You’ve probably heard about the couple jailed in Mexico after filing numerous credit card chargebacks over timeshare fees. They reversed nearly $120,000 in charges from their timeshare company and advised others how to do it too.
Publicly.
The couple gave their awful exit advice on a Facebook group for disgruntled timeshare owners. However, they weren’t the only ones lurking in that community.
Resort representatives and legal authorities were also reading the wife’s instructions on how to essentially steal from a timeshare company. So when the couple returned to Mexico for vacation, they were promptly nabbed and arrested by Interpol.
They spent an extremely unpleasant month in a Mexican jail before being returned to the United States. NBC News reported that they were released only after agreeing to repay the money owed to the timeshare resort.
The couple and that Facebook page instantly evaporated from the public’s radar. But although that particular group is gone, timeshare complaints flood the internet in many forums.
As a consumer advocate, I’ve fielded pleas for help from desperate timeshare and vacation club owners for the past decade. None of their stories has ever been as dramatic as the couple jailed in Mexico. But they all involved consumers wanting out of the long-term commitment and financial burden of their timeshare.
Until now.
A timeshare complaint of a different kind
As the relentless media coverage of the couple jailed in Mexico surged, some highly unusual timeshare complaints began coming my way. These satisfied owners said their timeshare company was forcing them to accept a buyback offer to end their contracts early.
Against their will.
Terry McMahon is one of those ejected former timeshare owners. Even worse, after he reluctantly agreed, the timeshare company never processed the $2,500 buyback payment.
Months later, Resort Global Network, their timeshare company, continued to tell the McMahons that the wire transfer was “in process.”
With his much-loved timeshare gone and the buyback payment MIA, McMahon reached the end of his patience. He questioned why a wire transfer would take four months to process and he hoped we could find out.
That’s exactly what Consumer Rescue aimed to do.
Purchasing a timeshare for zero dollars
Eight years ago, McMahon and his wife were scrolling through the timeshare resale listings on eBay. Suddenly, they saw one that caught their eyes, located in Cabo San Lucas, Mexico.
“It was a one-bedroom unit at Club Casa Dorada Spa and Golf Resort,” McMahon told me. “It’s located on the property of the Hilton Los Cabos.”
The unit looked like just the type of tropical timeshare that the couple hoped to buy into – and the price was perfect: $0.
You read that right. The owners of the timeshare were so desperate to unload it that they were willing to give it away. To take ownership, the McMahons would just need to pay the closing costs and take over the annual maintenance fees.
“We paid about $300 in transfer fees to buy out the former owner of the timeshare unit,” McMahon recalled. “We were thrilled and took our first vacation there soon after.”
From then on, the McMahons paid $900 in annual maintenance fees with a contract that would last until 2030. In exchange they spent one enjoyable week each year at their timeshare in Casa Dorada – soaking up the sun and breathing in the ocean breezes.
The couple always looked forward to their next vacation to Cabo.
But all that changed last winter.
Resort Global Network: We no longer have inventory at Casa Dorada
In December, the McMahons received a surprising letter from Resort Global Network about their timeshare unit.
“We no longer have inventory at the property [Casa Dorada],” read the confusing message from RGN.
For background, Club Casa Dorada was a resort within a resort. It occupied space on the Hilton Los Cabos property there in Cabo San Lucas.
What was so nice about it was that guests at Casa Dorada got access to the amenities at both resorts. But over the years, we noticed that the Hilton was taking over more and more of Casa Dorada. I’m sure this (buyout)is all about money. I pay just $900 per year and get a week there. But the Hilton can charge thousands of dollars per week for my one-bedroom unit. So we had to give up our timeshare. That’s my sad story.
McMahon is certainly on to something there. Hilton operates its own timeshare/vacation club (Hilton Grand Vacations Club), which is logically the reason for the mass buyout and ejection of the Casa Dorada owners.
Related: Is this the worst travel agent in the world?
In fact, by the time I started investigating McMahon’s complaint, Hilton had already rebranded Casa Dorada as the Hilton Grand Vacations Club La Pacifica.
However, all was not lost for the Casa Dorada timeshare owners who wished to stay in Cabo San Lucas. They had options.
Transfer your timeshare contract to Hyatt Dreams
McMahon says he was offered two choices – neither of which involved completing his timeshare contract at the Hilton they loved.
“They said we could transfer our timeshare contract to Hyatt Dreams in Cabo,” McMahon explained. “Or accept a $2,500 buyback for our one-bedroom timeshare – with six years left on the contract.”
Hyatt Dreams Los Cabos is a short walk or drive down the beach from the Hilton Los Cabos. Both properties are full-service, 4 to 5-star resorts, depending on which review sites you ask. (For reference, according to The Points Guy, Dreams is one of the 11 best all-inclusive resorts in Los Cabos.)
However, for the McMahons and many other timeshare contract holders of Casa Dorada units, this offer was entirely unwelcome and not a comparable swap.
McMahon says they chose the buyback instead, accepting RGN’s $2,500 offer. Not surprisingly, the couple headed back to eBay’s timeshare resale shop to consider new vacation options.
But then the McMahons faced a new challenge: the $2,500 wire transfer from RGN never arrived.
Asking Consumer Rescue for help
When McMahon’s request for help hit my desk, he had been trying to track down his wire transfer for four months. He was working directly with a “Buy Back Specialist” at Resort Global Network who had many explanations for the delay.
In one of the many correspondences with McMahon, the specialist bizarrely explains how a wire transfer, a transaction that should be nearly instantaneous, could take up to two and a half “natural months.”
