Buying from Developer. Biggest TS fraud?

[prajora]

One of the biggest mistake many people have made (including me) is buying TS from Developer. Pressure sales by slick sales man. This is biggest fraud out there. While what has been done cannot to undone.

What are some of the ways to prevent new victims to get into this? How do you get

Unless the person find sites such as TUG, it is too late and damage has been done.

Seems that there should be laws against people buying from Developers unless they are given educational material and there is wait period before they are made to buy. I know it is too idealistic to think like that. Any thoughts?

 

[LannyPC]

While I understand most of what you're saying, the biggest mistake that people make after buying is not reading their contract that shows clearly what their rights of rescission are.

As much as I despise the methods used by many of these TS companies and sales people, there's no one forcing buyers to go to sales presentations. If they can't resist the offer of the gift, there's no law requiring people to buy. And if they do buy, as I said earlier, there are legal rights of rescission.

 

[bnoble]

Seems that there should be laws against people buying from Developers unless they are given educational material and there is wait period before they are made to buy.

This is exactly what happens. They are given a contract (which spells out the details including the limitations), and there is a wait period during which they can rescind the purchase. However, many purchasers do not really want to know that the decision that they just made, that they feel really good about, was ill-considered.

And realistically, it might not be a terrible purchase. Yes, you can buy something very similar for much much less. But that doesn't mean you can't find value and satisfaction from the purchase. That's what money is for, after all.

 

[Passepartout]

One of the biggest mistake many people have made (including me) is buying TS from Developer. Pressure sales by slick sales man. This is biggest fraud out there. While what has been done cannot to undone.

What are some of the ways to prevent new victims to get into this? How do you get

Unless the person find sites such as TUG, it is too late and damage has been done.

Seems that there should be laws against people buying from Developers unless they are given educational material and there is wait period before they are made to buy. I know it is too idealistic to think like that. Any thoughts?

You're preaching to the choir here. TUG, and many of it's members work very diligently to inform new buyers of their rights to rescission, but unless they come- or are directed here- many will never know.

Regarding your last sentence, there ARE laws that say those developers MUST inform buyers of their rights- It's even on one of those 'initial here' spots where people MUST initial that they were informed, and that they READ the contract and the developer (salesweasel) answered ALL their questions. We all also know that buyers have been bombarded with information, that they have 'selective hearing', and want to get the presentation over with and get back to the beach.

Since you've been here, you haven't found enough value to TUG to join and help provide valuable information to others. There is more to helping people than griping, "There oughtta be a law".

Jim

 

[prajora]

I under right of recission, signing the contract etc. The reality is most people have no idea what the TS world is till they are in that slick presentation by slick sales people. People mostly find of sites like TUG after they have bought it and realized the bad deal they got.

i know we cannot control all people from being victimized. But let us say the buyer is handed educational material and given standard 30days to rescind. Also buyer could be made aware of resale buying. The concept that you can buy in resale does not occur till it is too late. We are only debating here how to maximize the people who can held from being victims of this TS selling machine.

 

[Passepartout]

I know we cannot control all people from being victimized. But let us say the buyer is handed educational material and given standard 30days to rescind. Also buyer could be made aware of resale buying. The concept that you can buy in resale does not occur till it is too late. We are only debating here how to maximize the people who can held from being victims of this TS selling machine.

People can only be protected from themselves for a relatively short time. Remember, those developers spend hundreds of thousands to millions of dollars to elect officials who look out for their best interests. You REALLY don't expect those interests would be served by having salesweasels truthfully instruct their marks about resale, and that they'd support a monthlong cooling off period, do you?

Sure, I'd LOVE IT if only well educated people attended TS sales presentations, but that just isn't realistic. If TUG had unlimited funds, there would be a billboard outside EVERY sales office that would say, "WANT A TIMESHARE? BUY RESALE! $AVE THOU$AND$!"

