Consumer champion Dave Ramsey identified the right villain, but chose the wrong hero

People's champion Dave Ramsey facing $150 million lawsuit over his promotion of now notorious timeshare exit firm. TAC maintains that Ramsey was correct in opposing the timeshare industry, and that timeshare owners certainly need assistance in escaping from unwanted memberships. The firm he backed let him and everyone else down. But that doesn't mean the problem itself is not genuine.

Dave Ramsey

Make no mistake: David Lawrence Ramsey III has always been on the side of the consumer, and against deceptive big business.

Following a personal negative experience where a 1987 change in banking regulations wiped out Ramsey's $4 million portfolio and drove him into bankruptcy, the committed Christian bounced back with several years of extraordinary fiscal recovery.

Dave Ramsey began offering monetary advice to couples at his church. In 1988 he founded a financial counselling service named the Lampo Group. In 1992 he published his first book, Financial Peace.

Since then Ramsey has written for newspapers and published several New York Times bestselling books, he has written well received children's books and excelled at radio broadcasting. He was inducted into the National Radio Hall of Fame in 2015.

Main platforms and timeshare warnings

Ramsey advises the 18 million listeners on his syndicated radio show on various financial issues. He vocally campaigns against student loans, the use of credit cards, and a consumer driven lifestyle. He is the original author of the quote: “We buy things we don’t need with money we don’t have to impress people we don’t like.”

Dave Ramsey despises debt collectors, and teaches his listeners how to deal with them.

Dave Ramsey counsels the financially beleaguered on how to escape from seemingly impossible debt via his Debt Snowball Method, and he continues that upward trajectory by teaching how to accumulate wealth (his personal net worth is listed as $200 million.)

Since before 2015, Ramsey has spoken out against the idea of timeshare.

He describes them as 'a real estate trap'. He warns that they are hard to sell and that the costs involved can rise.

Dave Ramsey goes even further on his podcast, describing timeshare as 'the last legal fraud in America.'

Timeshare Exit Team

Timeshare contracts are notoriously difficult to escape, or exit. The timeshare companies rely on annual payments from their customers called management fees, and they can increase those fees at their own discretion.

Timeshare owners are committed to paying the fees every year, whether they holiday or not. Resorts rarely allow people to leave, regardless of how unhappy they may be with their ownership.

You may find this situation unfair. Dave Ramsey certainly did.

There were so many unhappy timeshare customers, that 'exit firms' sprung up all over the USA, offering to help these people escape their unwanted ownerships.

Exit firms appeared genuine. Their mission was clearly a battle against corporate greed on behalf of the 'little guy'. Exactly the kind of crusade that consumer champion Dave Ramsey could get behind.

Timeshare Exit Team (TET) seemed to be the leader of the pack. It had been operating since 2012, and could demonstrate an alleged 22,000 successful victories. They approached Ramsey and offered him fees for recommending and promoting their business.

Money spinner, but why not?

Allegedly Dave Ramsey was receiving around $450,000 a month in referral fees from TET. A total of $30 million over 6 years. To some observers this is already a reason to damn the finance guru.

It really isn't.

Put yourself in Ramsey's shoes: if you agree with the message, you genuinely believe you are promoting the most trustworthy organisation, and that you will be helping an awful lot of people. Why wouldn't you accept the money?

Dave Ramsey thought he was backing the industry leaders. It's difficult to imagine he didn't do his due diligence, given his background and the huge amounts of money involved.

The TET owners, Reed Hein, convinced everyone that they were genuine.

Convincing people was their stock in trade.

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Customer review sites like TrustPilot and Better Business Bureau began seeing accusations of TET failing to perform their advertised service. Complaints that the refund policy didn't actually refund people mounted up.

Clients who say they signed up based on Ramsey's admittedly powerful recommendation claimed to be worse off than before. They still owned their timeshare liabilities, but had paid thousands to TET as well.

In September 2021, TET was ordered to pay $2.61 million in restitution to former clients.

Shortly afterwards, according to a gleeful (main timeshare lobby group) ARDA, Timeshare Exit Team closed its doors for good.

Now Ramsey is being sued for $150 million by 17 of his former fans who claim that he played a role in TET defrauding them.

The timeshare industry would love you to believe that ALL timeshare exit companies are con artists because it helps them retain their income source of management fees. TET collapsing helps them bolster that message.

Influential critics of timeshare like Dave Ramsey being sued and potentially discredited also suits the $29 billion industry's agenda.

Other side of the coin

"Ramsey's law suits are ongoing, but pending the outcome it's difficult not to see him as a scapegoat here," says Andrew Cooper, CEO of European Consumer Claims (ECC). "The US timeshare industry is an incredibly powerful enemy and they are staunchly protective of their income streams."

"The fact is that it is certainly possible to relinquish a timeshare ownership, and there are trustworthy protagonists out there who can help you do it."

Cooper points out that the timeshare industry has paid its own celebrity spokespeople, who could be considered culpable for objectively greater damage than the timeshare exit firms have inflicted.

"Even the scam exit firms, as bad as they are, have only caused a fraction of the misery that timeshare industry has," says Andrew. "In both America and Europe, the fact that there is such a great demand for exit or relinquishment services demonstrates that many people are unhappy with their ownerships.

"CLC World is a huge, worldwide timeshare operator, currently being sued for hundreds of millions of pounds. Many of their subsidiary companies are going through various stages of bankruptcy or liquidation because of the sheer volume of mis-sold clients court claims against them.

"CLC World paid for substantial celebrity endorsements from British tv travel icons like Jennie Bond and Gloria Hunniford. These trusted presenters are held in high esteem by the viewing public. They could be argued to have been responsible for influencing enormous amounts of people to trust CLC World. A company which has been ruled against time and time again by courts in cases of mis-selling."

"Dave Ramsey was on the right side of history with standing up against the timeshare industry. He just backed the wrong company to do it."

If you have a timeshare problem, Timeshare Advice Centre is here to provide free, confidential advice. Get in touch with our team to arrange a no obligation consultation.