Dear Mr McMahon,
This email is just confirming that your wire transfer is in process. Remember from the day that we receive the documents this might take from 30 – 45 business days or more if there are delays, which can be at most two and a half natural months, as there are only 20 business days per month. We have escalated the situation with the Club, and they let us know that you should receive the money at least by the 14th of February. In the case that you do not receive this by then, please get back in touch with me to assess the situation.
Sincerely, *** *** (Resort Global Network Buy Back Program)
Although McMahon knew that a wire transfer should not take that amount of time, he waited patiently. But then February and March went by with still no sign of his $2,500 buyback payment.
That’s when McMahon knew he needed additional help to shake his money out of whatever black hole it was stuck in.
His next move was to send his plea for assistance to our consumer advocacy team. (FYI, If you have a problem with a company, you can do the same, using the button below.)
Asking Resort Global Network about the missing wire transfer
McMahon’s paper trail showed that the “Buy Back Specialist” had repeatedly promised that the $2,500 was on the way.
The timeshare buyback was straightforward. McMahon signed the contract in mid-December, and at the time McMahon reached me, it was mid-April.
By that time, McMahon’s sold unit was already part of Hilton Grand Vacations La Pacifica’s inventory, presumably drawing a significantly increased profit margin for that company. There was absolutely no logical explanation for the delay in McMahon’s payment.
It was time to ask Resort Global Network where McMahon’s $2,500 had gone.
…You have assured him multiple times since the beginning of the year that a wire transfer in the amount of $2,500 is in process from your business to him. As I’m sure you’re aware, wire transfers are nearly instantaneous, so it is curious as to why, five months later, he hasn’t received his cash.
Can you please check with your accounting department and process his promised wire transfer? This seems like an easy case to resolve positively. Thank you!
(Michelle Couch-Friedman, Consumer advocate)
Related: Timeshares and travel clubs: Consumer Rescue’s ultimate guide
The good news: Here’s that $2,500 buyback payment
Success! Soon the McMahons’ $2,500 was joggled out of Mexico and into their bank account where it belonged.
Wow, you lit the fire- 2,500 thank yous!
Thanks to Michelle and the team. Terry McMahon
A different specialist at RGN offered an apology for the lengthy delay.
Dear Mr. McMahon,
We are writing to inform you that the payment has now been processed.
Please accept our sincerest apologies for the delay in this payment. We understand that this has been a source of frustration, and we deeply regret any inconvenience it may have caused.
We value your patience and understanding. If you have any questions or require further information, please do not hesitate to contact us.
Sincerely, *** *** (Resort Global Network).
McMahon and his wife were elated to finally close this chapter in their timeshare adventures. But when Terry shared his success to the Facebook group filled with other disgruntled Casa Dorada rejects, it set off a cascade of additional requests for help.
But unfortunately most of those travelers were hoping for something I couldn’t do.
Can Hilton be forced to allow the completion of the former contracts?
Nellie B.* was one of those Casa Dorada enthusiasts with the most at stake. Over the years, she had acquired nine timeshare units at the property. She had greatly enjoyed her many visits to the Los Cabos location for many years and looked forward to many years to come.
(*I’ve changed Nellie’s name at her request to protect her privacy.)
Of course, that all changed last December.
Nellie didn’t want a buyout offer. She wanted Hilton to allow her contracts to stand as is.
“How can the Hilton Los Cabos (a franchise) break our contract since Club Casa Dorada had an agreement with them?” Nellie asked me. “They are evicting us! This should be illegal.”
I reviewed Nellie’s timeshare contracts, and I had some bad news to share.
Keep in mind that I’m not a lawyer. I’m a consumer reporter who has reviewed thousands of contracts over the years. However, you should not consider my opinion legal advice. But…
You’ve got two clauses in that contract that lead me to believe your choices are limited to the ones offered to you already [by RGN] — or a third one which would involve filing a complaint and/or lawsuit in Mexico.
You signed the contract in Mexico, and Clause 18 says you waive your rights to file a complaint anywhere but in Mexico, specifically, in Cabo.
The other clause that I find most relevant is number 9. This says that if, for some reason, the timeshare guest is not able to use their reservation at the regular location, the timeshare company can substitute a similar quality property (I am paraphrasing). The Hilton has severed ties with your timeshare company, and so the timeshare program has now found what they believe to be a similar quality property to finish your contract. If you don’t agree to the switch or the offer for the buyback, then you can file a formal complaint with PROFECO in Mexico, which is the government’s department of consumer protection. They can let you know if you have any additional options or rights concerning this situation.
(Michelle Couch-Friedman, Consumer advocate)
Nellie agreed with my assessment of the situation. She told me that she’d spoken to an attorney who found the same clauses problematic for her desire to stay at the now-renamed Hilton Grand Vacations Club La Pacifica in Los Cabos.
Nellie, like all the other people impacted by this travel fiasco, has some decisions to make about her nine timeshares.
The bottom line
Timeshares can be a fabulous option for travelers who enjoy visiting the same place year after year – especially if the unit can be snagged for next to nothing through a reseller shop like the one eBay hosts.
But timeshare seekers should always keep in mind the following:
- The laws and regulations in the country in which you sign your contract apply to it. In many places there is no grace period where you can back out if you change your mind.
- Never sign a timeshare or travel club contract under duress or under the influence of alcohol.
- Read the contract in its entirety, even if it takes hours. These are legally binding, so before you agree to a 10 to 30-year commitment, you must ensure you understand all parts of the agreement.
- Never attempt to use a credit card dispute to resolve a timeshare disagreement or to attempt to break your contract. Understand that credit card disputes only end your bank’s involvement in the problem. Even if you “win” your credit card chargeback case, the timeshare company is always free to pursue the debt in other ways. That includes involving the authorities and having you arrested in Mexico… where you might stay for a long time. (Michelle Couch-Friedman, founder of Consumer Rescue)