 

[Marathoner]

What would happen if everyone starts buying resale and all the big timeshare companies start becoming non-viable? That would have a big impact on all resale and developer owners alike

 

[CalGalTraveler]

I would like the rescission laws to be longer and spelled out in the presentation and I despise the lies spewed by reps. However, if you buy a car or RV or boat you only have 3 days AND everyone knows the resale price drops dramatically once it leaves the lot. I am finding the HVAC industry uses similar tactics. If you purchase a condo or home, you get a few days. The price could go down. This is no different.

No one forced the buyer to accept the gift or the deeply discounted stay, and I don't see developers demanding the cost back on the incentives.

FWIW...50% of Tuggers bought from the developer. We bought our first timeshare from HGVC. It still hurts to think about what we paid vs. what it is worth now. However we bought more resales and have realized outsized value out of our trades.

We also received more gifts/discounted stays by repeatedly attending presentations and saying "No" We received 48k bonus points ($7200 - $15,360 in value) from our purchase and presentations for additional vacations which almost made up for the steep purchase price. No one on Tug talks about it but this is additional value. We are always invited back for more and better presentation gifts because we are listed in their system as developer purchase (even though we also own a resale) e.g. they never put us up in a hotel, we stay at the HGVC resorts in nicer rooms and we get nice VISA gift cards. Small intangibles that make it better and improve our ROI.

We also considered returning our developer unit back to HGVC and they offered us $15k. I believe it is because we are in their system as a "developer purchase." Diamond doesn't allow deedbacks if you purchased resale. If they influence HGVC, I will be glad we have our developer purchased timeshare when it is time to exit.

Covid has made me realize that I have never regretted money spent on travel. The memories and time with family are priceless. Developer was a hard lesson but what doesn't kill you makes you stronger. We wouldn't have learned about timeshares and had amazing vacations over the past 7 years if we hadn't gone down this path. No regrets.

 

[RX8]

...given standard 30days to rescind. Also buyer could be made aware of resale buying.

Buyers already have contractual right to rescind that varies by state but is typically 10 days. Yes, the rescission period could be extended to 30 days but there will still be those that will not research their purchase until after their 30 days has expired. Rest assured, they will complain about the “fraud” and will be furious that they are now locked into their contract. At some point, there has to be personal responsibility to read the contract, do research on the internet, and if the purchase isn’t right for them, rescind while they can.

 

[RX8]

...if you buy a car or RV or boat you only have 3 days AND everyone knows the resale price drops dramatically once it leaves the lot.

While I do not know every state’s law pertaining to new vehicle purchases I am not aware of any state that allows a cooling off period for a vehicle purchase. In California, a buyer can purchase a two-day rescission option for a used vehicle purchase but it will require an added fee and the contract spells out the terms, condition and miles if the buyer elects to rescind in those two days.

Edited to add: it has been a number of years since I was in California but dealers (not consumers) had a period of time to rescind the contract of a new vehicle purchase. Dealers in California often deliver the vehicle prior to submitting for bank approval. If the consumer doesn’t qualify for a loan the dealer has a contractual right to rescind the contract. This costs the consumer nothing and they get all their money back.

 

[CalGalTraveler]

We are in California which is a very consumer friendly state. I may not have the number of days correct as it has been a while since we purchased a new vehicle. However I do recall a small rescission period. I don't recall being charged for it. I did not realize that other states offer no rescission on vehicles - wow.

 

[prajora]

People can only be protected from themselves for a relatively short time. Remember, those developers spend hundreds of thousands to millions of dollars to elect officials who look out for their best interests. You REALLY don't expect those interests would be served by having salesweasels truthfully instruct their marks about resale, and that they'd support a monthlong cooling off period, do you?

Sure, I'd LOVE IT if only well educated people attended TS sales presentations, but that just isn't realistic. If TUG had unlimited funds, there would be a billboard outside EVERY sales office that would say, "WANT A TIMESHARE? BUY RESALE! $AVE THOU$AND$!"

