Who’s to blame for this timeshare disaster?

Consumer advocate William Leeper recently accepted a “Mission Impossible” case involving a questionable timeshare purchase in Mexico. What’s that? We had you at “timeshare”? But it gets worse. Much worse. I’ll let him explain.

Today’s timeshare story comes from reader Mark Golder and the timeshare he bought — or thought he bought — from Grand Solmar in Cabo San Lucas, Mexico.

I’ll let him pick up the story.

The total purchase price was $21,190. We paid $11,190 down at the time. The salesman told us many things that didn’t hold true.

Here are three examples:

We could trade our week in Cabo for two full weeks anywhere else in the world.

Yearly dues would be $645 for the first year.

We could get half price on our membership to Interval International (the company that handles the swapping of weeks) if we signed up for five years.

When Golder returned to the States, he discovered these discrepancies, and contacted Grand Solmar to attempt to cancel the membership, but was told “no.” So he contacted the salesman whose email address he still had, and the salesman basically informed them that he was doing his job, and their disclosures are not clear.

Golder contacted his credit card company to initiate a chargeback.

Eventually, Grand Solmar refunded $2,000, but pocketed $1,190 as “legal” fees, and kept $8,000 as a “termination” fee.

Where did things go wrong? And what can you do to protect yourself the next time you’re invited to a timeshare presentation?

The first problem was the matter of trading weeks — one week in Cabo for two weeks “anywhere” else.

Well, that may have been what the salesman said, but in fact, he could have traded his week in Cabo for 1 ½ weeks anywhere else. Oops, did the salesman misspeak? Without any written agreement to reflect that promise, the only thing to go by is the contract. And it shows 1 ½ weeks.

On the second issue, yearly dues being $645, the contract in this case is written as follows: “Maintenance fees may be increased by “SELLER” according to inflation. The current Maintenance Fee for 2013 is $645 US Dollars.”

In this case, it would have been perfectly legal for Grand Solmar to charge a maintenance fee of $20,000 per year, and could have probably gotten away with it.

On the third issue of half price membership to Interval International for a prepayment of five years, the actual words from the salesman are, “You are right about the prepaying for five years and getting a 50 percent discount. The way that works is if you pay for 4 years you get the fifth for free. Not quite the same, but still a good deal.”

Oops once again — and in this case the salesman even admitted he fudged the truth.

Here’s a bit more from the salesman just for your reading enjoyment.

There is a lot of Information that is covered in a short period of time and in my experience a lot of what we talk about and write down on those yellow pads gets forgotten by the time that our clients get a chance to review what they purchased.

I agree with you and I think that the resort should provide more disclosure documentation regarding fees, especially for Interval International. Hopefully they will start to do that more in the future.

So, what point have I tried to make here?

Always, always, read your contract before signing it.

Everything Golder brought up in his message was based on what he was told by a salesman, and these particular points seem to have been misrepresented by the resort, or by the salesman.

In the end, Grand Solmar and the salesman both ignored my messages to them. I’ll continue to ask, but let Golder’s misfortune be a warning to all of you. If you don’t pay attention, and just idly sign here and initial there, this could happen to you, too.

William Leeper is a consumer advocate based in Waldron, Ark. He mediated this case on behalf of one of this site’s readers. If you’d like to help by becoming a volunteer mediator, please send us an email.

Who's to blame for this timeshare disaster?

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  • Rebecca

    I feel bad for the guy, I really do. BUT, it’s on him for not reading what he signed.

  • technomage1

    An $8,000 termination fee? Really? Time to contact a lawyer, not a consumer advocate.

  • sirwired

    Chris: Perhaps you can subject yourself to a timeshare pitch and report back to us on how it goes… I think it would be a fascinating little bit of “undercover” work.

    Really, blame can be shared by all three. The salesman/resort can be blamed for resorting to the high-pressure sales tactics that appear to be universal in the timeshare industry. You NEVER get an opportunity to actually read all the supporting documentation before you are pressured to sign, sign, sign. (The fact that this appears to be universal should be a sign to consumers that perhaps timeshares in general are a horrible deal when purchased “new” from the developer. If the terms were good, the pressure to sign would be less.)

    The consumer can be blamed for signing on the dotted line before reading everything he was handed.

    I went to a pitch once and it was like something out of a consumer-advocacy textbook on things to watch out for at a skeevy used-car dealer. (Seriously: “What do we have to do to get you to buy today?”, juggling interest, term, and down payment to tell me what I wanted to hear, a “closer”, constantly shifting packages, etc.) I felt like taking a shower afterwards.

