Three terrifying contract terms in timeshare scams

The latest episode of Last Week Tonight with John Oliver skewered the vacation home industry and shed light on how timeshare scams prey on ordinary people enjoying a cheap, relaxing getaway. However, for families with fixed incomes or people who enjoy the familiarity of revisiting the same place every year (a fave is a fave), timeshares or vacation club ownership is worth the investment.

According to Forbes, there are a few pros that make them appealing: “For traditional timeshares where you actually stay in the same unit every visit, you may enjoy the benefits of owning a vacation home with far fewer responsibilities (but also less control over the property); with points-based timeshares, you may have flexibility to bank or borrow points when you want to skip a year or splurge; and you may be able to visit partner resorts if you don’t want to go to your home resort every year.”

The British talk show host details what can be problematic when considering timeshare ownership. But like with any major purchase, it pays to know all the sides. Last Week Tonight’s segment, “Timeshare Scams,” highlights three things buyers should know upfront.

Number 1: Timeshare contracts are IN PERPETUITY

That means not just for your entire lifetime, but they potentially encompass the lifetime of your entire family line. When you die, they pass on to your firstborn who has nine months to file the paperwork to decline the offer. Even if they’re successful, the contract then passes on to their sibling who also has nine months to try to get out of it. This cycle continues ad infinitum.

Number 2: Timeshares have NO value as an investment strategy

Timeshare contracts are so difficult to get out of and contain so many hidden costs and liability that they are being listed for free on websites. Namely, that investment that cost them more than $20,000 is listed as $0 for anyone who wants to take it over.

Number 3: Timeshare contracts permit the sales staff to LIE to you

Timeshares are not sold directly by the true property owner or real estate company and are instead sold by middlemen who are empowered to say whatever they can in order to sell you a vacation home. The contracts have a clause that exonerates the real property owner from all misrepresentation by the sales staff selling you the vacation property, even to the extent of misrepresenting the return on investment, cost of additional fees you might encounter or the practical administrative realities of accessing your vacation rental.

Those are just three things to watch out for, but there’s a lot more terrifying clauses and consequences to the timeshare contract scam. You can watch the entire segment here:

This story was originally published March 20, 2023 at 4:53 PM with the headline "Three terrifying contract terms in timeshare scams."