Timeshare ownership and security clearance denials in the US: financial issues and DOHA cases

Security clearance expert Sean Bigley explores an unexpected link between timeshare ownership, financial problems and security clearance denials in the United States.

Security clearance

In the US, many roles with even a remote connection to national security require a security clearance. This includes work in the military or for the federal government. While it’s no surprise that senior posts need vetting, similar requirements often extend down to roles such as librarians and IT administrators.

Private organisations that work with government also routinely need staff to hold clearance. Research organisations, think tanks and anyone operating under a federal grant or contract is likely to face a background check.

Altogether, an estimated 4.3 million Americans require an official security clearance for their work.

Timeshare owner clearance failures

Sean Bigley is a retired lawyer who specialised in security clearance cases, representing clients throughout the process, including applications, revocations, denials and appeals.

On his website, Sean notes that: "year after year, across nearly every federal agency, financial problems far surpass every other category of adjudicative issue as the top reason for security clearance denials and revocations". He adds that "a whole lot of those cases involve, you guessed it: timeshares and man-toys*" (such as boats and RVs).

*Sean uses the term ‘man-toys’ because, as he explains: "'woman-toys' sounds awkward and 'adult-toys' has a different connotation."

Bigley is careful to stress that the relationship between timeshare ownership and clearance revocations is correlational rather than causal. In other words, owning a timeshare does not, by itself, make someone a security risk. As Sean puts it: "there is nothing objectively wrong with buying a timeshare. Or a recreational vehicle (RV). Or a boat."

"I don’t personally think any of those things are smart investments, but if that’s your jam, you do you."

So why do timeshare owners show up in clearance cases?

From Bigley’s decade of representing clearance clients, he believes "there is a certain personality type that tends to be drawn in by timeshare pitches, and gravitate toward boats and RV’s. It’s what I would best describe as the live-and-let-live type. And unfortunately, they often take the same carefree attitude toward paying their bills."

Sean suggests an easy way to see the trend: search for the words ‘timeshare’, ‘recreational vehicle’, or ‘boat’ in the case search function on the Defense Office of Hearings and Appeals (DOHA) website.

The pattern Bigley describes is that people who buy one of these high-cost items can underestimate the true expense of ownership, then fall behind on payments (either for the purchase itself or for ongoing upkeep). That can damage the person’s credit rating and lead to legal action. In turn, government attorneys may portray the applicant as reckless and financially irresponsible, urging a judge to deny, revoke or otherwise refuse a security clearance.

Unexpected timeshare expenses (and why debt matters)

It’s widely understood that boats are a poor financial investment. Informed sources often advise budgeting around 10% of the purchase price per year for upkeep and related costs, on top of heavy depreciation. Similar logic can be applied to RVs: you have the expenses of a vehicle combined with many of the running costs of a small home.

Bigley’s point is that timeshares can create a comparable financial strain. A timeshare can depreciate immediately, and a product that costs tens of thousands of dollars/pounds is often then worth literally nothing on the resale market.

One reason resale can be so difficult is that other buyers may not want to take on the ongoing financial commitment of membership. To escape a timeshare contract, you may need to retain the services of experts.

Many people buy timeshares on credit arranged by the resort, an arrangement that can up to double the total outlay.

Ongoing costs can also be significant. It often costs more in annual fees than it costs a non-owner to stay in similar accommodation (even in the same complex). The owner is committed to paying whether they holiday or not. The resort can also increase charges as much as it wants, as often as it wants. On top of that, there may be further hidden costs such as exchange fees, fees to change usage, and special levies.

Timeshare ownership can make so little financial sense that extensive marketing is needed, driving customer acquisition costs to an average $5075. Highly sophisticated high-pressure sales operations—accounting for up to 80% of the purchase price—are then used to persuade buyers to commit to something that experts say goes against the buyer’s financial interests.

Sean Bigley’s experience suggests that some of the same traits that make a person more receptive to the sales patter may also correlate with poorer money management—exactly the sort of issue that can surface in a security clearance review when debts build up or go unpaid.

"Here at ECC, we are of the opinion that timeshare sales tactics are so skilled that anyone at all can fall for them," comments Greg Wilson, CEO of European Consumer Claims. "The best strategy is not to accept the generous marketing offers of free holidays and theme park tickets when they are offered."

"As the saying goes: 'you get nothing for nothing in this life.'"

I bought a timeshare. How do I get out?

If you’ve been sold a timeshare membership and now regret the purchase, help is at hand.

Get in touch with our team to discuss your options. We can help.