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Why do timeshare relinquishment firms charge fees in advance?

Why do relinquishment firms charge fees upfront instead of on a no win/no fee basis?

A much needed solution

Currently 22 million people worldwide vacation through timeshare memberships. Often they bought after a grueling, high-pressure sales presentation, and many of those people later regret their purchase.

From the 1960s onwards, timeshare companies offered an alternative option to being disappointed by regular vacation accommodation. By signing up with them, you guaranteed your family a higher standard of vacation.

It cost more than regular vacations, but people expected that. Good things are more expensive.

Then, with the advent of the internet, regular vacations overtook timeshare memberships in terms of convenience, easy access to information regarding resort quality and cost.

In modern times, the main reason people buy timeshare memberships is because of the sophistication of their sales process.

For many reasons, a lot of timeshare owners would like to cancel their memberships.

This is not an easy thing to do. Timeshare companies enforce payment of the annual management fees, whether their clients use the product or not, whether they want the product or not, whether they can afford the product or not.

Desperate timeshare owners needed a way out.

Relinquishment companies like Timeshare Advice Center (TAC) incorporated to answer that need.

Rogue operators

Sadly, as with any new developments around the business of timeshare, this genuine need for help attracted thieves and scam artists. Criminal gangs bought stolen timeshare data and created fake firms with the sole aim of defrauding people who had already lost money to timeshare sales operations.

These criminals caused difficulties for consumers and genuine relinquishment firms alike. Suddenly, instead of people needing help being able to trust those offering it, a necessary atmosphere of caution and skepticism arose.

People still need the service, but how can they trust the firms offering it to them?

Sensible precautions

Online reviews give an excellent indication of the subjective experience of their customers. Naturally the majority of their reviews should be four or five stars, but take the time to look at their bad reviews too.

Every company gets things wrong sometimes, so it is important to see how they react when they receive negative feedback. Are they defensive and dismissive? Or do they take the complaint seriously and do their utmost to fix the issue to the client’s satisfaction.

Look for customer reviews on a company's website too. Preferably video reviews so that you can see they are real people talking about real experiences.

Check a company’s history: If they have been trading for many years, they are less likely to be incompetent or fraudulent.

A common question

Cautious timeshare victims often baulk at the idea of paying money upfront. An understandable reaction given the amount of con artists fishing for their hard earned cash.

"Why can't you do it on a no-win-no-fee basis?" is a question we get asked by canny prospective clients all the time.

The answer

Unfortunately no relinquishment companies are likely to operate on a contingency basis. Scam operations and genuine firms alike all charge their fees upfront, but for very different reasons.

• Fraudsters charge fees upfront because they know that it is the only way to steal your money. As soon as they have it they will disappear and you will never hear from them again.
• Genuine firms charge fees in advance because of the actual outlay they have to make on your behalf, in terms of wages, legal work, business overheads, permissions and other expenses.
• Another big giveaway for scammers is that they will often ask for the money to be sent to a bank account in an individual’s name whereas a genuine company will take the payment into a business account or a lawyers client account.

The good news is that there are subtle differences in the way scam outfits and genuine claims companies do business regarding these upfront fees:

• Honest companies will often allow limited payment terms. Thieves obviously want everything immediately because they know a conned client will not honor a payment schedule later.
• A scam firm will only accept payment by bank transfer because this means the victim forgoes the protection of The Fair Credit Billing Act, which they would have had if they used a credit card for the transaction. (Note, genuine firms would often prefer a transfer too because of the extra costs incurred with credit card payments, but they will still accept card payments if required)

“Unfortunately, this industry does rely on fees being paid in advance,” says TAC spokesperson Suzanne Stojanovic. “The trick is to make sure you are paying that money for a genuine service.”

For advice on timeshare claims and relinquishments, contact our team for a confidential, no obligation chat.