Consumers: Beware The Time Share! Part One.

28 Aug Consumers: Beware The Time Share! Part One.

Recently I needed to rent a car, and while I usually do so on line, I needed to call the rental car company because a discount coupon I had wasn’t working with the on line reservation page.

After arranging for my car rental, I was asked to hold for a special offer. I was then offered three days/two nights at no cost if I would agree to see a presentation and take a tour of a vacation resort.

Now I knew what I was getting into: It was a timeshare offer. But the location they wanted to show me happened to be in one of my favorite vacation spots, so I figured, why not?

If you have never been solicited for a Time Share, generally you buy a week at the resort, (or points that can be used for a week or other vacation/travel products that the company has a financial interest in). You make monthly payments over a period of time.

For those payments you get a week at that particular resort, or you can trade to go to other resort facilities.

The sales pitch is that the cost of a vacation continues to go up yearly, but if you buy your vacation now, you are controlling the price of your accommodations. Some plans are for a fixed number of years, others boast that once you have paid for the time share it is yours forever and that your descendents will be able to use it.

So why should you beware the time share?

Because the seller is going to get you to sign a long term and potentially financially devastating contract without the benefit of really knowing what you are getting yourself into.

For example, with the plan I was presented, I was offered the opportunity to purchase points. Those points equaled the use for one week of a two bedroom unit at one of the company’s facilities during peak season.

The price? Approximately $30,000.00 in full by check or credit card, or I could arrange my own financing.

What? I don’t have $30,000.00 in my checking account, don’t have $30,000.00 available on my credit card and didn’t meet with a banker before getting on the airplane to line up credit? No problem!

If I pay them 10% by check or credit card they will “guarantee” my financing. I can either leave the financing with them or work it out with a bank when I get home. 10% down and ten years.

All at the low, low interest rate of 17.99%!!!!!!!!

So if you pay the $3,000.00 down with a credit card, you have financed the deposit at whatever interest rate your credit card has, plus you are paying the balance of the loan at credit card interest rates.

What does this mean from a cost standpoint?

$27,000.00 over ten years paid monthly at 17.99% interest is about $360.00 per month, or just over $43,000.00 for the life of the loan.

Let’s try to put this in perspective. Your are paying, assuming you don’t get a lower interest rate or purchase with cash, $4,320.00 per year for a one week vacation!

And somehow, I must admit to my dismay, they make this sound like a good deal.

If I haven’t scared you off yet, come back for Part Two.

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I've been a consumer bankruptcy lawyer for nearly 25 years. Since that time I have helped many people resolve their financial problems. I have been practicing law since 1986 and I am licensed to practice in all state and federal courts in the State of Louisiana. Because I am a sole practitioner, you know that your debt matters are being handled by me personally. In addition to my work with consumers, I am also frequently asked to speak at local seminars on bankruptcy law. I am member of the following organizations: • Louisiana Bar Association • National Association of Consumer Bankruptcy Attorneys • Bankruptcy Law Network My office is located at: 3920 General DeGaulle Drive, New Orleans, LA 70114 Telephone: (504) 368-4101

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