For years I have wanted to attend a timeshare presentation. You know, the kind where the most talented, aggressive, and tricky salesmen in the world convince vacationers to purchase a vacation property for one week a year forever. I am not interested in a timeshare, but I have heard so many horror stories of people buying property they didn’t actually want to buy that I thought this is something I need to see in person. On a recent trip with my family to Puerto Vallarta, Mexico, I decided it was the time to fulfill my dream. (I was actually more excited about a timeshare presentation than seeing the ocean, and I love the ocean.) Arriving at the airport, we were instantly swarmed by dozens of timeshare sharks, pretending to be there to help us get a taxi, hotel, or whatever else we may have needed 30 seconds after walking off the plane. I didn’t feel like booking a timeshare right then, so I did what seemed to be the polite thing. I pretended like they didn’t exist.
From what I have heard, I would be swarmed by timeshare slingers all up and down the beach, but if there were any, they stereotyped (correctly) and avoided me with my two-month beard and eight-month old hair cut. Finally, the day before we had to leave Mexico, a man named Noah asked me if I would like to go to a timeshare presentation. I couldn’t accept any of the snorkeling, boating, or any other tours normally given as bribery gifts to people willing to subject themselves to the presentations (aggressive sales pitches) since we were leaving the next afternoon, so he offered me $100 USD to attend the 75 minute presentation. After a little haggling and a couple of “final offers” we agreed on $120 (about 2,000 pesos). He offered me $200 if my wife would attend with me (apparently it is easier to sucker a couple than only one man), but bringing a baby to a timeshare presentation didn’t sound like such a good idea. I committed to attending the next morning and assured him I wouldn’t back out for any reason. Noah said this was important because he would be charged a fee if I backed out of the reservation.
The next morning we met at the appointed time and Noah walked me down the street to his manager’s office. His manager sat me down and went over the situation with me. She said since I was going to the presentation alone I had to tell them I was single or they wouldn’t let me attend. One of a couple never buys properties so both need to be present if married. I was told to take off my wedding ring and lie about my family. I was not happy about this at all, and my conscience told me not to, but I removed my wedding ring and placed it into my wallet. I told myself that if I backed out now, Noah would have to pay the fine, I wouldn’t get to see the world’s best con men at work, and I wouldn’t earn an easy $120. Then, the manager asked when I was leaving town. I told her I was returning home later that day. She said, “No, you just arrived and won’t be returning until the end of the week! This is what you tell them or you won’t be allowed to attend the presentation. If you tell them you are leaving tomorrow, you will get in trouble and I will get in trouble for sending you.” The manager took the receipt Noah gave me and tore it up. She wrote up a new receipt that said $1,500 pesos, explaining that the timeshare would pay the 1,500 pesos after the presentation and she would pay the remaining 500 when I returned to the office.
The manager hailed a taxi and paid the driver to take me to a Pemex gas station where I met her “supervisor”, “Shorty”, who jumped in the cab for the ride down the coast to the timeshare. In the cab it became quite clear that Shorty was not the supervisor, but another timeshare shark who usually spent his time accosting travelers arriving at the airport. I wasn’t quite sure of his connection to the woman in the office or to Noah, but somehow they had a mutually beneficial relationship. He talked to me about the upcoming presentation and said, “If they ask, you must tell them you met me at the airport or they will send you away.” He also tore up my new receipt and wrote one that said they would give me a certificate for 1,000 pesos. He said the timeshare couldn’t give out more than that there, but I would get my remaining money when I returned to the office after the presentation.
I was not sure what to say at this point. I was layers of lies deep and wasn’t sure if I should tell him I already went over this with the lady in the office or if that was a secret too. I figured I would just keep my mouth shut as much as possible, and if I didn’t get all the pesos I was promised, no big deal. I was determined to see the timeshare presentation.
However, by the time we reached the timeshare, I was unhappy that I had agreed to go along with all the lies, I was nervous about how much time it had taken to get this far. (We had a plane to catch that day, and I was going to be pushing it if the timeshare presentation went long.)
I was welcomed into a comfortable waiting room in the timeshare. Shorty handed an employee a copy of the newest version of the receipt and I was introduced to a handful of incredibly friendly employees. After filling out some paperwork (on which I continued the lies) I showed them my ID and a couple of credit cards (they wanted to be sure I had the ability to take out a high interest loan to buy a timeshare) and was introduced to my guide, Mondo.
Mondo, a friendly, well dressed 29-year-old, sat with me as I filled out a survey about where I have traveled, how much I spend on my vacations, where I want to go next, etc. When we discussed what I paid for my trips he was astounded. He called a co-worker over so that I could explain to both of them how I spend almost nothing on my vacations.* By strategically using credit card bonuses, I get flights and hotels for free or close to free. On this trip to Puerto Vallarta, all we had to pay for was taxes on the flights and food to eat while we were there. Mondo asked me to explain the entire process to them so that they could start saving money on their own travels. He also said, “It’s clear what you have going is a much better deal than this timeshare. Let’s just get you through the tour so you can be on your way with your bonus.”
