Getting smooth-talked into buying a timeshare after a free weekend stay at a resort condo is one thing. But consumers increasingly are being ripped off when they try to unload or get out of a vacation-related contract, as well.
The problem often starts when the annual maintenance fees inevitably skyrocket for timeshare owners. Many retirees who already are living on a fixed income say they cannot afford to dish out $800 to $1,500 a year for a timeshare that frankly they hardly ever use.
Sometimes, the consumer owns more than one timeshare so they're looking at even more money in fees.
Enter the scammers who roll out free dinners and slick slideshows to trick you into spending money on something else.
Paying up front
One Detroit area couple complained that they attended a presentation in Troy for a company called The Transfer Group.
After a high-pressure sales pitch, the couple paid $14,000 upfront when they were convinced they needed help to get out of a timeshare, according to a complaint filed with the Better Business Bureau.
The couple thought they were handing over a fat five figures to dissolve three timeshare contracts within a year.
After a year went by, the man even ended up driving to Springfield, Missouri, where the Transfer Group is located. Some issues were resolved but other headaches continued, according to the BBB.
Two contracts ended up being dissolved long after they were supposed to be completed.
But the couple received a refund check for about $1,300 that ultimately bounced. The check was supposed to be for maintenance fees that they also had paid to The Transfer Group. Eventually, after complaining more, they did receive that money.
But the third timeshare was never dissolved. The couple is still paying maintenance fees on that contract with no sign of anything being resolved.
The Better Business Bureau said Wednesday that more than 350 consumer complaints have been filed against a string of timeshare-exit businesses based out of Springfield, Missouri, over roughly a two-year period through March 1.
Consumers said they paid out more than $2.2 million for timeshare relief work that was never done or completed.
We're looking at losses that range from $1,000 to $30,000 a pop after failed efforts to get out of their timeshare contracts. In some cases, consumers have complained that they were encouraged to put that money on a credit card.
"These companies may be headquartered in other states, but they are seeking out residents all across the country," warned Melanie Duquesnel, president and CEO for the BBB serving eastern Michigan.
Consumer complaints online also involved companies called Mutual Release Corp. and the Principal Transfer Group.
One couple said they attended a seminar given by the Mutual Release Corp. on how to exit your timeshare about a year ago. They paid a fee of more than $7,600 to work with the Principal Transfer Group, a team of lawyers.
After a year went by, the couple said they had not heard anything, according to an unresolved complaint filed with the BBB in April.
The couple said someone from the Principal Transfer Group later informed them that the company was no longer in business.
"We have a document stating Money Back Guarantee," the complaint said.
Another online complaint filed in late March relating to the Mutual Release Corp. said: "We went to a dinner and this company promised to get us out of our two timeshares. We paid them $10,049 upfront." Nothing was done.
Then, another group demanded an extra $5,300 from the consumer to finish the file. "They said they were not associated with Mutual Release and they didn't know where they went," the consumer said. "I cannot afford to pay $5,300 more. My husband is very sick now and I can't even use them."
Retirees are also warned to watch out for unexpected calls from companies that claim to have a buyer for your timeshare.
The Federal Trade Commission took action a year ago against Florida-based Timeshare Resales, which called consumers and claimed it had a buyer on the line. All the consumer had to do was hand over $500 to $2,500 for fees to start the process.
But, according to the FTC, the company did not sell the property quickly – or even at all. And, no surprise, the company would find reasons to ask for additional fees and refuse to grant refunds.
What should you do?
Don't send good money after bad. Typically, you should avoid spending money to hire a third party to negotiate relief from a timeshare.
Talk with the timeshare operators first. It may be possible, according to the BBB, that the business offers a deed-back or exit program already. If not, consult with an attorney to see if there are other options.
Remember a written guarantee isn't worth much if the company is not legitimate.
Be very skeptical about offers to trade out timeshares for vacation clubs or points programs with low-cost travel services.
This article originally appeared on Detroit Free Press: Exiting a timeshare could be another route to a rip-off, Better Business Bureau says