After Patricia and John Palombi paid $25,000 for an Orlando timeshare they immediately regretted, the Jacksonville, Fla., couple desperately searched for a way out. A company that said it specialized in timeshare exits promised it could help -- but it would be another $11,000.
The Palombis agreed, beginning a year-and-a-half long battle with the company, Vacation Consulting Services of Missouri, that they claim ran off with the money and left them in limbo.
It's the kind of situation that has been at the heart of an increasing number of lawsuits filed by timeshare giants over the past several years, including Orlando-based Wyndham Destinations and Diamond Resorts of Las Vegas, that are directly going after the timeshare-exit industry.
Timeshare-exit companies, they claim, promise to help get owners out of their timeshares for large upfront fees of several thousand dollars. The companies work with lawyers who send the timeshare companies a form letter on the consumers' behalf, the lawsuits claim, and instruct people to stop paying their annual maintenance fees or the mortgage on the timeshare.
Oftentimes, that can lead consumers to unknowingly default on their timeshare payments or pay exorbitant amounts for a service that, in many cases, they could have received for free if they just called the timeshare company directly.
"It was a mistake to ever engage in this," Patricia Palombi told the Orlando Sentinel. "We should have researched other companies. We didn't do it. We trusted these folks, and I would like nothing better than to see them out of business."
The Palombis were lured to a timeshare-exit company presentation in November 2016 through a mailed invitation, three months after returning from a vacation in Hawaii where they had purchased a timeshare with Hilton Grand Vacations Club at the Parc Soleil resort in Orlando near SeaWorld.
"They made a good argument for getting out of it because of the fact that you are going to pay these maintenance fees for the rest of your life," John Palombi said. "And even if you die, your grandchildren will have to be spending money on this."
The retired couple were promised a solution in three to six months, so they paid. But it would be almost impossible to get back in touch with the company as the process extended for more than a year. At times, the Palombis said they placed as many as 50 to 80 phone calls to the company with no response.
It wasn't until May 2018 that the Palombis said they got word that their timeshare, which was fully paid for, was no longer in their name. The final cost for the ordeal, including the cost of the timeshare and the annual maintenance fees they had to continue paying while the process went on, was about $40,000.
"I just had no clue that there were that many people out there trying to steal money by lying," John Palombi said.
The shame of it has been such that, as of when the Palombis spoke to the Sentinel, they hadn't told their children what happened to them.
But the Palombis' situation is by no means unusual.
The Florida office of the attorney general has received about 500 consumer complaints every year for the past few years related to timeshare relief-type companies, said spokesman Whitney Ray in an email. In 2018, that number was down slightly to about 450 complaints, potentially because of a push by timeshare companies to go after timeshare-exit companies.
"The industry has come together to find a solution for consumers," said Robert Clements, vice president of regulatory affairs at the American Resort Development Association, the trade group that represents the timeshare industry.
The couple have decided not to sue the company, but Wyndham did sue Vacation Consulting Services in September with similar allegations. Vacation Consulting Services did not respond to a request for comment.
This year alone, Wyndham has filed six lawsuits in Florida against exit companies.
Bud Bennington, an attorney with Shutts and Bowen who has represented Wyndham and Diamond in many of the cases, said he's currently involved in about a dozen active lawsuits against timeshare exit companies. Diamond alone has prosecuted 12 lawsuits around the country, six of which have led to injunctions against the companies, the resort association said.
Red flags, the timeshare industry said, are if an exit company requests a large up-front fee, guarantees success or solicits potential clients.
The challenge when it comes to filing lawsuits, said Wyndham CEO Michael Brown, is that exit company owners may open numerous companies with the same address and phone number, making untangling the web difficult.
"When one closes down, another opens up," he said.
But the billion-dollar timeshare industry is not blameless in the whole ordeal, said Brian Rogers, owner of the Timeshare Users Group, a network of about 100,000 timeshare owners across the nation.
"They are both in the same cesspool, as far as we are concerned," Rogers said. "The industry itself created these scammers. They wouldn't exist if the industry itself didn't practice the way that it does."
Business on 12/28/2018