Lawsuits show rancor in timeshare sector

ORLANDO, Fla. – Sharon Morrison and her husband, Donald, say they are horrified by what they did on their last vacation to a Wyndham Resort in Orlando.

They paid $25,000 to buy a timeshare, after a four-hour sales pitch that wore down the couple's resistance and skepticism. Now they are being hounded by people promising to get them out of the contract — if they pay an upfront fee. They don't want to pay out any more money and aren't sure who to trust.

"We can't afford this," said Morrison, 69, who lives near Ottawa.

She says Wyndham offered to put them in a program that will eventually allow them to sell their timeshare, but they aren't sure how long it will take.

"Why won't someone help us, and put a stop to this?" she said.

Wyndham didn't respond to questions about the Morrisons' case.

The timeshare industry, like many others, has roared back from the 2007-09 recession. The American Resort Development Association, or ARDA, said 9.2 million households in the U.S., about 6.9 percent of all households, own some type of timeshare.

And Marriott Vacations Worldwide is battling a federal lawsuit in Orlando that alleges it falsely markets its points system as real estate ownership. Marriott is asking a judge to throw out that lawsuit.

The timeshare industry also is roiling with new allegations about cottage industries that claim to help people cancel their timeshares.

Wyndham said in a recent conference call about its first-quarter earnings that it increased its loan loss outlook because of "increased effort by third parties to encourage customers to default on their timeshare loans."

Orlando-based timeshare companies Westgate Resorts and Orange Lake Country Club filed nearly identical lawsuits in Orlando against Tennessee firms Castle Law and Castle Marketing.

Westgate and Orange Lake accuse the Castle companies of charging some customers an upfront litigation fee of $7,500. Orange Lake said Castle filed no lawsuits for any of its owners who paid the fee; Westgate said Castle hasn't filed lawsuits for some owners who paid the litigation fee.

Greg Crist, director of the National Timeshare Owners Association, said more lawsuits against cancellation companies may be in the works.

Former timeshare salespeople sometimes open new companies aimed at cancellation, he said.

"They've basically learned the inside track on what it takes to get the developer to cancel a timeshare, and also they know how the high-pressure sales tactics work," Crist said. "They attract timeshare owners in the same way — with a dinner, an evening out, and show them how maintenance fees escalate, and literally scare the hell out of these people."

The Morrisons said they thought they were going to a workshop about a new online reservation system for Wyndham Resorts. Instead, according to them, they wound up listening to aggressive sales pitches to buy a timeshare.