Better Business Bureau Timeshare Study: Will it make a difference?

Just recently the Better Business Bureau better known as the BBB, published a study titled “Unpacking timeshare and vacation club sales”, and their study finds “high-pressure sales, deceptive exit schemes and imposter scams throw shade on a popular industry.”

Well, tell us something we don’t already know and where did they get “popular” from, but the report is likely to be very welcome by timeshare consumers, who have been plagued by these very practices and scams for years. It verifies what many have been saying, some of those testimonies have appeared on these pages, so who is the BBB?

The Better Business Bureau is what is known in the US as a 501(c)(6) non-profit organisation. They were founded in 1912 with the self-described mission to “focus on advancing marketplace trust,” something that is seriously lacking in timeshare, and they consist of 97 independently incorporated local BBB organisations throughout the US and Canada.

Also, it is not affiliated with any governmental agency and any business that affiliates with the BBB must adhere to its standards. BBB also has a policy to refrain from recommending or endorsing any specific business, product or service, this is to avoid any bias or accusations of being biased.

The BBB does not rate the quality of a company. They only report on how efficiently a company responds to complaints. It only takes a second to dismiss a complaint by saying, “You signed a contract.” Case closed, A+ rating for being efficient. People should file complaints with the BBB. They do attempt to mediate disputes. You can also file a review, which is what it says, just a review.

So, in a nutshell, the BBB is trusted, let’s have a look at their report, it actually echoes the briefing paper for MPs, published by the House of Commons Library, in the article “House of Commons Library Research Briefing on Timeshare”. Both appear to come to the same conclusion, there is a problem.

PDF BBB Report Click to open

The BBB Study is broken down into the following headings:

  • Introduction
  • Timeshares
  • Timeshare exit companies
  • Vacation scams
  • Regulatory actions
  • Recommendations for regulatory changes
  • Tips for consumers

The Introduction is what you would expect, setting the scene with excerpts from what we assume are complaints received by BBB, although they do give some credit to those businesses in timeshare that do treat consumers ethically. But the introduction does end with this comment “Timeshares remain one of the most complained about vacation businesses.” Now isn’t that a fact?

The next section Timeshares tries to explain what timeshare is, not an easy task, it even confuses judges. (Surprising Links: Malaga Recruitment Fair & US Judge Trims Lawsuit)

It begins with “Realistic expectations for timeshares and vacation clubs,” explaining that it originated in Europe during the 1960s, apparently beginning with a ski resort and growing from there moving to the US in the 1970s. There is still much debate on where and how timeshare developed, but it is a far cry from what was originally envisaged.

Remember we mentioned that “timeshare remains popular”, well, look no further than the opening paragraph, this statement is based on a “survey” by non-other than ARDA. Rather contradicts the “most complained about business” in the introduction.

How timeshare works is the next sub-heading, this is very basic, which is not surprising considering the many variations that timeshare has morphed into over the years. Basically, it is broken down into Deeded and non-deeded, with a brief explanation of each.

Then it gives a BBB tip, research a resort and timeshares before attending any sales presentation, this is fine if you have made arrangements beforehand to attend, many are hauled in off the street or shopping malls by the touts or OPCs. They were the scourge of many Spanish holiday destinations.

Spain’s timeshare laws are mentioned as the “big blow” to the industry when consumer protection was enforced. They give a link to the first Supreme Court ruling on timeshare in 2015, where the “perpetuity” clause was proven to violate Spanish law. The law referred to is Ley 42/1998, which limited a contract to a minimum of 3 years and a maximum of 50 years.

As most European timeshares were sold in Spanish legal jurisdiction, this resulted in a flood of cases being filed with the courts. The result has been the death of sales in Spain and virtually around Europe. Three of the largest sales companies, Club la Costa, Anfi and Silverpoint have all folded, Diamond closed all sales decks well before the pandemic, with the vast majority of these being “franchises”.

