Don't Fall Victim to Timeshare Fraud
A timeshare owner receives a mailer invitation to a timeshare selling informational seminar at a local hotel conference room. It seems like a good opportunity to get rid of a timeshare. If you are looking to sell your timeshare, the presenters may make great claims that they can buy the timeshare from you right now and rid you of a burden that will only get worse. Then they subtlety ask you to pay them to find a buyer. A seemingly reasonable request, as it sounds similar to paying a real estate agent. A buyer is never found, and neither is the money you paid for the "services." This is a common timeshare fraud scheme that catches people who never thought they could be scammed.
No one intends to be the target of a timeshare scam. However, if you are looking to buy or already own a timeshare, it's very possible you've already been contacted by a less than reputable timeshare related company. Does the mailer invitation sound familiar? Or maybe you've received a friendly, but unsolicited, phone call about your timeshare. If you want to buy or sell a timeshare, then should know how to avoid becoming a victim of one of the many timeshare scams out there today.
Know the Red Flags of a Timeshare Scam
Any of the following should be considered a red flag when dealing with a timeshare related business.
- Any unsolicited contact such as a phone call or mailed post card or letter that you did not ask for or sign up for. Start a business relationship by research and then contacting a company yourself. Don't jump into a business relationship with a timeshare company that contacted you out of the blue.
- The timeshare reseller says he already has a buyer ready to buy your timeshare but asks for a large fee to get the transfer started. You should never pay a fee upfront when selling a timeshare advises the Timeshare Users Group. The standard fee charged by reputable timeshare resellers is a commission after the sale or you may pay a small advertising fee to post a listing on a website.
- When a timeshare reseller says the market is "hot" and he has "too many buyers and not enough property" find another company to work with. Timeshares are often difficult to sell, rarely are there more buyers than sellers.
- Any guarantee that the timeshare property can be sold within a set timeframe.
- If a reseller claims you can tax deduct the loss on your timeshare investment, know that this is highly unlikely based on federal tax codes. This is a common tactic to get you to jump into a contract quickly.
- Any "owning a timeshare is a great investment opportunity" statements
Stating the buying of a timeshare is an investment opportunity that will earn you money should be taken as false information. The Federal Trade Commission reports that most timeshares sell for much less than they were purchased for.
Investigate the Company's Reputation
Not all companies that help timeshare owners sell timeshares or operate and sell timeshares to private buyers are scams. Many are reputable companies that provide a valuable service to timeshare owners and buyers. However, you do want to investigate the company's reputation before deciding to work with any timeshare related business. There are several ways you can do this.
- Find out if the company has any complaints or legal action against it. You can do this through a simple search for the company's name on several websites including the Better Business Bureau, your state's attorney general's office, the attorney general's office of the state in which the business is located, and the Federal Trade Commission.
- If you are working with a timeshare reseller, check the status of their real estate license with the appropriate state's department of real estate. You can often do this online as well.
- Do a quick internet search of the company's name. If the company has been investigated for fraudulent practices, there's often news stories about it somewhere on the internet.
Read the Contract
This may seem obvious, but scammers are smooth and can easily get people to hand over money before ever reading or even signing the contract. Don't pay any fees without first reading the contract in full and then signing it. Some timeshare resellers scams involve telling the seller that they will help sell the timeshare for a fee that's often thousands of dollars. They then send a contract that says in fine print that the fee is only for a for-sale advertisement listing of the timeshare and no guarantee of sale is made. The seller then unknowingly signs a contract agreeing to pay thousands of dollars for a small posting on a website.
Pay with a Credit Card
When paying any fees, always pay with your credit card. Then if the services promised are not delivered to your satisfaction you have another avenue to get your money back by contesting the charges with your credit card company.
Report Timeshare Fraud or Scams
If you have been the victim of a timeshare scam, or suspect a company is defrauding consumers you can file consumer complaints with both the Federal Trade Commission online or by calling 1-877-FTC-HELP and your state's attorney general's office. Although you may not get your money back, by taking action against the company you will be helping others to avoid a timeshare scam.
If you are interested in buying a vacation timeshare or selling one you no longer use, you shouldn't let the potential for being scammed stop you. Many timeshare owners greatly enjoy their regular vacations to a favorite timeshare location. Do however, educate yourself about what is a timeshare and how the buying and selling of timeshares work. This will help you spot a timeshare scam or timeshare fraud much more easily and make the buying or selling of a timeshare a positive experience.