Many travellers looking to book a holiday these days choose to use a timeshare exchange service. While this can be convenient, it’s important to remember that there are many risks involved in buying or exchanging into a timeshare plan. Before you hand over any money or sign up for a new timeshare deal, make sure you know what you’re letting yourself in for:
TIMESHARES ARE LEGALLY BINDING CONTRACTS.
Most travellers take out their initial timeshare under the impression that they will ‘trade’ it back within one year of purchase and get all the money back that they paid – often paying just small monthly fees instead of large upfront costs. In fact these deals are legally binding contracts which should be treated as such by the travel agents who sell them.
This means that you will usually be liable to pay annual maintenance fees for the rest of your life (or until you pay off your balance), even if you don’t use it anymore. If you want to keep it after this initial contract period, make sure that any new agreement is non-binding and written in plain language so you understand what rights and obligations are involved.
YOU CAN’T CANCEL TIMESHARE BOOKINGS EASILY
Even if you’re not using your timeshare these days, there may come a time where you need to take some kind of holiday – whether because of illness or bereavement or simply because you deserve a break! However, cancelling a confirmed booking with one of the major operators like RCI or Hilton can be almost impossible, and you will lose most if not all of your timeshare points as a result. That’s money down the drain! In fact, with most providers cancelling is not even an option once you’ve made a reservation with them, so it is worth avoiding booking too far in advance if at all possible.
TIMESHARE BOOKINGS ARE NOT PROTECTED BY ATOL
Unlike a normal holiday booked through a UK-based travel agent using their ATOL protection, timeshares booked directly with exchange companies who have affiliations abroad aren’t covered under this scheme. This means that if those companies go bust before they have been able to fulfil their promises – which does happen occasionally as there is no requirement for them to hold any funds to cover your holiday – you could lose your money.
TIMESHARES ARE NOT REFUNDABLE UNDER THE CONSUMER CREDIT ACT
The fact that timeshare bookings are legally binding contracts also means that they’re not covered by the provisions of the Consumer Credit Act which protect the credit card holder when using their plastic for pre-payment for things like hotel rooms and cars. This means that if there is a problem, such as bad weather or illness (and even if it’s caused by events outside those that were anticipated at the time of purchase) you won’t be able to claim against your credit card company as long as ‘all monies’ have been paid up front.
TIMESHARE MEMBERSHIP AND RESALE VALUE IS UNPREDICTABLE
This is another good reason not to buy points in a timeshare exchange without first doing the research. Sites like Timeshare Compensation can help to give you an idea of what your points might be worth, but since different resorts have differing levels of demand and different requirements for their memberships there are no guarantees. You may well find that your membership is virtually worthless – or that it represents the best value you’ve ever had! As always, it’s important to do plenty of research before signing up for anything!
THERE ARE TONS OF HIDDEN COSTS ASSOCIATED WITH TIMESHARES
Be aware that exchanges into any particular resort could require additional fees above standard maintenance fees – such as security deposits (which never seem to go back in full after you leave), and annual ‘renewals’ which can seriously increase your costs. These should be stated prominently when you purchase, but many timeshare companies fail to reveal these details until the ‘membership agreement’ is signed.