  • http://elliott.org Christopher Elliott

    I sat through a presentation a few years ago for a Disney timeshare. But maybe it’s time to subject myself to one again, just for the sake of research. By the way, this story was researched and written by Will Leeper, one of the consumer advocates who helps with some of the cases we get. He’s still working on the case.

  • Cybrsk8r

    I was duped into one in Orlando as well. After about 45 minutes, I attempted to leave. One of the henchmen at the door physically prevented me from leaving, at which point I returned to my seat and quietly dialed 911. When the officer showed up, the salesman and his “assistants” suddenly became very cooperative.

  • http://elliott.org Christopher Elliott

    Wow, that’s some story. Next time I write about timeshares, I’ll have to include that one!

  • Cybrsk8r

    Where did things do wrong? It’s a timeshare. Turn over any rock in the travel industry and a timeshare salesman is sure to slither out.

    Grand Solmar. I’ll be remembering that name. But not for any reason they would want.

  • Raven_Altosk

    Timeshares are scams to begin with. If someone has to give you something to get you to buy it (a “free” vacation, a steak dinner, etc)…RUN don’t walk.

  • sirwired

    Nah… not Disney; too high-class! You need to subject yourself to one of those low-rent outfits in a middle-class vacation town that promises free tickets to Medieval Times or something. I’m sure they infest parts of your hometown of Orlando like cockroaches.

    Or, if you are truly feeling like a glutton for punishment, one of those “Three-night free cruise”-type deals, where you have to go through HOURS of timeshare pitches! Of course, you couldn’t actually write the article until after you recover from the inevitable alcoholic bender afterwards, as you attempt to dull the painful memories.

    One of my co-workers, a devout Muslim, had an easy way to get out of the presentation. He simply said, up-front, “My religion does not allow me to borrow money with interest, and I don’t have enough cash to buy.” Reply: “Oh. Well you can pick up your free tickets on the way out then; go through that door over there.”

  • Steven Scholnick

    Wow. I agree with sirwired and all three are to blame, but you should never subject yourself to a timeshare presentation while on vacation. If you want to invest in a timeshare, do that back in the comfort of your home with plenty of research.

  • jerryatric

    That’s what we did. Years ago invested in a very inexpensive timeshare resale. The salesman came to our home, explained, & we went through it all. We originally used another timeshare company but switched to Interval International. Turned out to be a great move. Have enjoyed Exchanges & Getaways for many years at some very nice places, including in Europe.

  • Bettina

    I this case, all three share some of the blame, so I did not vote.

    The consumer for signing something he didn’t read. The salesman for not being clear, and the company for not providing clear and concise information.

  • Kasiar001

    All that has been said and written about purchasing time shares, the horror stories and the basic principle that nothing is for free, not weeks, not tickets to shows, nothing. Yet dumb people still get caught over and over again. If you have to sign up today then the deal is not worth taking, ever. Until people learn Chris will always have plenty to do.

  • Carchar


  • MarkKelling

    OK, I guess this is an expensive lesson for the OP as well as another reinforcing warning for the rest of us. Time shares are bad.

    I have never understood the appeal of timeshares. You pay someone a whole lot of money so you can go the same place for a week every year. And then you pay a “maintenance” fee every year that is close to what you would pay to rent a hotel room in the same area for that week.

    I would rather just rent a place wherever I want to go that year and be done with it. If I can’t go on vacation one year, I spend nothing. If I want to go somewhere completely different, I go. I spend as much time as I want when I get there. I go as often as I want. (Provided of course I have the vacation time available and the money to pay for it!) I don’t have to pre arrange a transfer of my pre assigned week if I choose to go at a different time of year.

  • http://www.parafriv.net/ Para Friv

    hihi. I agree with sirwired and all three are to blame, but you should
    never subject yourself to a timeshare presentation while on vacation. If
    you want to invest in a timeshare, do that back in the comfort of your
    home with plenty of research. Thank you so much.

  • ag4square

    someone who sits through a presentation while on vacation usually is trying to get something for nothing (a free night in a hotel here, dinner and drinks there) as an enticement. If you actually sign on the dotted line you deserve what you get. You could go to a hotel in Cabo for 20 years probably for the cost of a time share and not be on the hook for anything but your own good time.

  • Barry Moss

    Chris, I’ve sat through a Disney Vacation Club presentation as well as one other. Disney was definitely low pressure by comparison–none of this “you have to sign today to get the deal” crap. I did go back and purchase a DVC membership 6 months after I went through the presentation and 13 years later I’m still happy with it. But I am so glad I didn’t get into one of the Mexican or Vegas timeshares that I hear so many horror stories about.

