It turns out Dave Ramsey is currently endorsing a business that is the center of a recent lawsuit by Washington state Attorney General Bob Ferguson. The company in question is called Timeshare Exit Team. They promote their ability to get consumers out of their timeshare, and is listed as one of several companies under the heading “Dave Recommends” on his website.
Timeshare Exit Team provides a way out. They’ve been doing this for over 7 years, have successfully exited THOUSANDS of MY listeners, and are the ONLY exit company I trust.
-Dave Ramsey’s Website
Dave Ramsey, a popular radio host who preaches the gospel of debt-free living, is adored by many financial advisers who do business with his organization by paying for potential client leads. Those advisers call and email potential clients, with pitches that may begin with the phrase, “Dave Ramsey let me know that you’re looking to speak with a financial adviser”. These companies rely heavily on Dave Ramsey’s endorsement of their services, but is it time for Dave to check out this particular endorsement?
What Is A Timeshare Exit Company? Are They Legitimate?
A timeshare exit company is purported to help owners get out of contracts that no longer have value on the resale market. Although, some timeshare exit companies do offer a legitimate solution to getting out of your timeshare. Many will offer owners legal advice on how to get out of their contracts, some of these companies will even “guarantee” refunds to owners. However, in many cases, these claims have been found to be false promises. There have been cases where an exit company will collect a fee upfront for their services, then change their name and contact information while leaving the timeshare owner left with nothing to show for the fee they have paid. You can read about a high-profile case where an owner of a Hilton Parc Soleil timeshare received no help from the very company that Dave Ramsey promotes, Timeshare Exit Team, and ultimately lost $5,000 in fees.
At least honor your money back guarantee…
-Richard Sweeting: Victim of Timeshare Exit Team
There are a few actions that are being taken to help close these illegitimate timeshare exit companies. First, timeshare developers in the United States are participating in the “responsible exit” program that is done through the American Resort Development Association, also known as the ARDA. Second, many of these developers are also filing lawsuits against the exit companies as well as encouraging prosecutors to pursue cases against these companies that are not only taking advantage of timeshare owners, but also interfere with legitimate contracts.
How To Identify A Timeshare Scam
Up-Front Fees
The easiest way to spot a timeshare scam is by the upfront fee. Most timeshare scammers will promise owners the ability to get them out of their timeshare, while requiring high up front listing fees to list their timeshare for sale or get them out of their contract. In many states, there are laws that restrict the collection of upfront fees, reputable timeshare companies will never ask for money upfront. If you’re looking to list your timeshare for sale, A Timeshare Broker, Inc. never charges any upfront fees, so we only get paid a commission if we are successful in selling your timeshare, and there’s no obligation to accept the offers that are presented. We only get paid when we can present an offer that you are satisfied with, and this is the industry standard for reputable timeshare resale brokers.
Big Promises: Too Good To Be True
The reality with timeshare resale is that you will not make a profit when you sell your timeshare, the costs incurred by the developer to procure sales at a presentation is added to the purchase price paid by buying directly from the developer, and can not be recouped when reselling the contract on the resale market. If a company seeks you out and offers you a deal that sounds too good to be true, such as claiming to have buyers that are willing to pay over fair market resale value for your timeshare, you are being targeted by a timeshare scam.
Know Who You’re Dealing With
Legitimate timeshare resale companies do exist. Be sure to do research on the timeshare company that you are looking at working with, ask them questions, and most importantly verify all information that you receive. We’ll cover some key aspects to look into for any timeshare resale company below.
Licensing Requirements
Timeshare resale brokers that list and sell timeshares on the resale market must be licensed Real Estate brokers. Be sure to check if the agent you are working with has a valid license, and if they have ever received disciplinary actions. All of this licensing information can be found with your state’s Department (or Bureau) of Real Estate.
Check The Better Business Bureau
The Better Business Bureau website is a great source of information when it comes to finding a reputable timeshare resale company, but it should not be substituted for other methods of verifying the legitimacy of the broker you’re working with. The BBB can show any complaints that have been filed against a company, and if there are complaints present on their BBB listing, it is a good indication that a timeshare resale company is not a good choice to work with.
Google Is Your Friend
A quick Google search can save you a lot of trouble. If a company has scammed timeshare owners in the past, chances are those owners have posted warnings online. Online forums can also be a great resource to verify other client’s past experiences with the company you are working with.
Learn About Common Scams
Check out the Federal Trade Commission website, as well as search for commonly used scams on Google. Timeshare scams are constantly evolving and finding new tricks, so staying up to date on current scamming methods will help save you the pain of falling victim to a scam.
Legitimate Timeshare Exit Options
List Your Timeshare For Sale
Probably one of the best and most legitimate ways to get out of your timeshare contract would be to list your timeshare for sale with no upfront fees. Owners at brand-name timeshare chains — Hilton, Disney, Marriott, WorldMark, Hyatt, Westin, etc. — should research resale values to help determine the current market conditions.
When looking for a timeshare resale company to list your timeshare, be sure to find one that does not require upfront fees. A reputable timeshare company will also have a licensed broker and utilize a third-party closing company. The use of a third-party closing company makes sure that the contract you sign is upheld, and thus, owners and buyers are protected throughout the transaction.
Rent Your Timeshare
If you wish to hold onto your timeshare for later use, but want to recuperate some of the money from having to pay annual maintenance costs, a great option for owners would be to rent their timeshare. Just like selling a timeshare, renting should require no upfront fees. Many timeshare resale brokers will also offer rental services, or at least refer you to a reputable company that offers rental services.
A Timeshare Broker, Inc. offers timeshare rental services, you can learn more by filling out a form to list your rental or browsing our rental listings.
Give Your Timeshare Away (But Not To A Charity)
Choosing to donate your timeshare seems like the perfect solution to some. However, this is one to be weary of. Donating your timeshare is a common scam that companies will employ. These companies may promise to donate your timeshare for you, with thousands of dollars in fees upfront, so owners will need to be careful.
One solution for giving your timeshare away would be to list it under the Free Timeshares section of a reputable resale broker’s website, or find a private party who would be willing to take the timeshare from you.
What About Just Stopping The Payments?
As nice as it sounds, simply stopping payments on your timeshare is generally not a viable option. Eventually, dues that have gone unpaid will end up at collection agencies. From here developers may choose to foreclose on the property or possibly take you to court to recover past due fees. Your credit will be negatively affected, and you may have to deal with lawyers and collection agencies until it is settled.
What Should You Do?
Unfortunately, Dave Ramsey has backed a timeshare exit company that has a history of charging high upfront fees to timeshare owners without producing results, and now many owners are speaking out.
Selling your timeshare through a legitimate timeshare company is the best option for those looking at getting out of their timeshare ownership, but with many ownerships having very little value on the resale market, it’s critical to understand the resale value of your ownership prior to listing your contract for sale.
If you would prefer to keep your timeshare, and are just not able to use it at this time, renting it out would be the next best thing. Whatever option you choose, be sure to be vigilant in doing research on the companies that you work with. History has shown, even high profile endorsements don’t substitute for timeshare owners doing their due diligence to properly vet the company they are working with.
