• At Tax Time, A Final Kiss Goodbye From Your Former Timeshare Developer

    So, it’s early into your new year, and you’re still feeling giddy about last year’s financial ‘win,’ when you and your timeshare developer ‘shook hands’ and agreed to go your separate ways. At last the bleeding has stopped! Your holidays were no doubt a bit brighter because of the extra cash you saved from the negotiated termination of your timeshare obligation.

    You grab your mail from the mailbox, expecting some extra holiday charges on your credit card bills, knowing you have a little extra cash to handle it. Suddenly you spot the unexpected envelope from your former resort and tear it open. Nope, it’s not a belatedly sent holiday card, it’s an IRS form 1099, (either an “A” or a “C”), and it is advising you that this form must be filed with your tax return because the resort has already sent the IRS a copy.

    But what exactly does this mean? There’s an amount listed on the form, and it is a significant number. It seems that via this document, your former resort is advising the IRS that this is the amount of the debt of which they have so generously forgiven you. You, per this 1099 form, apparently previously owed this amount to your timeshare resort, which if you had continued to pay per your former contract obligation, would have been paid out to them over the remaining term of the promissory note, over whatever the timeframe that you had remaining on your timeshare mortgage. But why is this now the IRS’s business?

  • 'Might I Be Liable for a Deficiency Judgement After a Timeshare Foreclosure?'

    Every year, thousands of Americans attempt to find a way to get out from under their timeshare obligations.

    For many of these consumers, the major factors driving them away from the timeshare industry are cost-related, including assessments, interest payments, and annual maintenance fees, which tend to rise, year over year.

    What’s the best strategy for consumers looking to extricate themselves from their timeshare interest with their finances intact? Our own Michael Finn offered some thoughts in a video post, responding to the question: “Could I be liable for a deficiency judgment after a timeshare foreclosure?”

  • 'My Main Problem With My Timeshare Is Making Reservations. What Are My Legal Rights?'

    When you own a timeshare interest, you’re subject to certain unavoidable fees, including assessments and annual maintenance payments, which tend to increase, year over year.

    For what owners pay, there is an expectation that, at the very least, being able to use one’s timeshare weeks or points should be a relatively straightforward, easy process. In practice, however, it is not uncommon to hear from timeshare owners who face major struggles when it comes to booking and using their interest.

    It raises the question: “If your main problem with your timeshare is making reservations, what are your legal rights?”

  • 'What Does Owning a Timeshare Really Mean?'

    Perhaps you’ve read about yet another timeshare scam in your local newspaper, or maybe you’re being pitched to attend a timeshare sales presentation while on a vacation.

    But, if you aren’t already a timeshare owner, the concept can be a little bit confounding. They have a bad reputation for many… But what, exactly, is a timeshare? What does it mean to own one?

    Our own Michael Finn recently sat down to tackle that question. The video of his response is below, along with a transcription of his remarks:

  • 'What’s the Difference Between Deeded, Leased, or Right-to-Use Timeshare Interests?'

    Plenty of timeshare owners sign up for their interest with a vision of an annual vacation at a luxurious ‘home resort’ dancing in their heads. Others are willing to take on the obligation of timeshare ownership in order to exchange their weeks or points for stays at resorts across the country, or even around the world.

    But for many more timeshare owners, the question really is – “what did I actually just sign up for?”

    Historically, there have been three primary flavors of timeshare ownership – though today, in practice, essentially only one is still in favor among major resort developers. Those types of ownership are “deeded,” “leased,” or “right-to-use” (sometimes called “points-based”) systems.

    So, our hypothetical consumer might now ask, “What’s the difference between deeded, leased, or right-to-use timeshare interests?”

  • 'Will My Timeshare Maintenance Fees Increase?'

    According to reports from ARDA, maintenance fees tend to be among the pressing factors driving timeshare owners away from the industry, with 50% of owners who are planning to sell doing so because they “no longer want to pay the maintenance fees” and 46% of timeshare owners who are seeking an exit citing high maintenance fees as their “most important” reason.

    It’s easy to see why these annual fees place a major financial burden on many consumers.

    For one thing, there’s the fact that the vast majority of consumers do not own a deeded timeshare interest, but rather points, which buy them the “right to use” a resort property, rather than anything resembling actual real estate. What’s more, plenty of consumers either bank or exchange their points every year, rather than using the “home resort” for which they are ostensibly paying their maintenance fees. Why should consumers be on the hook for payments for a resort they have no ownership stake in, and which they, perhaps, have never used?

