Timeshare fraud can take many forms.
Buying a timeshare can make your vacation time even more relaxing. With a timeshare, you know you have a nice hotel or condominium ready for you at your favorite vacation spot with all the amenities you want. However, when you are looking to buy or sell your timeshare there are several common scams to should know about in order to avoid becoming a victim of timeshare fraud.
The Timeshare Consultant or Lawyer
This is the timeshare rescue scam that preys on people who decide too late that they just don't want, or can't afford their timeshare purchase. The timeshare rescue agency will claim to be a consultant, advisor, lawyer, or timeshare advocate. They offer promises to help you cancel your contract and get a full refund of your legitimate timeshare purchase, for a hefty fee of course. In a 2010 Massachusetts case, such timeshare rescue scammers represented themselves as working with the attorney general's office. In the end, the timeshare advocate does not help the owners and the money is never returned.
You can avoid this timeshare scam by carefully reading your timeshare purchase contract and understanding the laws in your state. In some states and with some purchases, you do have the option to terminate your timeshare purchase contract within a set number of days after a purchase, no lawyer or advocate needed. If you are past this period, then a lawyer cannot help you cancel the legally binding purchase contract unless fraud was involved. You will have to sell or transfer your timeshare to get rid of it.
The Late or Maintenance Fee is Due Immediately
With this, the timeshare owner is called and told they must pay a late fee or missing maintenance fee to maintain their timeshare use rights. Since the fee is usually relatively small, less than $300, the owner often gives a credit card number over the phone to quickly pay the "bill" without question. This money is never received by the timeshare property management and the payee has trouble tracking down who has the money.
Instead of agreeing to pay immediately, saying you will call to pay the bill tomorrow gives you time to investigate the bill in question. Hang up and call your timeshare company directly to determine if the bill is indeed late.
The Timeshare Rental Scam
When posting your timeshare weeks for rent you probably already know you need to take care in selecting renters. However, this fraud can happen even if you do not post a for-rent notice. Sometimes the scammers contact you unexpectedly looking to rent your unit. Once the fee and terms are agreed to, the renters send you too much money. When you send them the overpayment, you find that the original check has bounced. Interestingly, the scammers in these cases tend to be religious works, priests and missionaries from out of the country looking for a place to stay. This story probably helps build trust, which is key to successful scam. When you are renting your timeshare, make sure the check clears before continuing with the agreement.
The Sell My Timeshare Now Scam: A Timeshare Resale Scam
The timeshare resale scam is probably the most prevalent. As a timeshare owner, you can sell your timeshare, and use any number of reputable companies to help you advertise and connect buyers. Unfortunately, there may be just as many unscrupulous companies. Timeshare reselling scammers tell owners that they have buyers already for the timeshare and you can sell your timeshare now; all that's needed to complete the transaction is a fee, usually in the thousands. Once the fee is paid, the timeshare owner learns that what they really paid for was an advertising fee, there is not a buyer and the company does not help sell the property beyond placing a for-sale listing. Never pay a fee upfront when working with a company that helps you sell your timeshare and you can completely avoid this scam. Commision fees should only be paid after the sale of the timeshare and advertising fees should not cost more than about $100. If you are asked to pay hundreds, or even thousands, of dollars to sell a timeshare fast, you may have encountered timeshare fraud. Walk away and take your time to consider the offer.
The Vacation Club Switch
Here a timeshare reseller says he will buy your timeshare if you buy a vacation club membership. The reseller will claim that minus the payment he will make for the purchase of your timeshare, the vacation club membership is a great deal. It's an opportunity you just can't pass up. Here's an example of how this works. The reseller says the vacation club membership costs $5,000 and promises to purchase your timeshare for $3,000. The vacation club membership then looks like a good deal at "only" $2,000 and you get rid of your timeshare. The timeshare seller, now vacation club member ends up with turns out to be a worthless membership and no timeshare to sell.
The Save the Timeshare Scam Victims Scam
Once you've been scammed, the anger and desire to get your money back can lead you to yet another scam. With any of these scams, you may be contacted by a "consultant" to "help" you reclaim your lost money, for a fee. If you didn't contact the lawyer yourself, you should be leery of anyone wanting to help you get your money back. Many believe that they were contacted with this tactic by the same group that scammed them out of their money the first time, that's how they have their information.
Timeshares themselves are not a scam. However, the selling and buying of timeshares seems to be an easy industry for scammers to target. The process of buying and selling timeshares can be tough to navigate, as the ownership of a timeshare is different from the ownership of typical properties. In addition, since timeshares are not an investment that's likely to earn you money in the long run, when your budget no longer allows for the monthly timeshare payments, you may need to sell your timeshare quickly. You best defense against timeshare fraud is to understand what is a timeshare, research the process and learn what to look for in reputable timeshare companies. Also, if something doesn't seem right, trust yourself and just walk away.