How to Avoid Timeshare Scams

Learn how to protect yourself from timeshare scams and bad deals.

By , Attorney

If you're thinking about buying a timeshare—or you simply plan on attending a sales presentation in order to get a free hotel stay or another gift—you should go into the timeshare tour with your eyes open to avoid getting taken for a ride. On the flip side, if you've already bought a timeshare and want to unload it, you need to protect yourself from the many timeshare resale scammers that will try to take advantage of your situation.

Read on to learn more about how to avoid a bad timeshare sale deal, as well as resale scams.

How to Spot Timeshare Scams: What to Watch Out For During the Presentation

If you decide to attend a timeshare presentation, even if your intention is just to get a free gift, you need to be on the lookout so you can avoid a bad deal. (Learn the Top Ten Reasons to Think Twice Before Buying a Timeshare.)

Watch Out for the Hard Sell

When you think about timeshares, it might conjure up the image of a shifty, fast-talking salesperson that pressures you relentlessly to make a purchase. But maybe you're willing to put up with the presentation to get a free night at a hotel or another prize. Keep in mind, though, that many people who attend timeshare sales presentations walk out as timeshare owners whether they planned on buying one or not. To stop this from happening to you, you should go into the presentation fully informed about how timeshares work so that you can make a rational decision about whether purchasing a timeshare is right for you.

Evaluate the Timeshare Resort Before Attending the Meeting

If you're thinking about buying a timeshare in a particular resort, you should evaluate the resort developer before you walk into the presentation. Even if you think you won't be tempted to purchase a timeshare, it's a good idea to investigate the developer ahead of time so you'll know who you're dealing with and, perhaps, their tactics.

Check the Better Business Bureau website and run a Google search to find out if there are complaints against the timeshare developer. Timeshare owners and potential purchasers who've had difficulty dealing with the resort often post their experiences and warnings online. Local real estate agents can also be helpful resources for information about the resort and developer.

Timeshare Resale Scams

Unfortunately, if you get roped into buying a timeshare and your cancellation period has already expired, you'll probably have trouble unloading it. There's virtually no after-market for timeshares and finding a buyer can be next to impossible. This is where the scammers come in.

Here's how to protect yourself:

Don't Pay Upfront Fees

In a common scam scenario, a timeshare reseller promises to hook you up with a buyer, but first you need to pay an upfront fee. Timeshare scammers often convince owners to pay large upfront fees by saying they have someone ready and willing to buy the property or that the timeshares would be sold in a specified period of time. Once the timeshare owner pays the fees, the scammers either disappear or claim that they were simply offering to advertise the timeshare unit and no buyer ever materializes.

Many states have strict laws governing timeshare resales, including restrictions on collecting advance fees. Talk to an attorney in the state where the timeshare is located to find out about relevant laws.

Don't Pay Mystery Fees

In another common scam, a potential "buyer" calls you and offers to purchase your timeshare for say, double what you paid. The supposed buyer (or the buyer's representative) might not ask for an upfront fee, but in the middle of the transaction, you'll have to pay for a "tax fee," "insurance premium," or something similar, but bogus. Fees will keep popping up, and as long as you pay them, the scammer strings you along, maybe telling you that you'll get reimbursed. But there is no buyer, and you won't recoup your money.

If It Sounds Too Good To Be True, It Probably Is

Again, there's virtually no after-market for timeshares. You can purchase most timeshares on the Internet for pennies on the dollar. Very rarely does anyone make a profit when selling one. So, if someone offers you a deal that's too good to be true—like claiming a buyer is seeking you out or offering you significantly more than you originally paid for the timeshare—you're most likely dealing with a scammer. Don't ignore these kinds of red flags.

Don't Sign Anything at the Meeting

If you do decide to use a resale company, don't sign a contract when you first meet with the company. Take the documents that the company provides with you when you leave the meeting so you can spend some time reading the fine print. If certain promises were made about selling the timeshare, make sure those promises are covered in the contract. You should also review the contract and documents with an attorney.

And if there's no meeting: beware. If a resale company wants to do the entire transaction over the phone and is unwilling to meet you in person or provide a physical business office address, this is a clear sign that the company isn't legitimate.

Know Who You're Dealing With

If you decide to pay a fee to a timeshare resale service to help you sell your timeshare, be sure you investigate it thoroughly before moving forward with the deal. Ask lots of questions and verify everything the company tells you.

Licensing Requirements

In some states, only licensed real estate brokers may list and sell timeshares for resale. If your state requires a real estate or timesharing sales license, check with the state's Department of Real Estate to make sure the agent has a valid license. If the agent is licensed, check to see if there have been any disciplinary actions taken against the agent.

Check With the Better Business Bureau

If you're thinking of using the services of a timeshare resale company, be sure to check the Better Business Bureau website for any complaints that might have been registered against the timeshare company. Don't do business with the company if there are grievances filed against it.

Search the Internet

You can also run a Google search to find out more about the company that you're dealing with. Timeshare owners who have previously been scammed often post their experiences and warnings about scammers online.

Learn About Common Scams So You Can Avoid Them

New timeshare scams seem to pop up all the time. Check online to see what other people have gone through to make sure you don't get similarly taken. The Federal Trade Commission website is a good place to start, and be sure to read the comments that people post.

Reporting a Timeshare Scam

If you think you've been a victim of a timeshare scam, contact:

  • your state's Department of Real Estate (if a real estate license is involved)
  • the Federal Trade Commission (1-877-FTC-HELP)
  • your state Attorney General's Office, and/or
  • your local Better Business Bureau.

Reporting unscrupulous timeshare schemes can help prevent others from becoming victims.

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