Timeshare Exit Companies have become wildly popular with unhappy timeshare owners. They might promise to force a resort to take back an unwanted timeshare or forgive a large mortgage.

But do timeshare exit companies deliver on their promises, or is this trend just another scam that timeshare owners need to be wary of? Recent articles and lawsuits suggest that timeshare owners should be cautious when they talk to timeshare exit companies.

Keep reading to determine if a timeshare exit company is worth the risk.

Resorts Pursue Legal Action Against Timeshare Exit Companies and Cancellation Attorneys

Every once in a while, you’ll hear about a lawyer who gave someone bad advice. But now there’s an entire category of timeshare exit lawyers who are allegedly getting themselves into legal hot water and their clients into financial trouble. They call themselves: “Timeshare Cancellation Attorneys.” These attorneys work in the background for companies that are generally known as timeshare exit companies. They promise to get their clients out of their timeshare contracts with no consequences to their contractual obligations or their credit ratings.

Cancellation Attorneys Sued

It’s the latest fad in the timeshare resale market, which is plagued by scammers and swindlers. However, these exit companies that tout contract cancellation as legitimate don’t have the law on their side, according to a growing number of legal authorities. Attorneys for Welk, Westgate and Diamond Resorts have all filed suit against these timeshare cancellation attorneys and the timeshare exit companies who work with them.

They “plague the industry by preying on unsuspecting timeshare owners,” according to the suit filed by Diamond Resorts International against Nashville-based Castle Law Group, its principal Judson Phillips and affiliated individuals and entities.

Timeshare Exit Companies Aren’t Cheap

For instance, Reid Hein & Associates, operating as “Timeshare Exit Team,” charged fees of $5,000 and more for their “services”, according to the suit filed by Welk Resorts. The suit also alleges that owners who became delinquent and went into default under the Timeshare Exit Team scheme suffered significant damage to their credit records.

A timeshare owner would hope that after paying $5,000 or more, they would be hard at work getting their clients released from their ownership. However, the amount of effort that goes into it may be minimal. According to the Welk suit, Timeshare Exit Team and its cadre of attorneys would conspire to send bare-bones, generic, one-page attorney demand letters to Welk, claiming they represented the owners in breaching the contract.

Money Back Promises Unkept

To give prospective clients some peace of mind, most timeshare exit companies offer some type of money-back guarantee. However, it seems the guarantee may not be enough protection. American Resource Management Group, which did business as Resort Release, filed for Bankruptcy after being sued by both Wyndham and Bluegreen. A Trustee was appointed to take control of the organization and noted, “…Debtors, despite being paid substantial upfront fees from timeshare owners, have minimal cash in their bank accounts and have insufficient reserves to cover potential 100% ‘guarantee’ claims they made to thousands of timeshare owners.”

So, always vet the organization you are doing business with to ensure they can live up to their promises. Use our Timeshare Scam Hotline to prevent timeshare scams.

While timesharing is at an all-time high and continues to gain in popularity, the resale market does struggle. Owners who need to divest and still have a mortgage should seek the help of their resort; they might get a hardship deferment, or perhaps the resort will take back the ownership. Check out our guide on how to get out of a timeshare here.

Outsource Your Divestment Process to Timeshare Specialists

Despite what you might hear from timeshare exit company’s spokespeople, if a timeshare is free of a mortgage, some units can be sold (for a fraction of the original purchase price), and with a significant amount of work, most ownerships can be given away.

If you want to outsource this process, Timeshare Specialists can handle it for you, we guarantee that we’ll find a new owner and don’t charge our fee until we’ve completed all the work. More on our timeshare divestment services here.

So, unhappy timeshare owners should keep in mind that there are alternatives to the timeshare exit firms and cancellation attorneys and evaluate them all before paying significant upfront fees for a questionable service.