    For another thing, there’s the matter that maintenance fees tend to rise, year over year, without ceasing. It beggars the question for many consumers: “Will my timeshare maintenance fees always increase?”

  • 3 Common Myths About Timeshares, Unpacked

    3 Common Myths About Timeshares, Unpacked

    Timeshares have existed in some form or another for the better part of a century now.

    And though the industry has grown and changed with the times, several myths and misconceptions continue to define timeshares in the minds of many, spread by industry insiders, the media, and even timeshare consumers themselves.

    Let’s dissect three truths that many hold to be self-evident about timeshares:

    1.) “A Timeshare Is Always a Real Estate Investment That Will Appreciate in Value.”

  • A Real Horror Story? The Timeshare Resale Scam

    A Real Horror Story? The Timeshare Resale Scam (Source: pixabay.com - used as royalty free image)

    Vampires, werewolves, and ghosts are all pretty spooky, we admit. But the Halloween ghoulies that creep up each fall are nothing compared to a very real threat that targets unsuspecting Americans all year long – the timeshare resale scam.

    This pernicious – and all-too-common – scheme dupes hundreds of consumers out of thousands of dollars every single year. As regular readers of our News Room can attest, it often seems like not a week goes by without word of some fresh scam targeting timeshare owners coming down from a consumer protection watchdog or news agency – and to us, that’s pretty frightening!

    How does this tricky scam work, and what can timeshare owners do to avoid getting ensnared in the first place? Let’s explore…

    How Do Timeshare Scams Work?

  • A Timeshare Cancellation Horror Story

    A Timeshare Cancellation Horror Story

    It may not be Halloween, but that doesn’t stop the attorneys at Finn Law Group from hearing countless horror stories from consumers who feel trapped or tricked by their timeshare obligation.

    Let’s break down one hypothetical consumer protection nightmare; we call it “The Case of the Vanishing Rescission Period,” and it goes a little like this…

    I accepted an invitation to what turned out to be a timeshare sales presentation after being promised a free gift. Enjoying my time at the resort, I figured “why not?” At most, I was just going to be out an hour of my day. After a grueling, time consuming sales pitch led by multiple sales associates, I finally signed a contract at the lowest price they offered, figuring that I could quickly cancel my purchase, thanks to a rescission period. However, by the time I tried to cancel, the resort company said I was too late. Now I’m on the hook for high fees and assessments, with no way out! How can that happen?

    We see stories like this all the time. Goaded into attending a sales presentation – or simply lured in by the promise of a tantalizing gift – a consumer signs on the dotted line, not out of any real desire to own a timeshare interest, but more to finally escape the psychological pressures of that four hour-plus sales pitch.

    Certainly, a consumer who feels coerced or misled into making an enormous purchase should have the option of canceling it within a reasonable period of time. In the case of the timeshare industry, however, this isn’t always the case, due to the complex psychological factors that undergird the industry’s statutory protections.

    Broadly speaking, there are two major consumer protection devices available for timeshare buyers, as our own Michael Finn pointed out in his recent article, “Are There Adequate Statutory Protections in Place For Timeshare Purchasers?”Those are:

  • An Open Letter to the American Resort Development Association (ARDA)

    An Open Letter to the American Resort Development Association

    In this newer era of social responsibility and fair dealing, which ARDA (American Resort Development Association) and its members subscribe to, I consider it my duty as a consumer advocate (and timeshare owner) to bring a matter of important consumer significance to your attention.

    A client of mine received a collection letter in March, 2016. Let me note initially, that based upon where the letter was mailed from and mailed to, that no state laws may have been broken, and, because the letter did not come from a third-party debt collector, no federal laws may have been broken either. The Federal Fair Debt Collection Practices Act (FDCPA) which applies only to third-party debt collection agencies, provides multiple safeguards to consumers, including provisions prohibiting debt collectors from making any false, deceptive or misleading representations, or threatening to take legal action if that course of conduct is not truly intended. Further, debt collectors may not engage in conduct intended to disgrace or harass the alleged debtor/consumer.

  • Are There Adequate Statutory Protections in Place For Timeshare Purchasers?

    Are There Adequate Statutory Protections in Place for Timeshare Purchasers? (Source: pexels.com - used as royalty free image)

    Are there adequate statutory safeguards in place for timeshare buyers? It all depends on the buyer’s ability and willingness to navigate through thick smoke and amusement park-style mirrors!

