Consumer Action’s legal advice line regularly hears from consumers who have signed up for timeshare schemes – schemes which allow points or credits to be redeemed for holiday accommodation.
We’ve heard from consumers concerned about:
- the resale value is much less than the purchase price;
- high pressure selling techniques have been used;
- accommodation is difficult to book at suitable times;
- ongoing fees are charged, whether the holiday credits are used or not.
Timeshare is a complex concept. It is not unusual for consumers to be confused about what they are purchasing. Any confusion experienced by a consumer can be made worst by the seller’s conduct at the point of sale.
How are timeshares sold?
Timeshare companies sometimes use high-pressure selling techniques to get you to enter their scheme. A Timeshare company may first approach you through telephone contact, a raffle or competition, or by approaching you personally at a holiday resort. The representative for the timeshare company will then usually invite you to a seminar held by them with a reward offered for your attendance.
At the seminar, timeshare sellers may use high-pressure selling techniques to get you to sign up. For instance, they may tell you that the only opportunity you have to purchase a particular timeshare deal is at the seminar itself.
Some consumers have said that they were made to feel ‘stupid’, guilty and uncomfortable if they did not want to enter into the scheme. The pressure of having to make the decision at the seminar, the number of sales staff – often one allocated per family – can be confronting for many consumers.
There have also been cases of sellers misleading consumers about the nature of timeshares or the operation and consequences of the contract.
Paying for Timeshares
As well as paying what is often a substantial sum (between $12,000 and $25,000) for the Timeshares themselves, you will usually be liable for other fees and charges associated with managing the scheme and maintaining the upkeep of the holiday accommodation, whether or not you use the timeshare.
Timeshare resale is costly, time consuming and no sure thing
Timeshare can be sold on the secondary market, both privately and through brokers, but don’t be fooled into thinking timeshare is a financial investment!
Selling timeshare can be costly, time consuming, and is not always possible. In all likelihood you’re only ever going to recover a fraction of your investment.
Internet forums are full of timeshare owners unable to sell their shares, and those who’ve sold them at a fraction of their initial ‘value’. The secondary market for timeshare is flooded, and without the well rehearsed, high pressure selling tactics of timeshare companies, making a deal can be hard or even impossible.
Timeshares are not credit products. However, it is common for a related credit contract to be entered into in order to pay for the timeshare.
If you have entered into a credit contract in order to pay for the timeshare, you are probably being charged interest under the credit contract as well as fees and charges relating to obtaining the credit.
Contact Consumer Action on (03) 9629 6300 or 1800 466 477 for advice on whether or not you can get out of the credit contract.