Time share sales: hard sell or scam?

Jake Azman/Shutterstock
Jake Azman/Shutterstock
Even though Igor Pavlovic and his wife consider themselves experienced consumers, they say that nothing could have prepared them for the sophisticated and aggressive sales pitch for a Wyndham time share that they recently endured in San Antonio.

The couple had been lured into a formal presentation with promises of “free” dinner and show tickets. “Once we got there, two salesmen gave us a high-pressure sales pitch,” says Pavlovic, a retired information systems consultant from Palm Beach, Fla. “Of course we liked the offerings and savings, but there was no way for us to verify their claims.”

You can probably guess what happened next. The Pavlovics bought a time share and then tried to cancel it. Even though the salesmen had promised that they could get a full refund “at any time” before using the benefits, the contract said otherwise. Now they were on the hook for $18,000, which didn’t include $650 in annual maintenance fees.

“It was all a lie,” says Pavlovic. “A scam.”

A look at the time-share industry’s numbers suggests that there’s a reason behind the assertive marketing techniques. The recession hit the industry like a wrecking ball hitting a flimsy condo. Sales dropped from half a million units in 2007 to 353,822 in 2011, the last year for which numbers are available, according to the American Resort Development Association (ARDA), an industry trade group. That has made a business already notorious for hard selling sell even harder.

The Pavlovic presentation raised a few concerns, including the aggressive techniques employed and the alleged misrepresentation of the cancellation terms, according to Orlando-based time-share expert Lisa Ann Schreier. “It’s horrible,” she adds. “Just horrible.”

But calling it a scam might be going too far, she says. After all, Wyndham offers real vacation resorts in some of America’s most popular destinations. It’s just that Pavlovic’s time share was sold to him in a way that he believes is less than honest, and that many of the benefits, such as low rates for accommodations, didn’t meet his expectations.

A Wyndham representative says that the company did absolutely nothing wrong. After hearing from Pavlovic, the company reviewed his transaction. “The investigation into Mr. Pavlovic’s claims showed no indication that the sales representative engaged in any improper activity or violated any of our comprehensive sales compliance policies,” says Lisa Burby, a spokeswoman for Wyndham. “In fact, we have never received any consumer complaints about this sales representative that suggest he does not follow company protocol.”

Last year, Wyndham’s San Antonio sales center conducted more than 15,800 tours. Of those customers, less than one-quarter of one percent complained about their experience, according to Burby. “While we strive to have no complaints,” she says, “we believe that this rate, which is well below one percent, is a positive reflection of our company’s dedication to our service philosophy.”

But talk to travelers who are accosted by time-share salespeople on the Las Vegas Strip or International Drive in Orlando, and you’ll hear another story.

Jennifer Moore, an attorney from Minneapolis, says that she recently sat through a sales presentation in Las Vegas in exchange for “free” tickets to a show. When a representative insisted that she would have paid less for her vacation if she’d owned a time share, she ran the numbers and proved the salesman wrong. She left the presentation despite his objections.

Another time, she accepted tickets to Universal Studios in Orlando in exchange for attending a time-share presentation. At one point during the event, she and her husband were left alone in a room to watch a video. “I mentioned to my husband that our time-share rep looked really tired and maybe sick,” she recalls. “A few minutes later, we were walking through the property and the salesman told us he had chronic fatigue syndrome, so that was why he looked so tired. I guess they monitor those spaces, eh?”

The time-share industry is trying to shed its reputation for high-pressure sales tactics. ARDA members are required to sign a code of ethics that says solicitations should “not convey a false sense of urgency through reference to or use of false conditions, restrictions or time limits.” It also stipulates that time-share companies provide “fair, meaningful and effective disclosure” of the terms of the purchase.

“Our members are committed to the highest standards and ethical behavior in vacation resort development,” says Howard Nusbaum, ARDA’s president.

Although the time-share industry’s self-reported customer satisfaction numbers are high — they held steady at 83 percent in 2012 and have fluctuated between 82 percent and 84 percent over the past decade — Nusbaum says that the industry is concerned about the negatives. To that end, it runs a Web site, VacationBetter.org, that’s designed to help consumers unfamiliar with time share and vacation ownership.

But to some experts, time-share sales will always be associated with fast-talking guys in cheap suits, ethics codes and rhetoric notwithstanding. The best defense: not being afraid to say no when you’re faced with an overly enthusiastic sales presentation, and a basic knowledge of the law.

“Time-share contract rescission periods vary from state to state and country to country,” says Schreier, the time-share adviser. “Once a consumer is past the legal rescission period, the odds are not in their favor of getting their money back.”

That’s what happened to Pavlovic when he tried to cancel. Under the Texas Timeshare Act, he had five days to get a refund on his time-share purchase, and he missed the chance.

Still, after I asked Wyndham to review his complaint, the company allowed him to cancel his contract — an unexpected but welcome resolution to this case.

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