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• Pending Government Action:

  Government Action: BBB reports on known government actions involving business’ marketplace conduct:

  State of Washington v Reed Hein & Associates LLC, d/b/a Timeshare Exit Team; Brandon Reed; Trevor Hein; Makaymax, Inc.; and Hein & Sons Industries, Inc.
  

  The following describes a pending government action that has been formally brought by a government agency but has not yet been resolved. We are providing a summary of the governments allegations, which have not yet been proven.

  On February 4, 2020, in the State of Washington King County Superior Court, the State of Washington filed a Complaint for Injunctive and Other Relief Under the Consumer Protection Act, RCW 19.86, the Debt Adjusting Act, RCW 18.28, and the Credit Services Organization Act, RCW 19.134 against Reed Hein & Associates LLC, d/b/a Timeshare Exit Team; Brandon Reed; Trevor Hein; Makaymax, Inc.; and Hein & Sons Industries, Inc.

  The complaint accuses Reed Hein of numerous violations of the Washington Consumer Protection Act and the Debt Adjusting Act, alleging numerous unfair or deceptive business practices related to services to “exit” consumers’ timeshares.  The complaint alleges Reed Hein advertised a 100 percent money-back guarantee. In reality, many consumers have struggled to obtain refunds, and are still denied refunds even after the company has failed to deliver for years. Under the terms of Reed Hein’s guarantee, clients who are facing foreclosure are not entitled to their money back, because Reed Hein considers foreclosure a successful outcome — despite the potential damage to the customer’s credit. Many customers are not aware of these conditions on the guarantee. The lawsuit contends this is unfair or deceptive.

  The lawsuit alleges that Reed Hein does not possess its claimed expertise in exiting timeshares, exposing its customers to unanticipated negative financial and other consequences.  About 32,000 people have contracted with Reed Hein to get out of their time-share contracts, some with multiple timeshares. Of those, 2,500 or more are Washingtonians.  Reed Hein has contracted to provide 38,000 timeshare exits. Of those, 17,000 are still pending — more than 8,000 for two years or longer, and more than 4,600 for three years or longer.

  For many consumers, Reed Hein’s promise of a 100 percent, money-back guarantee was a major factor in their decision to contract with the company.

  The Complaint further alleges, Reed Hein regularly denies refunds. Reed Hein’s position is that anything that terminates the customer’s timeshare ownership is an “exit” in satisfaction of the guarantee, meaning that Reed Hein is not obligated to provide a refund — even if that “exit” is the resort foreclosing on the customer, or the customer finding some way out of the contract on their own. For years, Reed Hein also interpreted their guarantee to mean that no refunds were owed so long as the company said they still were working on the case; the newest version of the guarantee states that customers are only eligible for refunds after three years.

  The Complaints states, The company generally charges from about $3,000 to nearly $9,000 for its services. For clients who have a mortgage on their time share for more than $30,000, Reed Hein charges up to 30 percent of the mortgage.

  The State of Washington alleges, Washington has strict rules for people who offer to manage or adjust consumer debt. Reed Hein was not following them, despite contracting with people to get out of mortgages. For example, under the Washington Debt Adjusting Act, debt adjusters may charge no more than $25 as an initial fee, and no more than 15 percent of the debt to be adjusted. For customers with mortgages, Reed Hein was charging up to $8,795, and as much as 30 percent of the mortgage. This is many times what the law allows.

  The court may impose penalties of up to $2,000 per violation of the Consumer Protection Act. Violations of the Washington Debt Adjusting Act are considered violations of the Consumer Protection Act.

  On August 14, 2020, Judge John F. McHale in the King County Superior Court denied the State of Washington's request for preliminary injunction.  The State of Washington did not present enough evidence to show a clear, legal or equitable right in the form of a likelihood of success on the merits of its claims sufficient to support the imposition of a preliminary injunction.

  In response to these charges, the business provided the following statement . . .

  In August, The Washington State Attorney General failed to persuade a federal court judge that Timeshare Exit Team should be stopped from assisting unhappy timeshare owners in cancelling their oppressive, unfair, and in many cases unlawful timeshare contracts. The Court found that the evidence presented by the State did not show that it was sufficiently likely to succeed on the merits of its claims to support a preliminary injunction. The court has granted Timeshare Exit Team’s motion to compel the Attorney General’s office to support its claims with admissible evidence on more than one occasion. We continue to comply in good faith and with the upmost respect for the entire process and we look forward to assisting even more timeshare owners with help in getting out from under their unwanted timeshare ownership.

  While we have always respected the office of the Washington State Attorney General and believed their focus was on consumer protection, we strongly disagree with the allegations leveled in this complaint. For example:

  • We never manipulate our customers and we are extremely clear from the initial point of contact, which is made by the consumer direct to TET, that they do remain financially responsible for their timeshare until the exit is complete.
  • An exit is complete when a customer is no longer burdened by an unwanted timeshare contract. The plain and simple truth is that the majority of our customers do receive an exit—to date we have approximately 21,000 exits and that number grows every single day.
  • Timeshare Exit Team provides a service focused on getting people out of their timeshare. We do this through a variety of avenues including third-party transfer companies, lawyers, conversations with the developers and more, and it can often be quite complicated. To say that the average customers have these connections and processes in place is disingenuous at best.
  • Timeshare Exit Team does not sell debt adjusting services or credit repair services and therefore the statutes the Attorney General has cited to do not apply. We do not have a single contract for debt or credit services because we have never provided them and never will. We do not settle out consumer debt. Third-party attorneys hired by TET for our customers may negotiate, directly with the resort, to settle their clients’ debts, but that is a service that is lawfully provided by the attorneys, not TET.  We cannot begin to understand why the AG would want to keep our customers from receiving the benefits of that service.

  We have complied with the AG’s inquiry from day one and will continue to do so until it’s clear to all involved that these accusations are entirely baseless.”

  -Timeshare Exit Team CEO Brandon Reed

  For more information, please contact Washington Attorney General’s office at https://www.atg.wa.gov/  or (360) 753-6200.

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