 

[prajora]

I understand and appreciate all the replies. Lot of valid points are made. Here is question :
- why so many TS owners get ripped by new home developers. If this is a legit biz, why that is the case. People are not having same level of complaints when they buy homes. Realtors are help in good regard but TS salesman are not. Both end result is ownership of real estate.
TS sales relies on high pressure tactics as they know if the buyer gets time to think, find out, they will not be able to make the sale.

I know most will accept this a fact of life. All I am saying is some control on TS sales process can help in reducing the victims. If there is true need for the product (TS) let it done more ethically. Let the market forces control the supply, demand and pricing not pressure sales. Just being idealistic I guess.

 

[Passepartout]

Here is question :
- why so many TS owners get ripped by new home developers. If this is a legit biz, why that is the case. People are not having same level of complaints when they buy homes. Realtors are help in good regard but TS salesman are not. Both end result is ownership of real estate.
TS sales relies on high pressure tactics as they know if the buyer gets time to think, find out, they will not be able to make the sale.

On reason (most) Realtors are held in high regard is that for the most part, Real Estate increases in value. (Yes, I know there exceptions, but generally) while timeshares are purely luxury goods sold as impulse purchases that in virtually every situation cost FAR more than they will EVER RETURN.

Real estate may be one of the only things that people study carefully, and are (sort of) forced to buy that in the end will likely be their most expensive possession and will be something they can, and usually do pass to their heirs proudly. The same cannot be said for almost every other possession- including timeshares.

Jim

 

[montygz]

This is exactly what happens. They are given a contract (which spells out the details including the limitations), and there is a wait period during which they can rescind the purchase. However, many purchasers do not really want to know that the decision that they just made, that they feel really good about, was ill-considered.

And realistically, it might not be a terrible purchase. Yes, you can buy something very similar for much much less. But that doesn't mean you can't find value and satisfaction from the purchase. That's what money is for, after all.

If only people had a way to search for info about timeshares before buying. If everyone could carry around a little computer linked to an easily searchable, vast network of information, potential buyers could do a bit of research before signing on the dotted line and discover the red flags that come with this industry.

At some point, you just have to accept that in a free society some people may make decisions that we consider questionable. Some people don't care what they spend so long as it's easy. Some people have no experience dealing with a salesperson and fall apart under the pressure. Some people have a hard time saying no. Pressure and ignorance (or a lack of information) are powerful tools.

You would think the rise of the Internet would hurt the timeshare industry, yet it persists. It is very, very profitable, so the motivation to keep it going is strong.

In any event, the best we can do is help the people that come here. We should not be too judgemental, nor let people off the hook for the consequences of their decision-making.

 

[CalGalTraveler]

@prajora All valid points, however these are luxury goods and the difference between real estate and timeshares is that a home is a necessity and a timeshare is not.

The problem with the TS industry is that the perception of buying a deed (perhaps by design) fosters the incorrect assumption that real estate appreciates but the business model is more similar to an RV or a boat. The values plummet on resale.

Yet unlike RVs and boats, they tend to lure in people with gifts. Greed and Wall St. pressures for growth have caused the industry to expand to where it is reaching consumers who simply cannot afford a timeshare. We've seen 80 YO elders and college students on TUG who bought from a developer and were stuck. They couldn't resist the "crack" of a cheap vacation. Hence the abuse.

I would like to see the industry put a time cap on the timeshare with a time horizon where the ownership can be exited or renewed. It should be presented as a pre-paid vacation that can be exited at 10 15 or 20 years - which is really what it should be. However developers would never opt for that unless there is legislation.

FWIW...I will also never buy into a real estate points trust because there is too much opportunity for shell games. At least with a deed there are legal protections in certain states where you can walk without the developer going after your other assets for not paying maintenance fees. All they can do is take back your timeshare (which is what you want) and you *may* get a temporary ding to your credit. But who cares if your finances are in dire straits anyway? Land trusts with points have not been proven in the courts so there may be no legally protected exit.