  • Annie M

    I don’t understand the whole concept of timeshares. For what consumers pay for this week they buy plus the annual fees, they can do a few weeks vacation every year at different places around the world and it costs less than their timeshare week. The loose way these contracts are written, the consumer can pay a lot more later on down the road.

    Anytime a consumer is pushed to buy right then and there without being given time to check out or think about an offering, it is NEVER a transaction that is beneficial to the consumer.

  • Annie M

    I’ve sat through several of these. They will say anything they can to make that sale and get very aggressive. There is no time to think about what you are purchasing and it’s always they must buy at the time, the deal is only good for that day.

    When you purchase these things in foreign countries you are usually not covered under any of the consumer laws we have in the US such as being allowed to cancel within 3 days.

    If timeshares were a good deal you these companies would give you time to do your research. Buyer beware.

  • Annie M

    I had the same thing happen. When I entered the room I told the salesman I was only staying the 45 minutes I was required to. When I got up after 45 minutes, the salesman tried to bar me from leaving and I told him I was calling the police. He let me go and cursed me out.

  • sdir

    He initiated a chargeback based on the misleading and outright lies he was told, what happened there? Unfortunately he did sign the contract, so maybe the card company decided against him?

    I’m also curious if the legal fees and termination fee were included in the contract. If not, shouldn’t that be something he can ask the card company to refuse payment on, seeing as the company was “technically” giving him a refund (sorta).

  • Charles B

    Agreed – you won’t see the full pressure version from Disney / DVC. Don’t get me wrong, it’s still a time share offer, but it’s nowhere near as bad as they get.

  • Cybrsk8r

    Yea, what happened to me wasn’t Disney. Though the enticement was four free Disney “Park Hopper” tickets, wihch, at the time, was about $250 or so.

    It was some outfit I don’t remember the name of anymore. They had a booth at the off-airport Thrifty car rental location near MCO.

    BTW. I was so happy to get out of there, I didn’t even ask for the tickets. They were probably counterfiet anyway.

  • vacaygirl

    The “Time Shares” and “Vacation Clubs” continue to prosper because people (ahem, Americans) continue to buy them. Not all of them are crooked though, and some do deal fairly and will honor the cancellation period. My point being, these “clubs” will never go away as long as they are profitable, which they are….vacationers continue to purchase them, and they continue to turn a profit. Much to the dismay of travel agents and OTA’s everywhere. Like any other business transaction though, this customer should have read the fine print, and he didn’t.

  • LeeAnneClark

    This is exactly what I’ve been saying for years. I have never found a timeshare situation that was a better deal than just finding a nice hotel or resort wherever I wanted to go and paying for it.

    They always say “yes but once it’s paid for you can keep using it, then pass it down to your children”. But they leave out that the so-called “maintenance fees” continue to go up, and you STILL end up paying a price comparable to a nice hotel/resort. And you’re stuck going to just THAT place.

    “Yes but you can trade it and go wherever you want.” Yeah, have you ever tried to actually FIND a trade at a place you want to go, at a time you want to go at? Virtually impossible.

    Skip the timeshare. Book a hotel.

  • bpepy

    We sat through a timeshare sales pitch in Cabo. The price kept getting lower, the deal “better” and still we resisted. Finally the woman gave up and told us that we reall wouldn’t fit in there!!! We did get a bottle of Kaluha out of it.

  • Monica Lynn Kennedy

    The DVC is a much better timeshare setup than most of the high pressure resorts. DVC is no pressure sales, and the salesman are not paid commission. It doesn’t matter to him if you sign or not, he gets the same paycheck. The salesman was more concerned about what our vacation style was and if it made sense. If it didn’t, he freely admitted that DVC might not be worth it. My husband and I actually sat through the presentation a few years ago and put down a down payment for BLT (Bay Lake Towers at the Contemporary), but had to pull out for personal financial reasons. Many of my friends are DVC members and have been thrilled at every step. I’ve stayed with some at DVC resorts and was impressed. Plus, it is totally flexible. Just because you buy into one resort doesn’t mean you ever have to stay there. People can own a share of Animal Kingdom, but stay in the Treehouses or even Aulani, HI. I can’t wait until I’m in a position to try again.

  • Carver Clark Farrow

    I usually don’t shill for attorneys but it might be worth it to discuss with an attorney, travel agent, or real estate friend before getting involved in a time share venture. I’m sure that there are some time shares that make sense, but probably not many.

    My legal advice is the same: never, ever, ever, sign anything that you are not given an opportunity to read. I promise you, its a bad deal. Even better, ask if you can take it to your attorney to review. If they won’t let you, then its time for you to leave. Quickly.

