How Do I Get Out of My Unwanted Timeshare Contract?

When asked for their perspective about timeshares, 76% of current owners expressed some kind of buyer’s remorse about their interest. And while that number may sound high, anecdotally speaking, this result is fairly unsurprising.

After all, search the internet for even a few minutes, and you’re bound to come across countless stories and questions from current timeshare owners looking to permanently cancel their timeshare contracts after their brief rescission period has ended.

Maybe it’s been a year. Maybe it’s been decades. But the fact remains - many consumers want relief from their timeshare obligations, only to find themselves stuck.

So, why do so many consumers want to find a way out of their timeshare contracts in the first place - and what avenues for relief may actually net them the lasting results they want?

Why Do Many Timeshare Owners Want to Cancel Their Contracts?

Certainly, there are countless valid reasons why a consumer may want to find a way to negotiate an exit from his or her timeshare obligation.

'Are There Any Hidden Costs In a Timeshare?'

When purchasing a timeshare interest, buyers are often sold a lot of sizzle, but very little steak, as our own Michael Finn once put it.

That means that they’re being offered a lot of big-picture ideas and positive-sounding information – without being given any substantive insight into a lot of important topics, let alone the chance to peer behind the curtain at the reality behind a salesperson’s words.

One aspect of timeshare ownership where consumer expectations often fall short of reality? Many buyers vastly underestimate the ongoing costs that are part and parcel of owning a timeshare. In time, this leads to significant dissatisfaction on the part of consumers; in fact, frustration with rising fees and costs is one of the biggest push factors driving owners away from the timeshare industry.

This all beggars the question: “Are there any hidden costs to owning a timeshare?”

"What Is a Special Assessment on a Timeshare?"

For many consumers, the greatest frustration with timeshare ownership is the costs, which tend to go above and beyond the initial purchase price that an owner pays for their interest.

Indeed, the ongoing costs of timeshare ownership also include maintenance fees, which tend to go up, year over year, as well as special assessments. The financial burden that these two types of fees can place on consumers may be great; in fact, the hefty costs of timeshare ownership, associated with fees and assessments, are among the biggest factors driving consumers away from the industry.

For many people, there is also a certain level of confusion that comes along with these bills, and a common query: “What is a special assessment?”

What Should Consumers Know About the Fair Credit Reporting Act (FCRA)?

The federal Fair Credit Reporting Act (FCRA) is an extremely important piece of consumer protection legislation, one that has ramifications for consumers around the country and in various industries – including in one of our focus areas, the vacation, travel, and timeshare sector.

Here’s a quick (and by no means comprehensive) users’ guide to the FCRA – including a dive into its history, and a look at some of the protections and rights it offers to consumers.

What Is the Fair Credit Reporting Act (FCRA)?

Put most simply, the Fair Credit Reporting Act, or FCRA, is a federal law which regulates how consumer reporting agencies and other actors may manage and use your information.

It was codified in 1970 as a way to promote the accuracy, fairness, and privacy of information in the files of consumer reporting agencies, a category which most notably includes credit bureaus, also known as credit reporting agencies (though FCRA also applies to other specialized reporting agencies, such as those that, say, specifically deal in information relating to medical records or rental histories).

When it enacted FCRA, Congress made certain findings and a statement of purpose. Of particular note, lawmakers determined that the banking system in this country is ultimately dependent upon fair and accurate credit reporting, and that inaccurate credit reporting can negatively impair the efficacy of the banking system, as well as other financial institutions.

40 Million Americans Have Errors on Their Credit Reports

A consumer’s credit report is a record of their credit history, compiled from a number of sources, including banks, credit card companies, collection agencies, and government records. These credit reports generally come from three major credit reporting agencies (CRAs) – Experian, Equifax, and TransUnion.

It’s important to note that a consumer’s credit score is largely calculated from these credit reports. In fact, FICO scores – which are used by 90% of top lenders to make credit-related decisions – are calculated based solely on information in consumer credit reports, as maintained by the credit reporting agencies.

As you may know, many institutions use a consumer’s credit score as a predictor of future delinquency. As such, this score is a huge factor in any number of financial transactions, from purchasing a home, to opening a business, to securing a personal loan.

To put it bluntly: For millions of Americans, a hefty amount of their financial and personal comfort and security rides on their credit score – and, by extension, on the credit reports maintained by these major CRAs.

That makes it all the more distressing, then, that the elaborate mechanisms employed within the credit reporting industries can be quite flawed, in many ways. Indeed, according to a government study made famous by 60 Minutes, as many as 40 million Americans have mistakes on their credit report; 20 million have “significant” mistakes.

This is important! Often, errors in a credit report lead to an inaccurate credit score, which can in turn lead to a consumer paying too much for credit – or even being denied credit entirely.

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