Missouri Attorney General Eric Schmitt has filed a lawsuit against four timeshare exit companies, operated by a single individual.
The complaint alleges the timeshare exit companies, at the direction of the owner, solicited large payments from customers by promising to either transfer or terminate consumer timeshare interests within one year or the companies would buy out the interests themselves.
While many people love their timeshares purchases, a large number later have a case of buyer’s remorse. Unfortunately, some timeshare contracts make it difficult to sell or otherwise resolve the obligation. Timeshare exit companies have sprung up in recent years, offering help to timeshare owners who want to stop paying for their units.
‘Found themselves in arrears’
The complaint names Vacation Consulting Services LLC, VCS Communications, LLC, The Transfer Group, LLC, and Real Travel L.L.C. The suit says after being paid large fees by timeshare owners, the companies failed to provide the result they promised.
“The exit groups did not make those payments as promised,” Schmitt’s office said in a press release. “As a result, many customers have found themselves in arrears with their respective timeshare holding companies.”
One reason timeshare contracts are so hard to reverse is that the transaction can be highly complex. In fact, there are two principal types of timeshares, both very different.
If it is a “deeded contract” timeshare, the buyer is one of 52 owners who is allowed to use the property one week out of the year. The transaction is a real property sale and the buyer is on the hook for a portion of real estate taxes, as well as maintenance fees.
Other timeshares are sold with “right-to-use” contracts. The buyer has no property ownership and they only have the right to use the property -- usually for a week each year. But at some point, the contract ends and all rights go back to the owner.
Depending on the type of ownership, exiting the contract may carry different levels of complexity. Schmitt says owners who want out should talk to the timeshare operator first. Ask if the operator offers a deed-back or exit program. If talks are not successful, Schmitt says that may be the time to consult with an attorney.
If you are considering the purchase of a timeshare, buying from a reputable company that will explain all options could prevent future heartburn. ConsumerAffairs has collected thousands of reviews of some of the best timeshare companies here.