If you’re feeling burdened by your timeshare, or can no longer financially manage the payments, you may have contemplated hiring a timeshare exit firm to help get you out of your ownership obligations—but be very cautious about signing on the dotted line. The timeshare exit business is unregulated, and complaints are on the rise. Many companies in this growing industry prey on anxiety, fear, and desperation. They charge high upfront fees while making promises they never intend to honor.
In July, the Better Business Bureau issued a warning about Square One Development Group, after their customers reported losing over $350,000. We recently heard from a former client who paid this company nearly $6,000 in 2019, after being led to believe she would have no further obligations on her timeshare. When she received a bill for her annual maintenance fee, she called the resort, and was informed Square One Development Group had done nothing to get her out of her timeshare ownership.
You may think you have legal recourse if a company breaks its contractual obligations to you, but enforcing those rights is difficult, and you are unlikely to get your money back even if you win your case.1 A money-back guarantee is meaningless if you have no way to hold the company accountable.
The Federal Trade Commission recommends the following steps to avoid timeshare resale scams:
- Check out the reseller. Contact the State Attorney General and local consumer protection agencies in the state where the reseller is located. Ask if they have any complaints on file. You can also search online for complaints.
- Ask about fees. It’s better to do business with a reseller that takes fees after the timeshare is sold. If you must pay a fee in advance, get refund policies in writing.
- Get everything in writing. Read the contract carefully to make sure it matches promises you’ve been given verbally. It should include the services the reseller will perform, plus any fees you must pay and when. If the deal isn’t what you expected or wanted, don’t sign the contract.
If you have been the victim of a timeshare exit scam, report it to the Federal Trade Commission here. Note: From this page, select “Timeshare Resales” as the category.
1 Enforcing contractual rights in court requires hiring an attorney at an hourly rate and covering the additional fees and costs yourself. These are not cases lawyers generally take on contingency (where attorney fees are paid from any money awarded by the court), and free legal services are not available for these issues. If you sue in small claims court, where the damages cap is $10,000, you may win without incurring hefty legal fees, but collecting on a judgment against a corporation in another state is very difficult and unlikely to be successful.