Timeshare companies declare war on cancellation firms
Raleigh-Durham area resident Alicia Alston has a tale of woe about a recent timeshare contract she and her family members signed May 20 — and want out of. They chased an offer of free tickets to an aquarium when vacationing in Myrtle Beach recently. They wound up at a sales center for Wyndham Vacation Ownership timeshare properties. Alston, 32, is desperate to cancel. But she’s also worried about people offering to help her cancel it — some of whom want additional money up front. And she is not alone.
Several timeshare companies have declared war on attorneys and businesses that advertise timeshare cancellation services.
Over the past month, four timeshare companies have filed multiple lawsuits against several timeshare cancellation firms, including three suits against the Tennessee firm of Tea Party Nation founder Judson Phillips, the Castle Law Group.
Backlash against cancellation firms also reflects ill will toward aggressive sales tactics, which means remorse after some timeshare contracts are signed, timeshare industry observers said.
“We kept explaining to them, mom’s on disability, I only make $13 an hour. But they kept saying we could do this, and offering lower payments,” Alston said. She has called Wyndham repeatedly, but they have refused to cancel the contract. Alston admits that she only requested the cancellation after the contract’s rescission period expired.
An online forum for timeshare owners, the Timeshare Users Group, has seen messages about timeshare cancellation, said Brian Rogers, administrator of the site. He warns people to stay away from cancellation services.
“This industry is masterful at coming up with ways to part owners from money by misleading or outright lying to them,” Rogers said.
Las Vegas-based Diamond Resorts International has sued Longwood attorney Austin Aaronson, accusing him in court documents of racketeering, which he denies. Orlando-based Westgate Resorts has sued Castle Law and a California lawyer, Mitchell Reed Sussman, seeking an injunction barring Sussman from “interfering” with Westgate’s business relationships with timeshare owners.
Even Welk Resorts, named after entertainer Lawrence Welk, filed a lawsuit recently against Seattle-area company Reed Hein & Associates, also known as the Timeshare Exit Team. Reed Hein says it is not a law firm; its website is endorsed by the Steve Harvey Morning Show and by the Dave Ramsey Show. The Welk lawsuit accuses Reed Hein of charging clients $5,000 up front to cancel a timeshare contract.
“The timeshare-relief companies and lawyers are a pervasive problem affecting the entire timeshare industry, not just Westgate,” said Kate Saft, an Orlando attorney who represents Westgate. “There have been several lawsuits filed in the past few weeks by a multitude of timeshare developers.”
The lawsuits allege illegal tactics by the attorneys and related marketing firms, who are accused of charging big fees to offer “guarantees” they will get you out of your timeshare. The cancellation companies are also called “third-party exit” firms or TPE’s.
The timeshare companies say a growing number of cancellation attorneys aren’t doing anything for their clients — except maybe writing a letter to the timeshare firm, and then urging owners to stop making payments on their timeshare, which can put them in credit default.
“I think the timeshare companies believe there’s strength in numbers, and they’re all kind of attacking all at once,” said Laura Blevins, who used to work for the Castle firm.
Aaronson said in an email that he views Diamond’s lawsuit as retribution because he’s challenged their sales tactics and contracts. “These are scorched-earth tactics ... in a brazen attempt to embarrass, humiliate, and ruin the opposition financially,” he said.
Diamond Resorts is asking a federal judge in Tennessee to appoint a receiver to take control of Castle Law and several related companies.
“The lawsuit is part of an ongoing effort by Diamond to arrest the behavior of timeshare TPE’s that plague the industry by preying on unsuspecting timeshare owners,” Diamond said in a statement. “The TPEs target and manipulate timeshare owners by soliciting services in exchange for excessive fees.”
Rogers said there’s a major issue that most TPE’s never address, and that is the money that is often borrowed for a down payment on a timeshare.
“Generally these loans/mortgages are granted by third-party lenders, and have little to do with the timeshare ownership itself,” Rogers said. “They don’t care if you send them a notice saying you want to cancel your timeshare. They are generally covered in the contract language.”
In an interview, Alston claims she never agreed to a charge of $4,000 that appeared on a PayPal account for their timeshare contract.
“We gave them our information only to check our credit, not to charge us $4,000,” she said. Wyndham didn’t immediately comment when asked about Alston’s case.
A few other Orlando-based companies haven’t weighed in with their own lawsuits yet, such as Wyndham Vacation Ownership and Marriott Vacations Worldwide.
Federal court records show that Wyndham recently reached a proposed settlement with a client represented by Castle Law over a timeshare cancellation lawsuit in Nashville.