    There are essentially two major consumer protection devices in play for today's timeshare buyer:

    1.) The statutory rescission period, which varies by state from five to ten days,

    2.) The buyer’s receipt of a state filed copy of a Public Offering Statement (POS) or Prospectus. Either document contains all of the facts, figures, limitations and disclaimers that the state requires be disclosed to a prospective timeshare buyer.

    Theoretically, these two consumer protection measures taken together should provide the necessary layer of protection that a purchaser of a relatively costly “investment” needs in order to make an informed purchase decision. At least that seems to be the prevailing legislative wisdom.

    Let’s examine this premise a little more carefully - because certain strong psychological and behavioral tendencies may operate directly in opposition to these consumer protections.

    In virtually all states that permit timeshares to be sold within their borders, buyers statutorily are entitled to be presented with an exact copy of the Prospectus/Public Offering Statement (POS) as prepared by the Developer and previously filed with the state. The receipt of this document by the buyer must be prior to, or at least contemporaneous with, the purchase. Timeshares are marketed as same day “impulse” buys.

  • Are Timeshare Trial Programs Worth It for Consumers?

    Are Timeshare Trial Programs Worth It for Consumers? (Source: pexels.com - used as royalty free image)

    Say you’ve been lured into a timeshare sales pitch by pretty advertising or through the promise of a free gift, maybe even cash money. You’ve adamantly turned down the pitch, making it clear that you’re just not ready or willing to commit to the expensive, possibly-lifelong obligation that timeshare ownership brings.

    But then the salesperson brings out an alternative offer: Why not give the timeshare experience a trial run? For a small fee, they suggest, you can enjoy all of the perks of resort ownership, and then think about committing in a year’s time, once you’ve fallen in love with it.

    Sound too good to be true? Then it just might be.

  • Assessing CBS' "7 Tips for Avoiding a Timeshare Disaster"

    Assessing CBS' "7 Tips for Avoiding a Timeshare Disaster" (Source: pixabay.com - used as royalty free image)

    What consumer advice is being passed around the internet this week – and what new information does it offer to consumers wary of getting roped into a timeshare interest?

    Let’s break down some of the keen insights of Kathy Kristof’s “7 Tips for Avoiding a Timeshare Disaster,” published over at CBS News.

    “…if it can happen to a girl with a calculator and an eye for fine print, it can happen to you.”

    Throughout her piece, Ms. Kristof does an excellent job of illuminating the numerous “hard sell” tactics that accompany the timeshare sales presentation -  tactics so effective that they can even lure in a consumer protection expert.

  • Attending a Timeshare Sales Pitch Just to Get a 'Free Gift?'

    One of the most common tactics used by timeshare developers’ marketing teams is to offer a free gift to consumers who come and sit through a sales presentation.

    Whether the advertising copy or spokesperson is offering a free vacation, a cutting-edge piece of technology, coupons and rewards, or even a cash incentive, this tactic can be a powerful lure for consumers of all backgrounds, whose ears tend to perk up at the mere mention of the word “free.”

    This marketing technique is so common, in fact, that it has launched its own subcategory of internet content!

  • Better Vacation Options for the Price of Your Timeshare

    Better Vacation Options for the Price of Your Timeshare (Source: pexels.com - used as royalty free image) 

    Timeshare maintenance fees are part and parcel of timeshare ownership, and they tend to rise year over year, regardless of the rate of inflation.

    For many timeshare owners, high maintenance fees are a key factor pushing them away from the industry altogether, as industry surveys have indicated. This unhappiness with fees – which are piled on top of assessments, interest payments, and other expenses – is exacerbated by the fact that the average timeshare consumer is all but powerless to affect change or protest their fees, given the complex entanglement of most timeshare owners’ associations, boards, and management companies, which together comprise a system that empowers developers to run their resorts unchecked by engagement with or interference from the resort’s individual “owners.”

    The point? On average and across the board, maintenance fees are extremely high and likely to keep rising, and there’s very little to be done about it once you’ve signed on the dotted line. This is a major turn-off to many, particularly since vacation ownership originally rose as a more affordable travel alternative for many families. Today, however, the unchecked avarice of major developers has driven the price of buying into the timeshare industry up and up, to the point where many idyllic vacations are significantly less expensive than owning a timeshare interest and keeping up with its attendant fees.

