Complaints about overseas time shares rise

by Magdalena Osumi

Staff Writer

Consumer affairs centers are seeing an upsurge in complaints from people who bought time shares at luxury resorts overseas, including in Hawaii.

The National Consumer Affairs Center of Japan is warning consumers to be more cautious and better acquainted with the legal terms of a contract, which is often in a foreign language, before signing it.

According to the NCAC, 93 complaints and inquiries were filed with consumer affairs centers across the country in fiscal 2012, and it expects to see more this year. There were only seven such cases in fiscal 2003.

Under the time-share system, joint owners have the right to use a property for a specified, limited time, typically for a one-week holiday a year.

The NCAC said that over 92 percent of those who sought advice asked questions about legal terms in their contracts and how to cancel the agreements.

Many consumers, the NCAC warns, know too little about time shares and too often sign contracts with agencies without fully understanding the agreements.

“Since we can only rely on the information provided by the consumers, we can’t analyze the trends,” a spokeswoman at the NCAC said. “However, apparently many of the travelers who decide to participate in the programs do not fully understand contract terms.”

Marriot, Hilton, Sheraton, Four Seasons are among the firms offering time shares at luxury villas and hotel resorts.

The time-share system was introduced in the 1960s by a French developer, whose company’s slogan was: “No need to rent the room, buy the hotel — it’s cheaper.”

Today, numerous U.S. companies offer time shares at thousands of hotel resorts worldwide.

The NCAC said many companies lure vacationers to resorts with special deals and then make “limited-time offers,” urging the customers to sign the agreement the same day. Most lack legal expertise and are vulnerable to being deceived, the NCAC said.

Vacationers are often swept up in the emotion of their trips and don’t give the risks enough consideration or take other factors such as currency exchange rates or administrative fees into account, the NCAC said, adding that information provided in Japanese might be incomplete.

“The day after I signed the document in English, I received information in Japanese with details regarding administrative fees to be incurred every month,” said a woman in her 50s in her complaint. The woman was one of the 54.6 percent seeking to cancel their agreements. As many as 21 percent said that the explanation they were given was incomplete, while 8.5 percent claimed they had been deceived.

On average, the buyers in the 390 cases from fiscal 2008 and 2013 paid about ¥2.8 million each.

According to the center, Japanese law might not apply to business activities outside the country. It also emphasized that taking advantage of the so-called cooling-off period, when a purchaser can cancel a purchase, may be one of the best ways to avoid time-share trouble.

The time-share system, which became popular in the 1970s in the U.S. as a way for families to take cheaper holidays, is popular with Japanese in their 30s, who accounted for 23 percent of the 390 cases from fiscal 2008 to 2013.