The $10B timeshare business is in urgent need of reforming

For a snapshot into the problems with the timeshare industry, look no further than right here in the Sunshine State.

Florida resident Karen Henderson says she has been stuck in a timeshare nightmare. The vacation “points” that a major timeshare developer sold her seemed like a neverending contract, and she was increasingly convinced by the developer that enrolling in its buy-back program would guarantee that she wouldn’t be stuck paying growing maintenance fees.

Soon enough, her owner update meetings began transitioning from “buy more and better vacations” to “how to offset your mortgage,” ultimately becoming lengthy meetings with various salespeople who she says pressured her to “invest” in the points so she’d be able to make money that would offset payments from her previous contracts.

Henderson lived in an endless cycle of new contracts and more points, for the sole reason of paying for her steep timeshare mortgages and maintenance fees, and on top of that, she dealt with customer service that she considered at best deceptive, and at times, completely fraudulent.

She is far from alone; her story echoes countless others who’ve struggled emotionally and financially with the burdens of an unwanted timeshare contract — especially here in Florida, commonly regarded as the “timeshare capital of the world.”

When a consumer buys a house, they typically have support from a realtor, a lender, a lawyer, a home inspector, etc. But timeshare developers typically isolate consumers from any professional advice on either end of an agreement, making them sign up on the spot with no legitimate opportunity to ponder what is often a huge and long-lasting financial commitment. They are essentially doing everything they can to target individuals who they feel can be taken advantage of, often the elderly or financial unsophisticated.

The timeshare industry is gigantic, having brought in more than $10 billion last year in revenue, with nearly 10 million households currently owning one or more timeshares.

Ownership costs are lofty, with the average price of a timeshare interval being more than $21,000 according to the American Resort Development Association.

If a buyer takes out a mortgage at a 10-year loan and up to 17.9% interest rate, they would end up paying $41,000 for their timeshare. Additionally, they are responsible for consistently rising annual maintenance fees averaging $1,000 and typically lasting for the lifetime of the contract.

Despite claims to the contrary from the resort industry, the timeshare resale market is difficult to navigate for many consumers, leading them to turn to exit companies, which would not exist if the developers provided true relief. This entire situation is a disgrace for consumers, and these shameful statistics and anecdotes can go on and on.

Several state legislatures began addressing issues relating to the timeshare industry this year. Here in Florida, legislation that was essentially anti-consumer endorsed by the timeshare industry was introduced and promptly failed.

But banking on state legislatures to tackle this problem one-by-one could take decades. Important action will only emerge from increased awareness of the issue, which is why the Coalition to Reform Timeshare (CRT) was formed earlier this year.

The CRT is dedicated to working with consumer advocates and legislators in Florida and throughout the United States to fix the timeshare industry, making it more friendly to consumers from the first moment of the sales pitch to the product itself. It is shining a light on the industry’s dark side, spreading stories of timeshare owners who have personally dealt with the bullying and greed that at this point seems built into business practices in this industry.

Specific areas of reform that should be priorities for fixing this industry include the right to record a timeshare company’s entire sales presentation; the right to a 24-hour cooling-off period prior to signing a timeshare contract; the right to full transparency during the sales presentation, including complete disclosure of the true market value of the timeshare, full disclosure of the entire cost of timeshare ownership, and freedom from any high-pressure sales techniques and verbal misrepresentations; and the right to unilaterally terminate an unencumbered, non-deeded timeshare.

The timeshare industry is in urgent need of reform, and innumerable individuals and families are in urgent need of assistance. Legislators and timeshare developers across the country — starting here in Florida — should not wait another second to act.

Brandon Reed is a consumer rights advocate and founder of the Coalition to Reform Timeshare.