Looking to escape your timeshare? Here are the pitfalls to avoid

Timeshare's failure to modernise and compete in the modern holiday marketplace has left many owners clamouring to be free from their contracts. But beware the pitfalls...

Glory days

Make no mistake: buying a timeshare was once the smart and luxurious holiday choice to make for your family.

If you holidayed in the 1980s and 1990s, the chances are you experienced disappointment through regular travel agents. The hotel was booked based on a combination of tv/radio adverts, shiny brochures and the sales patter of travel agency staff. TripAdvisor and TrustPilot had not yet been born. There was no widely available information on the internet to tell you the real story.

Accommodation standards in hotels were unlikely to match up to the best promotional photos, taken of the best apartment, by the best photographers. In a closed loop system there is always entropy. Some level of disappointment was pretty much guaranteed.

Along came timeshare, already in existence since the 1960s but exploding in popularity with the advent of mass foreign holiday consumption. Resorts targeted disappointed holidaymakers and showed them a way to guarantee five star opulence. It came at extra cost. But when did high quality ever not command a high price?

The holiday industry took notice and evolved. Timeshare failed to keep up. Regular holidaymakers now have complete flexibility in terms of quality, holiday duration, destination, cost and style. Timeshare by comparison is fixed, rigid, expensive and inefficient.

People are trapped in dated memberships whose duration could be decades long, or even in perpetuity. An appropriate metaphor would be if you had bought a top of the range new car back in 1985. It would be a great source of pride and enjoyment when you first bought it.

Not so much if you were still driving it today.

Wrong ways

Timeshare contracts were designed to be watertight and hold people in the membership for the stated time duration, whether they wanted to or not. But people are inventive. Show a man an 'inescapable' prison and sooner or later you get the Anglin brothers jimmying their way out of Alcatraz, or Henri Charrière (Papillon) 'coconut rafting' to deliverance from Devil's Island.

For every successful escapee, there were countless tales of failure that ended in disaster for those involved.

Similarly there have been many creative attempts to relinquish an unwanted membership, most of which were at best unsuccessful and at worst damaging for the protagonist.

Here are some cautionary accounts of how people have attempted to break for freedom in the past...

Stop paying the maintenance

The internet is full of bad advice from self professed 'experts' stating that if you walk away and just refuse to pay your maintenance, nothing will happen. Eg your membership will lapse and you will be free of your timeshare.

The truth is that with a tiny amount of exceptions, resorts will never accept defeat that easily. They don't generate much revenue by selling new memberships these days Their main source of income now is those annual fees you hate paying. Without that money they are finished.

You signed a contract to pay those fees, so the law is on their side when it comes to collecting.

Resorts can and do take late/non paying clients through the legal processes of debt collection and enforcement, Up to and including enforced bankruptcy.

Just ask your resort to cancel your contract

Again, why would they? They need your payments to stay in business.

It is true that many resorts have exit plans, but they are entirely discretionary.

The resort can say no, even if you meet their conditions. Some resorts even hold a lottery of people who want to leave, with the lucky winners being granted their freedom.

On the rare occasions when resorts do allow you to leave, they generally charge you many years of maintenance in advance for the privilege.

The final factor to consider here is that IF your resort does say yes, and you do pay the 'ransom fee' to leave, they will probably also ask you to sign away important entitlements, such as the right to later claim compensation over mis-selling.

You don't need to do this in order to relinquish.

Sell the timeshare to a specially created limited company, then dissolve the company

This one was innovative, although it could almost certainly be considered fraud.

According to a reliable ECC source, a former Diamond Resorts client formed a UK limited company, specifically to transfer ownership of his (and other dozens of other people's) memberships.

The LTD company then filed for bankruptcy and Diamond were forced to accept the memberships as in lieu of maintenance fee payments.

At the time, this reportedly worked. Once. The court ruled that Diamond had sold the product and therefore could not deny they attributed a financial value to it.

Immediately Diamond is said to have closed the loophole. Certainly nowadays no timeshare company will allow an ownership transfer unless approved by themselves.

Sell the membership through a resale company

There are many owners who believe that this would be a valid way to escape. After all, the membership is valid and works in the manner it was sold to do, why shouldn't it have some residual value?

Most owners are realistic enough to expect a loss, but if they can escape the burden of ownership any money they can get is a bonus.

Sadly there is no market for genuine timeshare resales. People do not want to buy timeshares, or even take them for free, because of the commitment to pay annual fees. Ebay has many timeshares advertised for $1, with no takers.

Most companies advertising resale services, who offer to sell your timeshare for you will never do so. Their business involves charging you an upfront fee, in return for advertising your ownership on their website. The contract you sign with them in no way guarantees a sale. The insidious part of the deal is that the people working for the resale company will work hard to make you believe that your timeshare is in high demand and a sale is extremely likely to happen quickly.

It won't.

Bequeath the timeshare to a charity or other entity

People who have memberships 'in perpetuity' originally believed they were doing something generous for their children. The timeshare company spiel was that even after the parents pass away the kids inherit the membership. Every year they would have a luxury holiday, already paid for in advance, and would remember this thoughtful gift from their parents.

In reality modern offspring are less than enthused about inheriting the burden of maintenance fees. The parents, terrified that their intended, caring gesture is going to backfire and saddle their kids with annual expenses often look for ways to offload the membership elsewhere.

When people bequeath timeshare memberships to churches, charities etc, those entities politely refuse (as they are entitled to) and it goes back into the estate for the liabilities to be distributed against the assets before remaining inheritances are passed on.

Google "timeshare exit/relinquishment" and select a firm to help you

This is getting closer to a reliable solution. Unfortunately not close enough.

Yes, generally people do need professional help to extricate themselves from a timeshare membership. However the vast majority of firms offering this service are fraudulent. They will convince you that they can do the job, but in reality all they will do is take your money and leave you in the same position as before.

Some of those firms will justify their fees by sending a letter to the timeshare company along the lines of: "please accept this communication as notice that our client wishes to relinquish their ownership with you. If we do not hear back from you within 14 days, we will assume that you have accepted this request and the membership is cancelled."

The resort ignores the letter because there is no legal weight to it.

The exit company however reports to the client that they are free and tells them to ignore any future demands for maintenance. In reality the maintenance demands are still valid, and ignoring them will place the client further and further in debt.

An unpleasant twist to the above scheme is that with the client's POA, the scam firm can change the membership address to their own office, so that the client no longer receives the continuing maintenance demands.

The first time they become aware that their contract is still very much alive, is when they get a county court summons over years of maintenance demands. By this time the scam firm will very likely have ceased trading and disappeared into the ether.

Right way

"It is generally possible to relinquish a timeshare," explains Andrew Cooper, CEO of European Consumer Claims (ECC), "Most people need expert help from a qualified, reputable company, like ECC."

With over 1800 successful timeshare relinquishments in their ledger, ECC can certainly be considered leading experts in this field.

ECC can also boast 1183 successful compensation claims to date (as well as another 1000+ cases in process). These contracts were declared null and void by a judge, relieving the client of any further financial obligations towards their resort. As a bonus, these clients were awarded compensation averaging £20,000 per instance.

For a free, no-obligation, confidential consultation on your timeshare situation, get in touch with our team at ECC.