  • Raven_Altosk

    Somehow I can’t imagine Di$ney being any more “magical” than any other timeshare scam….

  • Charles

    I just wish people could do simple math. If they sell 52 weeks at $21,190, that’s $1,101,880. Now, was that really a million dollar property in Cabo? And, 52 owners at $645 is $33,540 a year for “maintenance”. I wish I had $33,540 for maintenance on my house. Then, if you look, people are renting their condo’s in that resort on Vrbo for about $1700 a week. You can stay one week a year for 20 years for $21,190. In fact, if you could get 5%, you could just put that money in the bank and go every year forever. Don’t people do simple math before they shell out this type of bucks?

  • sirwired

    International chargebacks are very different from domestic ones. The law doesn’t require the bank to do bupkis unless your credit card number was outright stolen. Whatever it is you signed for on the dotted line, it’s yours. They don’t get in the middle of contract disputes in foreign countries like they do for domestic purchases. This protects both consumers and merchants.

  • omgstfualready

    I’ve known of only two positive experiences with a timeshare, one was actually my parents. They went to Aruba every year and had been staying at the timeshare facility and enjoyed it (my dad had some medical needs and it was hard to find locations that could accommodate him without making him feel ‘different’). So they decided to buy the timeshare unit for the week they were renting since it saved them money overall. They did eventually sell it but the timeshare place offered them a good deal to buy it back from them. I know it is a rarity to have a positive experience but I think since they knew the place and how it was run they were able to go in eyes open. I still wouldn’t buy one though!

  • http://gspirits.com/ Zod

    For $21k you can put a nice downpayment on a purchase of a condo on the big island. Rent it out and make a little extra money too!

  • Judy Serie Nagy

    Hard to believe that people still fall for this stuff.

  • Judy Serie Nagy

    Doing a timeshare investigation personally is a great idea. But I don’t think the people who fall for this garbage read your columns.

  • Kevin Mathews

    ok, I’ve read through all the comments, and I agree that some amount of blame goes around to everyone.
    BUT, who in their right mind puts down $11K and doesn’t read the contract to know what they are getting, not only for that $11K, but the other $10K they’ll still owe afterwards…
    Not all timeshares are bad either. My parents own 7 weeks worth of time, 2 weeks in the Outer Banks, NC and 5 weeks in Grand Cayman… They’ve had great experiences with both. All of them they own outright as long as they stay current on their maintenance fees. The 2 weeks in the Outer Banks are at a place that participates in RCI, so we’ve swapped those many times.
    The key here is know what you’re getting when you sign on the line.
    As far as the Sales Pitches go, some of these are a great way to get a long weekend away for minimal cost. May place will offer you 3 days at their resort as long as you spend a little time sitting through their presentation on buying a timeshare. As long as you go into it knowing that you won’t be buying anything, what’s 90 minutes of wasted time for a “free” long weekend away? Seems like a pretty good tradeoff to me…

  • Freehiker

    I agree that Timeshares are a total scam. That being said, I have gone on several “free Disney / Universal tickets” timeshare sales pitches.
    I have zero interest in buying a timeshare and would never do so, regardless of the price. I make it very clear to the sales person I am only there for the freebie. 2-3 hours later I have always walked away with the tickets.
    I just don’t feel bad for people that sign things they don’t understand. If you can’t control yourself, don’t put yourself in that situation.

  • m11_9

    Could this be a better deal than the years of maintenance fees on an asset you are stuck with? This could pay for itself.

  • Mark Cuban

    Once again, stupid tax.

  • Lindabator

    Actually, the hotels don’t generally run the timeshares, and most folks in the hotel industry will tell you they can’t stand losing clients to the timeshares, either.

  • Thoroughlyamused

    Wow, over 60% of people believe the consumer is to blame for not reading what they signed…had this been a rental car agency selling CDW, everyone would be shouting SCAM and advocating for a full refund. I guess car rentals are the only situation where customers are excused from reading what they sign (cuz, ya know, the flight was long and tiring).

  • Nikki

    People never fail to amaze me. It’s all driven by greed, isn’t it – whether it’s the traveler/”mark” getting a “promised” freebie, or the salesman/scammer making promises he knows no one’s liable to keep…

    It’s getting harder and harder to be surprised by the motives and actions of anyone out there. A large chunk of what I’ve seen here has been nothing but carelessness on the traveler’s part. I just cannot imagine why people can’t be much more careful with their money… why they don’t demand clarity and/or proof before they sign off on ANYTHING that involves a single cent of their money.

    …thank you for letting me rant. lol