HAD BEEN SEVERAL years since
Corinne Adams, 83, last visited the
timeshare in Hawaii that she and her
late husband purchased almost three
decades ago. At more than $600,
the annual maintenance fee was an
unnecessary expense, and Adams, a
grandmother from Olympia, Wash.,
worried about burdening her adult
children with a property they didn’t
want to inherit. So, she says, when she
got a call from a woman representing
Pro Timeshare Resales saying that she
had several possible buyers lined up,
she was receptive.
Adams says the caller explained that
the company would find a buyer and
take care of the paperwork. All Adams
had to do was pay an upfront fee of
$1,528. More than two years and nearly
$10,000 later, Pro Timeshare had still
failed to deliver a buyer, according
to Adams, who gave testimony in a
lawsuit against the company filed by the
Federal Trade Commission in 2016.
“They were so persuasive; they
always had someone about to sign,”
she says. “But every few months they’d
come back saying they needed a little
more time, and more money.”
Adams, it turns out, was just one of
thousands of consumers Pro Timeshare
had defrauded. An FTC investigation
found that the company had collected
more than $18 million from consumers
without facilitating a single sale. (In
October 2019, the FTC began issuing
partial refunds to Adams and others.)
Although the FTC lawsuit led to a
court settlement that permanently shut
down Pro Timeshare in 2018, there are
many other timeshare exit companies
like it. They especially target older
owners like Adams, who are desperate
to get out of timeshares they no longer
want or can no longer afford.
“These companies know there is a
vulnerable population of people to prey
upon,” says Michelle Corey, president
and CEO of the St. Louis Better Business
Bureau. Its own investigation found
10 Springfield-area companies that,
the BBB says, bilked 356 customers out
of $2.2 million for services that were
never delivered or completed.
Even business-savvy people can get
reeled in by the questionable claims
these companies make. Solomon Choi,
a 39-year-old New York entrepreneur
and founder of the 16 Handles frozen
yogurt chain, turned to an exit company
he found online six years after he
purchased a Las Vegas timeshare, when
the annual maintenance fee soared to
more than $2,000.
“I thought I could really be stuck with
this for life,” Choi says of the timeshare
he bought during a free weekend trip
to Las Vegas offered by the company in
return for sitting through a mandatory
sales pitch.
Months later, Choi learned that the
exit company had gone bankrupt. He
has paid $11,200 to a second firm that
took over his case—and is still waiting to
learn when it will be able to release him
from his timeshare.
Not All Fun in the Sun
More than 9 million U.S. households
own some type of timeshare, according
to estimates from the American Resort
Development Association (ARDA), which
represents the timeshare industry.
These can be a stake in a property
that entitles the owner to use it for a
defined period of time or a points-based
program that offers more flexibility.
Timeshares combine resort-style
amenities with accommodations that
usually feature a kitchen and two or
more bedrooms. Hilton Grand Vacations
and Marriott Vacations Worldwide
report that in 2018, sales worldwide
were up 10.6 percent and 8 percent,
respectively. ARDA says its surveys show
that 85 percent of timeshare owners
characterize their experience as good,
very good, or excellent.
Still, a timeshare can be difficult to
unload, in part because of a lack of
demand for older ones on the resale
market. The going rate on the Timeshare
Users Group, where “used” timeshares
are listed for sale, is about 10 percent
or less of the original purchase price,
according to Brian Rogers, who manages
the website.
“It is virtually impossible to sell most
timeshares for the price you paid,” says
Brian McDowell, a lawyer and partner
with the firm Holland & Knight, who
played a key role in the FTC case against
Pro Timeshare.
Rising maintenance costs are helping
to fuel the timeshare exit business,
according to Gideon Sinasohn, an FTC
attorney who filed the case against Pro
Timeshare. “As these properties age,
the costs of maintaining them go up,” he
says. The fee increases are usually kept
to less than 5 percent a year, but that
can add up quickly over time.
Seller Beware
There are two types of exit companies:
resale firms, which claim they can
sell your timeshare, and relief
companies, which promise to release
you from your contract and annual
maintenance bills. Some do what
they say. (Corinne Adams found a
release company that successfully got
her out of her timeshare last year.)
But scammers abound, according to
the FTC and the Better Business Bureau.
So how can you tell them apart?
“Demanding a large fee in advance is
a huge red flag,” Sinasohn says. Another
is if a company claims to be a law firm
or says it works closely with lawyers
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40 CR.ORG FEBRUARY 2020