  • Buying a Timeshare? Read the Fine Print

    Buying a Timeshare? Read the Fine Print

    Shell-shocked from a “hard sell” and still in the middle of vacation mode, many timeshare purchasers are reluctant to dive into the mountain of paperwork that comes after a same-day “see and sell” timeshare transaction. Similarly, the intense pressure and expectations that come with a roomful of salespeople render many timeshare buyers too sheepish to analyze the documents that are presented to them to sign at closing.

    However, it’s indescribably vital that would-be timeshare owners do their research before, during, and after their sale. The “fine print” and legalese that comes printed in that dense thicket of paperwork will massively impact their lives, possibly for years to come.

    Why comb through your paperwork with an eagle eye – and, perhaps, the assistance of an attorney? Because:

    There May Be Restrictions

  • Can a Timeshare Hurt My Credit Score?

    Can a Timeshare Hurt My Credit Score? (Source: Pixabay.com - used as royalty free image)

    Timeshares can easily become a highly expensive proposition over time. And as with any other high cost financial obligation, a timeshare can quickly drag down your credit report or even ruin your credit altogether if you don't pay attention.

    So just how drastically can owning a timeshare damage your credit score?

  • Can a Timeshare Redemption Company Really Get Me Out of My Obligation?

    Can a Timeshare Redemption Company Really Get Me Out of My Obligation?

    There are all sorts of reasons why you may want to get out of your timeshare contract. Maybe you can no longer afford the annual maintenance fees. Maybe you’re not able to travel to the resort destination. Maybe it was willed to you by a parent or family member. 

    Whatever the reason, many timeshare owners are eager to be rid of their timeshare obligations by any means necessary. For some, a timeshare redemption company seems like an attractive, low-hassle way to quickly be rid of a timeshare – but can a timeshare redemption company really get you out of your obligation as easily as they promise?

    What Is a Timeshare Redemption Company?

  • Can I Rent Out My Timeshare?

    Can I Rent Out My Timeshare? (Source: pexels.com - used as royalty free image)

    Suppose the owner of a timeshare interest can’t use her allotted time this year. Imagine a timeshare owner who’s falling behind on payments due to circumstances outside of his control.

    Given the questionable state of the timeshare resale market, what options do these consumers have for making sure their timeshare interests don’t go to waste? For many, renting their timeshare seems like the most viable option; some even see it as a way of turning the financial burden of a timeshare into a net positive gain.

    But is turning your interest into a rental the cure-all that desperate timeshare consumers dream of? Let’s take a look at just what it takes to rent out a timeshare.

    Many resorts require timeshare owners to rent out their interests or exchange their points through the resort company itself, meaning that the owners are beholden to a process that can be extremely complicated. Whereas a consumer at least has a modicum of control with a direct rental, when they must go through a resort, there is, generally speaking, no real way to independently prove whether the company rented your interest or didn't. To dissuade would-be timeshare landlords from seeking renters, many developers also make it complicated to rent out an interest, if they make the option clear or readily available to owners at all.

    Rather than interfacing with their resort company or management, many consumers instead turn to third party platforms online or in print, using classifieds to market their timeshare’s availability. And while there are certainly some organizations handling these matters the right way, consumers unfamiliar with the timeshare marketplace are bound to feel confused or overwhelmed the first time they enter one of these digital bazaars.

  • Can I Write Off My Timeshare as a Tax Deduction?

    Can I Write Off My Timeshare as a Tax Deduction? (Source: Pixabay.com - used as royalty free image )

    Often, timeshare marketers and salespeople will pitch their wares as a real estate investment. It’s natural, then, for many consumers to infer that their timeshare “ownership” will come with all of the attendant perks of deeded real estate ownership, including tax advantages.

    Come tax season, IRS agents and accountants are flooded with questions about timeshares. Is a timeshare, on its own, deductible? What about the loans taken out to pay for it? Or the annual maintenance fees that you’re liable to pay as a timeshare owner?

    As our own Michael D. Finn puts it, “only under the rarest of circumstances would the IRS allow any form of deduction on a timeshare purchase or interest expense.”

    Most fees that timeshare owners are likely to incur – including closing costs, special assessments, and annual maintenance fees, are not tax-deductible, which you can read more about here, via timeshare industry service RedWeek. Annual maintenance fees on a vacation timeshare – which can range from $500 to several thousand dollars every year – in particular, will never be seen as tax deductible, just as you couldn’t claim a deduction on general maintenance or repair on your primary home.

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