 

[ccwu]

I

No one forced the buyer to accept the gift or the deeply discounted stay, and I don't see developers demanding the cost back on the incentives.

FWIW...50% of Tuggers bought from the developer. We bought our first timeshare from HGVC. It still hurts to think about what we paid vs. what it is worth now. However we bought more resales and have realized outsized value

Covid has made me realize that I have never regretted money spent on travel. The memories and time with family are priceless. Developer was a hard lesson but what doesn't kill you makes you stronger. We wouldn't have learned about timeshares and had amazing vacations over the past 7 years if we hadn't gone down this path. No regrets.

As CalGalTravrler said that most TUggers against buying from developer. We were in Tugger many years and only view the tug a few times a year. Kind of being labeled ‘stupid’ developer TS buyer. We buy where we want to go, we buy because we like the salesperson, we buy because we enjoyed being elite. Whatever reason, we feel we can afford not being bothered by nickel and dime for fees. We can afford buying in cash without loan (we are strongly against anyone put the self in debt to buy TS. We have no regrets to buy from developer, and we feel money were well spend. We bought resales too.

I recently visited more TUG because of Covid and surprised to find lots of articles that I am interested. Some don’t talk about TS. I just quickly skip articles that against retail buyer.

Resale, or retail is a personal preference. We enjoyed being elite premier (HGV), platinum elite (Diamond Resort), BlueGreen (Gold elite). We bought resales from wyndham, VI (vacation internationale) for a few locations we like, Sheraton, Westin, Ridge Tahoe, Killington Ski Resort, VT (fraction 26 weeks). We enjoyed them all. We spend many weeks and days in all of them. we treasure all priceless memories.

2020 early year, I broke my leg skiing in Killington, VT double diamond. I had a rod and a few screws and on wheel chairs for a few months. I feel lucky because the same year Covid closed all travel. I told my husband that I choose the best year to broke my hip since I did not lose much travel time. I was hopping to go back to ski slope in 2020/2021 and purchased season passes with Covid insurance right to cancel. We did not go back due to Covid quarantine requirement and need to reserve for ski time. (They automatically roll our season pass to 2021/2022). My husband worried if I could ski since I am still limping (my one leg is permanently shorter). But I told him that I don’t need too much leg, and the gravity should be able to take care. We will see. The ski incident made us see the urgency of enjoy today while you can. Don’t wait. We were so glad we had all those years enjoying ski trips. We always on the run. We prioritize travel. We both retired recent years and having more travel. (Also bought more resale TS). We had no regret of doing thing fun even broke my leg was a choice of fun. I see many skiers broke terribly their legs, hips and back, even internal organ and close to death. They all recovered and back to slopes.

So just enjoy as long as you can and take your preference to do whatever and never mind others criticism.




Sent from my iPhone using Tapatalk

 

[Karen G]

If everyone could carry around a little computer linked to an easily searchable, vast network of information, potential buyers could do a bit of research before signing on the dotted line and discover the red flags that come with this industry.

Like a cellphone with internet access to the TUG website?

 

[prajora]

• @prajora All valid points, however these are luxury goods and the difference between real estate and timeshares is that a home is a necessity and a timeshare is not.
  
  The problem with the TS industry is that the perception of buying a deed (perhaps by design) fosters the incorrect assumption that real estate appreciates but the business model is more similar to an RV or a boat. The values plummet on resale.
  
  Yet unlike RVs and boats, they tend to lure in people with gifts. Greed and Wall St. pressures for growth have caused the industry to expand to where it is reaching consumers who simply cannot afford a timeshare. We've seen 80 YO elders and college students on TUG who bought from a developer and were stuck. Hence the abuse.
  
  I would like to see the industry put a time cap on the timeshare with a time horizon where the ownership can be exited or renewed. It should be presented as a pre-paid vacation that can be exited at 10 15 or 20 years - which is really what it should be. However developers would never opt for that unless there is legislation.
  
