The Consumer Protection Laws for Timeshare Sales

Timeshare Defense Attorneys are here to help you with the consumer protection laws for timeshare sales. We can help you cancel your contract. Call us for more info.

Timeshare contracts are unique in that they are often in perpetuity. This means you are bound for life once you sign a timeshare agreement. There is no escape clause. 

Timeshares are expensive and can cost tens of thousands to over a hundred thousand dollars. This is akin to buying a home or an expensive car. In addition to the upfront purchase price, timeshare owners commit themselves to ongoing recurring costs, which increase every year.

Consumers must also pay annual timeshare maintenance fees on top of the purchase price or mortgage fees. Average annual maintenance fees are approximately $900 per year. These costs escalate on average by about five percent per year. 

Timeshare owners are also required to pay for various other expenses, including property improvement costs (special assessment fees), property taxes, and booking fees.

As a result, consumer protection agencies receive thousands of complaints from timeshare owners annually.

Timeshare Sales Tactics are Unfair And Deceptive

The timeshare sales presentation aims to get the customer to sign on the dotted line at the presentation. 

• Developers lure clients by promising a “no-obligation” gift. All they have to do is attend a 30- to 45-minute sales presentation. Many presentations last for hours. Clients are tired and hungry by the time they get to the signing stage.

• When it comes time to sign, you are pressured to do so immediately. 

• One partner is often played off against the other with statements such as: “You can see she wants this holiday. Why would you stand in her way?”

• You are advised that this unique offer is only available today. If you want to take the contract home to go over it, you will lose this opportunity and have to pay more for the same timeshare later. 

• Rather than explaining what you’re signing, timeshare developers use confusing contract language. They send you several documents, giving you little scope to properly assess the terms.

In addition, many salespeople use aggressive sales tactics. They often misrepresent the contract during the lengthy sales pitch. Consumers are subjected to hours of oral representations of what they are getting. A contract cannot be easily verified to ensure that it reflects all of the promises made by the parties. 

Non-Disclosures By Timeshare Developers 

Developers rarely advise consumers on their cancellation rights. These rights are typically embedded deep in the contract, never to be discovered.

Several states require the disclosure of certain vital contract elements. For instance, Wisconsin Law Chapter 707 outlines some of these. 

In Wisconsin, sellers may not:

• Make false or misleading statements

• Misrepresent the resale value

• Represent the timeshare as a financial investment

• Make assertions of material fact that are inconsistent with the written documents

• Have the buyers waive their rights or certify the absence of any misrepresentations

Chapter 707 also requires certain disclosure statements to be transparent in all documentation. These include the following:

• A confirmation that the documents are legal documents. An encouragement that readers obtain professional advice if they need help understanding something. 

• A notice that the written contract can be relied upon as legally binding. A disclosure that oral statements not included in the documents are potentially legally binding. 

• A clearly stated period within which the consumer can cancel in writing (the cooling off period). The period begins either when they sign the contract or when they receive the timeshare disclosure statement.

The Next Phase: Timeshare Resale Scams

Regretful consumers often seek to escape their onerous financial obligations. However, they are often faced with a refusal by timeshare companies; they refuse to release them from their contracts even when consumers have paid the purchase price in total and are current on fees.

Consumers, desperate to exit, try to sell their timeshares. They soon discover that timeshare resales are more challenging than they were told. They cannot even ask for close to the original purchase price. Timeshare purchasers are few and far between. The market abounds with timeshare resale scammers who promise they have a buyer in a saturated and unresponsive market. They ask for a fee upfront and are never to be seen again.

In order to avoid these scams, consumer protection agencies suggest paying money into an escrow account or not paying up front.