The 5 Most Bone-headed Mistakes You Can Make with a Timeshare
Obviously, the biggest mistake you can make is buying one in the first place. Other than that, here are five others you need to be aware of.
1. Paying a company to attempt to sell or rent it.
Even though the IRS values most timeshares as worthless, and hundreds of timeshares can be had on eBay for next-to-nothing, some people just can’t believe that the timeshare for which they paid tens of thousands of dollars, isn’t worth the paper their contract is printed on. This is why so many re-sale companies are able to pick the pockets of so many timeshare owners.
If you still think that someone out there might want to buy or rent your timeshare, just do this: Call any timeshare company and tell the salesperson that you would like to pay full price for any of their timeshares – with only one condition: tell the sales rep that within thirty days of your purchase date, you would like the right to sell that same timeshare back to the timeshare company for the asking price of only one dollar.
Any company selling a legitimate product would gladly jump at such a proposal because it would be foolish not to. Your car dealership would take you up on that. Your realtor would. So why not your timeshare company?
Hmmm, I wonder why..
2. Getting a low-interest loan to replace your high-interest timeshare debt.
Timeshare companies know that a certain percentage of customers will eventually figure out that they can negotiate out of their contract by using a law firm or an agency such as Sapphire Cancellation. That’s why timeshares use a couple of sneaky tricks to get as much money as possible from their customers as quickly as possible. One such trick involves the interest rate charged. Usually it’s pretty damn high. I’m talking anywhere from between 13% to 22%. This high interest-rate strategy encourages customers to transfer their high-interest timeshare debt over to a low-interest bank loan, which pays off the timeshare instantly. Once the timeshare has been paid off, it doesn’t really matter if the customer figures out how to cancel their timeshare contract because the timeshare already has its money.
What’s more, those customers who are unable to refinance, and who never realize the extent to which they’ve been deceived, will pay dramatically more money to the timeshare over a ten-year period, often more than twice the original purchase price.
3.Paying a down-payment when purchasing a timeshare.
When a potential customer balks at putting money down on a timeshare (and most do), the timeshare company has a solution: get the customer to open up a new credit card with a third-party provider (often Barclays). Once the timeshare debt has been transferred to such a card, the timeshare company is paid off entirely, and will feel little to no pain when the customer eventually figures out how to escape their contractual obligation.
Most people haven’t the slightest idea how to dispute a credit card purchase of a timeshare, and that’s why most disputes of this nature are won by the timeshare company.
4.Letting the timeshare salesperson begin the negotiation by establishing a ridiculously high asking price.
When you help people out of their timeshare contracts for a living, you spend a lot of time listening to stories about sales presentations. The ‘ridiculously high asking price maneuver’ is hands-down the most effective technique used to separate people from their money. It’s used by all timeshare salespeople, regardless of the timeshare company they work for.
Salespeople use this technique for two reasons, both of which are critical to getting the sale. By starting off extremely high (knowing full well that similar timeshares are available on eBay for only a dollar) the salesperson establishes a price point by which all subsequent lower offers can be compared. This technique invariably leads to the following exchange between husband and wife:
“If we hadn’t held out as long as we did, Honey, we would have paid $50,000 instead of the final price of $15,000.”
Little does the customer know, the salesperson would have accepted $5,000 as the final price. This trick is pure psychology: $15,000 sounds like a small number and an awesome deal when compared to $50,000 – no two ways about it.
Second, by starting out high, the salesperson has the ability to make the customer believe they’re getting a great deal by lowering the price due to bogus discounts. These discounts usually take the form of a supposed foreclosed property, a trade-in, or the fact that the customer is a veteran or first responder. These sneaky tricks also plant seeds in the customer’s mind that their timeshare can be given back to the timeshare company in the future, which is simply not the case.
5.Paying a cancellation firm if you are over 65 and on disability or a limited fixed income.
In all my years of experience, I have never once encountered a timeshare company that wouldn’t release a senior citizen who was on a limited fixed income. The optics are just too awful – even for timeshares.
If you fall into this category, my advice is to save your money and not hire a cancellation company. The worst thing any timeshare can do is put a negative mark on your credit. Federal law protects seniors of limited means from wage garnishment and lawsuits filed by timeshare companies. So unless you are trying to dispute a credit card purchase related to your timeshare, or you need your credit protected, there’s no need to pay any cancellation firm to protect you, including Sapphire Cancellation, should you fall into this category.
It’s not illegal to take advantage of people who are unaware they don’t need your help, and so even the legitimate cancellation firms will take money from fixed-income seniors. Here at Sapphire Cancellation, that’s just not how we roll, baby!
By Tom Heehler