Timeshare  weird investment

by Peter Titze

I t started with a phone call when a sweet sounding female called me up at the office and announced that I have been awarded with a choice of a free holiday or another fabulous prize. Enticing my interest since I am involved in the travel business I let her keep on talking and as it turned out all I had to do is to attend a 90 minutes "promotion"  and accepted the invitation. I got a bit worried when she ask me for my personal income and told me that I have to attend together with my partner and so I told her right away that I have no intension to purchase anything but are still interested in the promotion. Well she assured me that there are no obligations whatsoever and I can still claim the prize. Well so I went ahead with it and got even offered "free parking" close to the venue. Further she told me that if I arrive 15 minutes early I get entered also in a drawing for another prize.

Arriving in time at the venue there where about 50 people there so about 25 potential clients since all where there with partner. Starting with some small talk and showing videos of some of there holiday venues it continued with testimonials of clients. In particular it was pointed out that investing with them would safeguard against future inflation. After this introduction a door opened and participants where let away by consultants for individual consultation. Also it was advised that people would need to sign up right now and today in order to get some extra privileges. Wonder how clients could take out an individual assessment with an independent adviser under this circumstances. Anyway the number of people present exceeded the number of consultants so the remainder including myself where attended by the "senior consultant" who started to talk about "Holiday credits" but at no stage pointed out the actual financial total commitment . After I started to ask some unpleasant questions I was quickly complimented out of the room to be attended by an individual consultant who must have become available by then. Even this consultant was talking about some financial "mambo jumbo" which did not satisfy my curiosity. However when I finally confronted him with the facts as published in there own " Product Disclosure Statement " I was told that this 'timeshare' is not suitable for me. So I collected my prize (a DVD player) and left.

So without fact's I had to make up my own assessment on the situation based entirely on the operators own quotations and came up with the following:

They do call there clients "Owners" but I can not find any indication that there members actually own anything except that they have purchased a commitment to make a yearly contribution as a management fee and purchased a number of "Holiday credits" which entitles the "owners"  to spend on use of there facility's . So lets base my calculation on the purchase of 20000 holiday credits which is required for a 2 week accommodation in Fiji at an apartment suitable for 2 people.

Initial purchase price A$ 42950.- (This if you pay outright cash but probably considerably more if you sign up for the financed version where you have to pay monthly installments)

yearly management fee  A$    940.- The 20000 holiday credits become available on a yearly basis.  So the cost on your 2 week apartment rental is a total of A$ 940.-+ A$ 3000.- (approx interest you would earn if you put the 42950 in a term deposit with any bank).  Total cost A$ 3940.- On top goes an establishment fee and you not sure if you can get the required accommodation at the time you want it or at all. Looks to me a very bad investment.         On the other hand you can find numerous apartment for rent in Fiji (just search the Internet or talk to your travel agent) for about $ 1500.- for a 2 week period. You can get something very nice without the need to outlay a large amount of money which does not give you any financial gain and can not be recovered. I think you can not sell ever your investment  or only at a substantial loss so in my opinion this is a scam.

Actually there are numerous web sites available on this subject. just "Google" for "time share scams" and see for yourself.

In conclusion I suggest if you get an similar invitation to accept, collect your prize but don't loose your money.