• 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?

  • 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?”

  • 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:

  • 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?”

  • 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 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.

  • 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

    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 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" (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.

  • 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!

  • 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?

    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? (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? (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.

  • Can My Timeshare Company Take Action Against Me?

    When the owner of a timeshare interest decides that they no longer want to keep up with their oft-costly and cumbersome obligation and decides to attempt to exit or cancel their contract, can the resort developer or any of its associated organizations take action against that owner?

    The short answer? Yes. Resort developers can and do take financial and legal action against timeshare owners attempting to leave their interest. However, they may not pursue these strategies as aggressively as some consumers may think.

    Debt Collection

    One of the most prevalent tactics used by resorts is to pursue the consumer for any debts that may be incurred when the consumer stops making their payments, which can occur for any number of reasons.

    Many timeshare interest owners stop making their payments when they begin the process of attempting to sell or exchange their timeshare with a third party; often, these owners are completely unaware that they are even responsible for keeping up with the financial obligation of their timeshare interest, due to poor communication on the part of their “relief” or “redemption” company.

  • Can the Developer Affect My Timeshare Resale? (Pixabay.com - used as royalty free image)

    There are any number of reasons why a timeshare owner may want to terminate or walk away from his or her obligation. Timeshare points are rigid, and a consumer busy with social, family, and career obligations may not be able to use their allotted weeks. Other owners often find themselves unable to travel due to health concerns. Still more simply can’t keep up with the major financial burden of timeshare ownership, which include assessments and steadily-rising maintenance fees, all on top of interest payments.

    When a timeshare consumer is ready to exit their obligation, a litany of possible avenues suddenly seem to open up. Should you rent out your timeshare? Turn to a timeshare redemption or resale company? Retain an attorney and go to the resort? Or try to resell your timeshare directly on the secondary market?

    Seeking both relief and, perhaps, a small chunk of change, many consumers first turn to the resale market, only to have a somewhat rude awakening: The timeshare industry and its actors have made it quite difficult to resell a timeshare on the secondary market.

  • Can You Trust a Timeshare Cancellation Guarantee? (Source: pixabay.com - used as royalty free image)

    Do these sound familiar?

    We guarantee that you’ll be able to walk away from your timeshare contract!

    If we’re not successful, you’ll get your money back – no questions asked!

    If you’re a consumer trying to cancel or exit a burdensome timeshare contract, we’re willing to bet you’ve seen plenty of ads and offers that sound a lot like those. Maybe they came from a site that seems reputable, maybe from one that seems less than trustworthy.

    But after you see enough of the same promises repeated again and again during your eager search for timeshare cancellation help, you may start to believe these claims. Certainly, we’re not trying to say that every claim you read online is a falsehood or exaggeration (after all, you’re almost certainly reading this post on a computer or smartphone!).

    For any consumer, nothing brings more relief than the sight of the phrase “guarantee.” But as any consumer protection advocate will tell you, it’s highly important to always take that word, or similar claims, with a grain of salt.

  • Class Action Litigation: A Savior for Trapped Timeshare Consumers?

    Michael D Finn Timeshare AttorneyWe all know a little bit about class actions. Over the years, many of us have probably received a letter or postcard advising us that we may be potential class members. Again, many of us, perhaps sensing that our individual recovery may not be worth the effort, haven’t taken the plunge. Still, a timeshare purchase could be a horse of another color. If only some enterprising lawyer would consider whether a potential class action could help extricate us from our lifelong timeshare obligation! Of course the beauty in this wish is that as a class member, you wouldn’t have to actually hire the lawyer, he or she would be paid from the proceeds of the case (assuming it’s successful, of course).

    As a lawyer with some class action experience and who has primarily represented consumer timeshare owners for a considerable period of time, I can report to you that class actions do play a role in our consumer timeshare practice, but that the role is more limited than we would like it to be. The explanation lies with the kinds of cases that can be effective class action cases, and more so if they’re timeshare related.

    Most of our clients tell us that they were deceived during their initial timeshare presentation and that a lot of what they were told was simply not truthful, that they relied upon the veracity of the sales staff and it was only later, when they attempted to utilize their purchase, that they learned a different story. Of course this realization did not come during the 5-10 day rescission period (varying by state) provided by law, and so the hapless owner came to realize that the resort would not help them and, furthermore, that the purchase contract they signed is considered to be legally binding and worse, in the absence of a way to unload their purchase on someone else, there is no exit scenario built into the contract. Essentially, in the absence of a viable resale opportunity, these contracts become lifelong obligations!

  • Dispelling the Timeshare Value Myth (Source: pexels.com - used as royalty free image)

    As someone with a strong background in accounting, I always assumed I inherently understood the definition of the word “value.” Now, I readily concede that the word “value” can, depending on its usage and context, represent several meanings and variations. When used as a verb, one can, for instance “value” something as nebulous as a “moral percept.” As a noun, things of “value” can, and often do, reference monetary significance, but can also apply to matters of emotional “value.” Therefore, it may be somewhat understandable that when one references the value of a product, like a timeshare interest, that attempts to embrace qualities of real estate and/or lifestyle, such as a multiple-location resort, that value can become a more elusive concept, perhaps a little more difficult to comprehensively nail down. Indeed, the “value” of a vacation experience becomes less quantifiable by a fixed number since, arguably, “beauty is in the eyes of the beholder!”

    Balderdash! Poppycock! Hogwash! Propaganda propagated by the timeshare industry to diffuse and deflect the common criticism that their products lack actual resale value! Yes, of course the term “value” can have different meanings depending on the context. However, in this arena we are not speaking of subjective niceties, we are addressing the issue of what can one anticipate receiving in cold, hard coin of the realm when one needs to unload a no-longer-wanted timeshare!

    The Value of a Timeshare

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