  FWIW...I will also never buy into a real estate points trust because there is too much opportunity for shell games. At least with a deed there are legal protections in certain states where you can walk without the developer going after your other assets for not paying maintenance fees. All they can do is take back your timeshare (which is what you want) and you *may* get a temporary ding to your credit. But who cares if your finances are in dire straits anyway? Land trusts with points have not been proven in the courts so there may be no legally protected exit.

  Excellent points you are making. Very well thought out. TS could be sold like leased cars except longer duration. Also there should not be a way to resell. So all ownership returns back to Developer. That may keep a standard price of product. No scamming innocent buyers. Legistative changes are needed for all this- not easy.

 

[TravelTime]

I discovered TUG after I had bought some timeshares in Mexico. Believe it or not, I was able to rescind both contracts months after the rescission period. It involved a battle but it worked.

 

[CalGalTraveler]

• 
  Excellent points you are making. Very well thought out. TS could be sold like leased cars except longer duration. Also there should not be a way to resell. So all ownership returns back to Developer. That may keep a standard price of product. No scamming innocent buyers. Legistative changes are needed for all this- not easy.

Thanks! I have been thinking about this for a while. Interesting thoughts on leasing and returning to the dealer once the lease is up. This is the model with Mexico timeshares.

BTW...You can purchase the residual on the lease and resell the car if it is more attractive but most people just turn the car in.

OTOH there are pros/cons to each. Even though we bought our first unit developer, we went on to buy two resales. I now quietly smile when we stay at our Westin oceanfront on Maui and at the HGVC Lagoon Tower oceanfront lanai when I know we have traded for amazing rooms resale for pennies on the dollar when others have paid north of $60k for the same privilege.

Half the fun is in planning the vacation and making lemonade. Others (like some of my relatives and friends) don't care and will pay developer. They work hard at work, make good salaries, and don't have time to research resale and avoid the risk of getting scammed. Some people do get scammed in resale if they don't put in the time to research. Neither approach is wrong. Neither is stupid.

 

[Fried_shrimp]

One of the biggest mistake many people have made (including me) is buying TS from Developer. Pressure sales by slick sales man. This is biggest fraud out there. While what has been done cannot to undone.

What are some of the ways to prevent new victims to get into this? How do you get

Unless the person find sites such as TUG, it is too late and damage has been done.

Seems that there should be laws against people buying from Developers unless they are given educational material and there is wait period before they are made to buy. I know it is too idealistic to think like that. Any thoughts?

Not fraud in the slightest. Expensive, yes. Fraud, no. Victims? Was a crime committed? No. Does someone have a penchant for being overly dramatic? Seems so.

There are no need for laws where common sense should prevail. Seems to me that people would rather rely on the government to protect them than just protecting themselves.

 

[prajora]

We all have right to hold our views. When you use pressure sales tactics to make a sale, it hurts many people. Just becuz it can be done on legal sense, does not make it right. Regulations can be put to control this. There has to be public attention drawn to it and changes enacted by legislation to make it happen. If you accept status quo, you are part of the problem IMHO. Make the world better for others even tho many here have been hurt financially by pressure sales techniques of developers. Some people can afford the financial hits more easily, some hurt a bit more, some even more.

 

[easyrider]

Any thoughts?

Timeshares sales are not a fraud in any way for the most part. The ability of developers to enforce their contract is legal. What has happened is the resale market value for a timeshare isn't anywhere close to the value when purchased. If the resale value was the same or higher than the purchase price there wouldn't really be this issue.

The ability to relinquish an ownership of a timeshare would not be such a problem if the resale price was higher or the same as the original selling price.

For this to happen there would need to be laws regarding resales to protect the developer and buyer.

Bill

 

[GT75]

What would happen if everyone starts buying resale and all the big timeshare companies start becoming non-viable? That would have a big impact on all resale and developer owners alike

Without developer initial sales, there would be no resales.