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:
1.) The statutory rescission period, which varies by state from five to ten days
2.) The buyer’s receipt of a state filed copy of a Public Offering Statement (POS) or Prospectus. Either document contains all of the facts, figures, limitations and disclaimers that the state requires be disclosed to a prospective timeshare buyer.
On paper, these two measures should offer an adequate level of consumer protection to buyers who are on the fence about their decision to purchase a “same day see and sell” timeshare. On the other hand, one could certainly make the argument that these protections fail to account for the interplay of psychology and timing between the receipt of the POS and the minimal time allowed for rescission.
Specifically, the issue stems from the treatment of timeshares as “same day” purchases; while they are often pitched and advertised by marketers and salespeople as real estate investments, timeshare interests, unlike houses or condos, are sold very hastily, with the pressure being put on to tour a resort and close the sale all in the same day.
This puts consumers at a disadvantage in a number of ways. In the first place, the pressure to see and sign in the span of a few hours makes it all but impossible for a consumer to consult with an accountant, attorney, or real estate agent, all of whom could offer vital advice and insight into the potential pitfalls of committing to a timeshare.
Perhaps even more importantly, this method makes it quite difficult for many consumers to accurately read, understand, and act on their POS and the terms of rescission therein. Remember that our hypothetical letter writer was lured into a sale while already on a vacation, and that the documents given out at closing could number in the dozens of pages and include purchase contract, acknowledgements, disclaimers, exhibits and attendant schedules, all presented in language that can be difficult to parse.
While it may be within the bounds of the law, can we really expect a person actively on a vacation to sit down and sort through all of this dense legalese? By the time the consumer of our tale gets back home, where he or she can use the internet or the services of an attorney to do their due diligence about their purchase, it could well be too late to act on the terms of their rescission.
And that rescission? Besides the brevity of the window available, rescission procedures are often unfriendly to consumers by design; typically, a letter of rescission must be composed and mailed to an address that can only be found by a careful review of the purchase agreement, which is often not the resort address.
And, while the rescission procedure language is statutorily required to be in larger point type and located close to the signature block, there is no state law or rule requiring the resort to provide any separate rescission instructions or advice at closing, either oral or written. Most resort salespeople, indeed, will avoid initiating any conversation about rescission periods or procedures; those that do, or who are asked about them, are largely free to say whatever they’d like, given the existence of what we call the “salesman’s license to lie” clause, language embedded in many timeshare contracts that states that the purchasers did not rely on any oral representations when making their timeshare purchase decision.
So what options are available to consumers who feel stuck with their timeshare, given the many pitfalls of the secondary market? In most cases, we would recommend consulting with an attorney; having legal assistance on your side gives you significant leverage when it comes to negotiating with your resort, in addition to offering certain protections from debtors.
Have any more questions or concerns – or a horror story you feel our team needs to hear?
Led by Attorney Michael D. Finn with 50 years of experience, the Finn Law Group is a consumer protection firm specializing in timeshare law. Our lawyers understand vacation ownership as well as the many hazards of the secondary market of timeshare resales. If you feel you have been victimized by a timeshare company, contact our offices for a free consultation. Know your rights as a consumer and don’t hesitate to drop us a line with any questions or concerns.