The Last Legal Fraud
"There's no free lunch," and almost nothing exemplifies this more than the timeshare industry. The horror stories that come out of this market are legion. Companies like Diamond Resorts and Wyndham consistently overpromise, and consumers have no recourse but to accept the under- deliveries. So how does such an awful product continue to exist?
Well, like P.T. Barnum said, "There ' a sucker born every minute." These companies prey on people with "free" tickets to everything from restaurants to amusement parks. All one must do is attend a high-pressure sales meeting and be incarcerated for 3-5 hours. Of course, many don't survive the pitch without signing up for the most expensive vacation they'll ever go on.
I've never sat through a timeshare pitch, but I imagine they use all sorts of sales tactics to reassure a prospective buyer that they're making a good "investment." But if it's an investment, then how come owners can't give them away? Sure, you occasionally hear a story about someone making a profit on their DISNEY timeshare, but anyone who's ever visited their properties already knows that company is impeccable when it comes to customer service.
I'm an avowed capitalist, so I applaud a firm when they find a way to make a profit while fulfilling a critical need. The problem with the timeshare industry is that it convinces people they will have a more affordable family vacation anywhere the company owns a resort. The reality is closer to a camel fitting through the eye of a needle. With annual maintenance fees, change fees, special assessments, booked schedules, and blackout dates, you might as well book yearly vacations to the Dubai Ritz Carlton.
An attorney recently called into The Dave Ramey Show to share his professional strife when dealing with the timeshare industry. He described it as the "last legal fraud in America." He shared his stories of dealing with the courts while protecting his clients from the endless barrage of fees and fraud. The resorts have deep pockets, though (lined by their fleeced customers), and they've been successful at dragging attorneys through sham litigation. The cases go on forever, and ultimately, the resorts force attorneys to give up to protect their careers and personal finances.
In the 2012 documentary The Queen of Versailles, viewers discover the "queen," Jackie Siegel, is married to timeshare mogul and Westgate Resorts CEO David Siegel. The focus on consumption and materiality will require you to take a shower after watching the film. Still, the main takeaway is there's big money in timeshares, and ordinary people have put it there. Westgate made Siegel so wealthy, he and Jackie are building a 90,000 square foot residence featuring nine kitchens, 30 bathrooms, 14 bedrooms, a full-size roller rink, a bowling alley, and a 30-car garage.
Like student loans, please stay away from this slimy industry and become an evangelist against it.