The property was beautiful! There were numerous infinity pools overlooking the ocean, beautiful restaurants, and the apartments were huge – with glass walls to the outside that could be folded back to allow complete access to the open balconies. I completely understand the allure of purchasing a share in something like that, especially if it is cheaper, per night, than staying at a hotel. (Oh no, I am starting to sell myself on the deal.) We moved swiftly through the property and ended in the deal closing room, where there were a variety of salesmen and women sitting with potential timeshare owners.
Looking around, I noticed all the potential new suckers owners had large margarita glasses sitting in front of them. The fact that signing a contract under the influence is legal in Mexico didn’t surprise me. What did surprise me, was that all these people were purposefully impairing their own judgment while being pressured by the world’s best salespeople to make a major financial purchase! Tens of thousands of dollars were on the line and everyone was getting drunk. To be honest, I wanted a margarita too, but I had already made enough poor decisions for the day, and I had a plane to catch.
Mondo quickly went over some of the packages available for me to buy, even though he knew I had no interest in the deal. His supervisor came over to our table when I said it was time for me to leave. The supervisor was aggressive, and made ridiculous claims about how affordable the offers were. This was the moment I had been looking forward to for years, the opportunity to see a tricky, pushy, lying salesman do what he does best. The truth was though, at this point, I felt rushed to get back. I also felt terrible for lying about my wife and son. My wedding ring was in my pocket, and I couldn’t wait to put it back where it belonged. I stood up and said I had to go that instant. They cashed me out my $1,000 pesos, and I put my wedding ring on as I quickly walked to a taxi down the road.
The taxi driver dropped me off in front of the office where the lies had begun a few hours prior. As I walked up to the entrance to ask for my remaining $1,000 pesos, the woman I spoke with earlier (the one who told me to make up all the lies), and another man with her, started yelling at me.
“You lied to the timeshare!” they said, “the timeshare called your hotel and found out that you checked in with your wife and baby, and you are leaving today! You need to give us back the money because they are making us pay back all the money they gave you!”
I knew this wasn’t true, but just another layer in their profitable scheme of lies. I also knew I wouldn’t be getting the rest of my promised money. I had no proof they owed me anything. My constantly changing receipts had all been torn up, and plus, they were right. I had lied. I told them both that they had done a good job cheating everyone, I wouldn’t be paying them anything, and I walked out.
That night, back in the US, I lay awake reviewing all the shady corruption I had joined in/been a victim of. Besides feeling terrible about my part in the lies, I realized the entire incident resulted because of perverse incentives involving lots of money. The timeshare company obviously paid the sharks on the street well to bring tourists in for the presentations. The street sharks didn’t care if I met the criteria the timeshare wanted, they got paid for bringing in warm bodies. The sales department didn’t care if the clients signed papers while under the influence, they got paid for selling shares. The timeshare doesn’t care if drunk tourists sign up for property they won’t use. An underutilized timeshare is still profitable for the company. I had clear incentives to lie about my family. The system is set up in a way that corruption is inevitable.
The next morning the Wall Street Journal had an article about Wells Fargo. The banking giant recently has been ordered to pay a $185 million fine for engaging in fraudulent activity. The bank fired over 5,000 employees and blamed them for the unethical behavior. While the employees may well have deserved to be thrown under the bus for their part, when fraud is this widespread throughout a company it is clearly a problem of leadership creating perverse incentives for its employees. As Khalid Taha, a former employee, said in a statement, “When I worked at Wells Fargo, I faced the threat of being fired if I didn’t meet their unreasonable sales quotes every day…”**
Properly aligning incentives can be a difficult task for a company trying to expand rapidly or increase their growth numbers for their shareholders. Providing financial incentives for employees who sell more product can be an effective strategy if done properly, but if the employee feels too much pressure to sell, unintended consequences are sure to occur. Like Wells Fargo, the timeshare company has financial incentive to sign up as many people as possible for their products. Also like Wells Fargo, they created a strong set of perverse incentives that encouraged people to lie, cheat, and steal.
This has been an embarrassing blog to write. I started and stopped writing it a few times. I wish I could point my finger at Wells Fargo, timeshare companies, and the corrupt people who cheated me and the timeshare. Unfortunately, I failed the same test they failed. I was lied to, cheated, and stolen from, while I lied to, cheated, and stole from a company that I assumed was in the business of lying, cheating and stealing. In reality, that company, while shady in their practices, was the most ethical of all of us that day. I am not keeping the 1,000 pesos, although I haven’t figured out what to do with them yet. (any ideas?) I need to be able to trust myself. My family needs to be able to trust me. If I can’t be trusted to be honest over 1,000 pesos, how can I be trusted in big matters? I might as well change my blog name to www.WellsFargoGuideToEthics.com.
*Using credit card bonus points for free vacations is completely legal, legit, and within the terms of the CC companies. I will write a more in depth blog on how this process works in a few months.
Very nice review. It is very hard to maintain ethical behavior when uncertainty, pressure, and incentives dominate the culture. It is easy to write scholarly articles on ways to avoid unethical behavior, which I have been experiencing in my MBA course work. It is much harder and important to figure out how to build enough personal integrity to win those battles when they come.