stuck with the exact same problems that timeshares have. So when a salesperson tries to convince you that a fractional ownership is completely different from a timeshare, you know it's time to leave.

Fractional Ownership

A Timeshare Isn't An Investment

Timeshares aren't investments - it's as simple as that. In fact, it’s illegal in some states for a the sales staff of a timeshare developer to claim that a timeshare property will go up in value. By industry standards, it's also considered unethical (although this won't stop over eager sales people) to state that a timeshare will go up in value and is a good investment (you will often hear timehsare sales people say that timeshares are a good "life quality investment" or something similar - don't be fooled).

You can read more about why timeshares aren't investments in Timeshare Investments

Navigator Beach Club - Ongoing Investigation

By M. Beddingfield

Developer Robert Reposa started building Navigator Beach Club in Dennisport, Massachusetts, more than two years ago. He sold dozens of people a year-round timeshare. They thought they were buying into a luxury resort with all sorts of amenities. But Reposa never completed building and now the property is in foreclosure.

According to Boston Channel Team 5, there have been at least 50 complaints on this and another timeshare property owned by Reposa to the Massachusetts Attorney General’s office. The Attorney General’s office is refusing to comment because it is an ongoing investigation.

Meanwhile, those who spent their hard owned cash on this timeshare promise will have to wait for the courts to decide if and when, they will get their money back.

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Timeshare vs Vacation Club

By M. Beddingfield

Are vacation clubs timeshares in disguise?

Ed Perkins of SmarterTravel.com has a way of peeling back the allure of a free vacation to get to the truth. In this article by USA Today, a reader asks about vacation club promos. Mr. Perkins says a vacation club is usually no more than a timeshare in a different costume. With a so called, Vacation Club, you’re buying into a program that gives you access to a condo or resort at certain times. Sounds like a description for a timeshare doesn’t it? Vacation club or timeshare – either way you could be out thousands with little to show.

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Paying Upfront Fees to Sell A Timeshare

If you're going to sell a timeshare, you don't want to pay any upfront fees to get is sold because doing so is taking money out of your wallet that will never come back. The main reason is there is absolutely no incentive for a company to sell your timeshare if they receive an upfront fee. If they don't sell it, they can charge you another upfront fee. Why should they spend time marketing your timeshare if they already have the money? They simply spend their time looking for more people to pay upfront fees to them.

As the IndiaPost makes clear:

Your instincts are right. Do not use that agency. Do not pay that upfront fee. Odds are great that you'll be ripped off.Some of these legit-sounding companies working time share-resale scams typically request a deposit of $100 to $700 that they say is a refundable marketing fee, appraisal fee, listing fee or some such nonsense. They even assure you that, like magic, they have buyers standing by to make a down payment on your week(s).

Then "poof," they make your money disappear.Another scam involves companies offering to pay you more than what you're asking for your week. You just have to wait until their check from a foreign bank "clears" and then refund them the difference. But their check to you will eventually bounce long after your check to them has been cashed.In fact, any companies that promise amazingly good prices and quick sales are probably con artists.

If you come across someone that demands an upfront fee to sell your timeshare, walk on by...