Some timeshare developers are charging exorbitant rates for financing to unwary customers, as a Deseret Morning News reporter found attending a sales pitch at the Westgate Park City.

He was offered a loan to help finance a timeshare — at a very high 17.9 percent interest.

In comparison, mortgage rates then nationally were between 5.5 and 6.4 percent; home equity loans were between 6.1 and 7.5 percent; auto loans were between 6.8 and 7.8 percent; and even credit card rates averaged between 10.2 and 14.8 percent.

When questioned about Westgate's rate, the salesman, named Mike, said he knew it was high. "That's just our fall-back rate. That's what we would charge if you couldn't find financing anywhere else, but you probably can," he said.

In short, Mike wanted to make an immediate sale — and if the buyer could not obtain other financing within a few weeks, he would be stuck with Westgate's high rate.

The trouble is, many financial institutions will not give loans using a timeshare as security, which some buyers — especially those with less-than-stellar credit — find out too late, leaving themselves on the hook for those high-interest rates.

As Mike noted, "It's not a lot of risk for us, because we have the keys" to the units, and can lock out deadbeats. It is a much higher risk to a bank, which could not easily repossess a timeshare week — or sell it, except for a highly discounted amount.

For example, Paul Larsen said he found about his own initial purchase with Westgate, "America First (credit union) would not let us refinance it through them when we approached them later, and we could find no traditional bank or credit union that would finance it."

Tim Dawson said he meant to look for financing cheaper than the 11 percent that Marriott gave him initially for a Park City timeshare — which was a bit high, but it had come with the offer of a lot of bonus points that could be used for hotel stays and other travel. However, he said he never got around to changing financing, which can make a lot of money for developers.

Charles Smalley, Utah's sole investigator for the timeshare industry, said, "Most reputable timeshare developers have guidelines regarding minimum income and income-debt ratios of potential purchasers; however, those guidelines are subject to the discretion of the sales managers. In some cases, ombudsmen (for developers) have canceled contracts when it was discovered that guidelines were not followed."