So we have to question the statement in the same paragraph, “A quarter of all timeshares worldwide are owned by Europeans, showing the industry’s staying power amid stronger consumer protections.”

It is not until you check the link that you find out where this statement originated, It is from Timeshare Consumer Guide, Advice for timeshare owners and consumers in general, which is associated with Travel & Leisure Group.

This is a company which is a member of the RDO, Europe’s ARDA, they are one of the only “resale” companies which is a member, so they have a vested interest in promoting any “survey” or figures from a “trade body” with a very diminished membership. (see The Industry is Strangely Quiet When it Comes to the Truth)

Their next question is how much it costs, well, according to the figures supplied by ARDA, the average is around the $24,140 mark. We know full well this figure changes depending on what the sales agent thinks they can get, it also does not consider the continued pressure to “upgrade” for more of your cash.

They then give some more explanations on the types of usage such as fixed, floating weeks and points systems and explain what a “travel or vacation club” is.

The next couple of pages goes into the “misrepresentation” common in timeshare sales, including the “psychological” factors which also come into play during the presentation. Once again they give examples probably from their own complaints file.

They end this section with their recommendations for the timeshare industry, these recommendations should already be in place, such as violating ARDAs own code of ethics by members. This is a point which is not lost on owners on both sides of the Great Lake, both ARDA and the RDO will not intervene in any dispute, which leaves consumers with nowhere to go apart from the people that sold it to them.

In the next main section Timeshare exit companies, followed by Vacation scams, they highlight the “scams” which befall those owners who wish to sell or exit their timeshare. The reason I have placed these together is very simple, many of the “vacation scams” in the past have revolved around being rid of your timeshare, but to do this you have to sign up to their club.

Europe also went through a period where claims were the order of the day, this was a result of the massive losses by the timeshare industry in the Spanish courts following the 2015 Supreme Court ruling, (now 130 have been made). There was a flood of fake law firms and claims companies all vying for clients, using some very ingenious methods to “prove” their credibility. That market has basically ended, with the major companies involved now liquidated so there is no one to take to court.

Replacing this are still the fake law firms and claims companies, but now it is just an exit with a “no win no fee” claim thrown in, only if you sign up for the exit. The claim will not be through the courts but through in the case of the UK, the Credit Consumer Act.

In many cases these “companies” have been set up by ex-timeshare sales agents or staffed by them, this was noticed more when the sales decks closed. In one case a former Diamond (Europe) sales manager along with many of his “team” began a claim and exit company, targeting at first only Diamond members. We wonder where their data came from.

So it is little wonder that the “sales agents” for these companies will employ the same tactics they used to ensnare consumers in the first place. Yes, it is a dodgy business.

The last two sections are on regulation, with a few prosecutions thrown in, for those in the UK  you will be familiar with the example BBB has used, “20 arrests were made in Europe in an alleged scam that supposedly stole more than 25 million euro.”

AIT highlighted this case in “Monster Group: CPS Charge 18 After Fraud Investigation”. The case is still ongoing.

We finish off with recommendations for regulatory changes, many of which are what consumers have been calling out for, an end to lying by sales agents, clear and precise contracts and terms & conditions, with a truthful account of what you are purchasing. These are covered in “Tips for consumers”.

There is a lot more to this short study so it is well worth reading the full version, including the links, as we said at the start, this study is similar to the one we published from the House of Commons. Both highlight the very serious problems consumers face once they are entangled with timeshare.

Global News video link, posted on 30 April in conjunction with the publication of the study.

Better Business Bureau: Travel Scams

If you have any comments or views on this, please use the comments section at the end of the article, to start the ball rolling we ask, if the consumer should be responsible for understanding the product they purchase, according to the industry, then, should not the industry also take responsibility for not providing the correct information at the start?

We hope you all had a great weekend, Monday for much of the world was a public holiday, and our plans for a day out with Baby Dog were curtailed due to the rise in temperature, instead, he just flaked out on the sofa.

 

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