As vacation ownership options increase in popularity, more and more consumers are falling victim to the various scams targeting timeshare owners, defrauding consumers of millions nationwide. Two main types of vacation ownership options: timeshares and vacation interval plans. Most buyers don’t realize the value of these options lies in their use as vacation destinations, not necessarily as investments. Due to the availability of vacation ownership options, the resale value is likely to be lower than the purchase price. This leaves consumers open to considering a deal that may be too good to be true.
The typical timeshare scam begins with the timeshare owner receiving an unsolicited offer via mail, email, or by telephone from a supposed ‘timeshare reseller.’ This supposed ‘reseller’ informs the timeshare owner that a ‘buyer’ is interested in their timeshare. Typically, the supposed ‘buyer’ is in a hurry and needs to get the purchase transaction completed quickly. As a result, the “buyer” is willing to pay an extremely competitive and often overinflated price for the timeshare.
Interested timeshare owners who engage the scammers will often receive what appears to be legitimate documentation for the sale, including: official looking contracts, buyer names, address, etc. The scammers even create official looking web sites, company letter head, post office drop boxes, and even provides non-existent or false mailing addresses, in an effort to conceal their actual identities and locations. Even after a quick internet search, many of the addresses appear to be legitimate but a more thorough search reveals most of the addresses are found to be empty parking lots or office suites.
To further the scam, high pressure sales tactics and a plethora of other smooth talking points are used by the scammer in an attempt to get the timeshare owner to send up-front fees via a money transmittal service, such as MoneyGram or Western Union, to initiate the transaction. The scammer usually says the up-front money is required to cover certain costs of the sale, such as: foreign taxes, commissions, and many other so-called ‘sellers’ fees to initiate the sale.
Once the money is sent, the timeshare owner will typically be contacted a second time for additional last minute costs. Of course, these costs are fabricated and simply an effort to extort additional money out of the timeshare owner. In almost every case, the timeshare owner is out the money and is left to deal with the property.
When dealing with a timeshare reseller, use caution and:
- Always be wary of any unsolicited offers.
- Ask the salesperson for all information in writing.
- Do your homework— Review the company’s business report and complaint history from the Better Business Bureau at www.bbb.org.
- Contact your resort directly to verify if the reseller is a known business entity;
- Deal only with licensed real estate brokers and agents. Verify licenses with the local state Real Estate Commission.
- Ask how the reseller will advertise and promote the timeshare unit. Will you get progress reports? When?
- Ask about fees and timing. It’s preferable to do business with a reseller that takes its fee after the timeshare is sold, but if you must pay a fee in advance, ask about the refund policy. Get all refund policies and prices in writing, being wary that documents can be fraudulently produced.
- Don’t assume you’ll recoup your purchase price for your timeshare, especially if you’ve owned it for less than five years and the location is not well-known.
Click here for information from the Federal Trade Commission on how to protect yourself while buying or selling timeshares. (http://www.consumer.ftc.gov/articles/0073-timeshares-and-vacation-plans)