Radio host and financial guru Dave Ramsey is facing a $150 million lawsuit from former customers of a timeshare exit service he endorsed, Timeshare Exit Team. Customers already in difficult financial straits say Ramsey directed them to a deceptive and costly service for his financial gain.
With a nine-figure net worth, Ramsey has made his name helping his followers remove the shackles of massive debt. Some former clients now allege that Ramsey negligently caused them to fall further into financial quicksand.
Plaintiffs Allege That Ramsey Partnered With a Deceptive Timeshare Exit Company
The allegations against Ramsey are simple enough. Former listeners explain that Ramsey received approximately $30 million from the Timeshare Exit Team, which received repeated on-air endorsements from Ramsey. The problem arises from allegations that the Timeshare Exit Team engaged in deceptive practices, ultimately failing to deliver on their promises despite taking tens of thousands of dollars from each customer.
Plaintiffs Paid Dearly To Escape Their Time Shares, but Are Still Sharing Their Time
Timeshares are contracts that require (often unwitting) individuals to pay a continual fee for a share of a property. These individuals split the cost of the property with other time share-ers, but only have periodic access to the property they are subsidizing. Timeshare contracts can last years or even a lifetime, and many entrants quickly realize that they don’t want to share property, can’t afford the cost of their contract, or don’t want to be obligated to visit the same location year after year.
Eventually, many timeshare “owners” become desperate to exit their contract, and that’s where plaintiffs say the Timeshare Exit Team (and Dave Ramsey) preyed on their desperations.
The company behind the Timeshare Exit Team is Reed Hein & Associates LLC. The Kirkland, Washington-based company paid $2.61 million in 2021 to resolve allegations that it deceived its customers. The allegations levied against the Timeshare Exit Team are:
- The Timeshare Exit Team promised to help customers escape their timeshare obligations
- Customers paid between $3,000 and tens of thousands of dollars in upfront fees based on the promise that, no matter what, the Timeshare Exit Team would help them escape their timeshare contract
- Reed Hein & Associates advertised a 100 percent money-back guarantee that it did not deliver upon
In simple terms, plaintiffs allege they paid the Timeshare Exit Team thousands of dollars without the promised results. When results did not come, they allege, Reed Hein & Associates LLC failed to deliver its money-back guarantee.
Furthermore, plaintiffs allege they would not have used the Timeshare Exit Team’s services without Dave Ramsey’s explicit endorsement.
Does Dave Ramsey Have an Obligation to Vet Those He Endorses on Air?
The $150 million lawsuit naming Dave Ramsey and the Lampo Group (also known as Ramsey Solutions) in the U.S. District Court for the Western District of Washington begs the question: How much responsibility do public figures bear for the actions of those they endorse?
The 17 plaintiffs suing Ramsey allege that he negligently misrepresented the services of the Timeshare Exit Team. Plaintiffs also accuse Ramsey of unjust enrichment and violation of consumer protection laws. The outcome of this civil case will tell whether Ramsey did, in fact, act negligently (or, at least, whether a jury believes he acted negligently).
Should Ramsey face substantial financial harm because of the lawsuit, it may change how radio hosts and other public figures approach endorsement deals.
