Ownership of a timeshare in a vacation or destination property is often accompanied by the burden of having to navigate through the ranks opportunistic scammers and shady middle men. This holds true for both new buyers and those looking to resell a previously purchased timeshare.
Vacation time is almost here, and many will be looking to spend a week away with the family the time-honored summer tradition. Whether a beach house or more rustic setting is on the agenda, buying a timeshare in a property can be a cost-effective option for those who require a lot of space when they get away or have a regular vacation routine.
Timeshares are properties, often condominiums, which are shared for pre-determined amounts of time by multiple owners. The rules and regulations can very…some determine times in straight-forward chunks of days off a calendar while others employ quite complex point systems. Some timeshares are strictly for usage of the property without any actual ownership rights or responsibilities, while others rare a little more complicated.
The complexity and confusion are often used to the advantage of those looking to scam potential buyers.
Many timeshares are sold through presentations and pitches given to large groups of potential buyers all at once. Because these sales pitches are often day-long affairs, many companies, both legitimate and shady, will offer incentives and prizes to encourage attendance.
The presentation might take place at the actual property, which makes it much more likely to be the real deal, but normally these are destination vacation homes so the pitch will be at a country club or hotel meeting room near the attendees home town.
These presentations will often be attended by hundreds of potential buyers. The properties they have to offer will be showcased, the terms of purchase, benefits and prices on those properties discussed. At the end of the formal presentations, attendees will be able to pick up literature, mingle with other interested buyers and ask the salespeople questions.
Here are some clues that you might be dealing with scammers, and some of the scams they will try to pull:
— Be wary if the prize or incentive you have promised for attending (whether you purchase the timeshare or not) seems too good to be true. If they are saying you will get a car or boat, use common sense. Will it really be cost effective for the company to do that for the hundreds in attendance? Scammers will require a delivery fee be paid upfront for the prize to be sent to the attendees’ home. These fees can range from between $50 - $100 which has the potential to add a lot of green to the scammer’s pockets several hundred are in attendance.
— There have been reports of a sick twist to these prize/incentive scams. A car or boat was promised, a large delivery was paid, and then two weeks later a cheap toy car or boat arrives on the victim’s doorstep. Legitimate companies will offer prizes and incentives for attendance, but these are normally more along the lines of a free or discounted hotel stays, phones, digital cameras and the like. Never give cash money or a check upfront for a prize delivery fee.
— Avoid the high pressure sales tactics. Buying a timeshare is a major purchase, and any legitimate company is going to encourage a purchaser to have the contracts looked over by an attorney before signing. You should never sign on the day of the presentation. The company should be researched first. The property itself should also be researched first. If a salesperson is pushing you into signing before you walk out the door, chances are they know the more time you are give to think about or look into the offer the more likely you are to pass. The Better Business Bureau is a good starting point for researching the parent company offering the timeshare, the link is provided at the end of the article.
— Many of the shadier salespeople will tap dance around the maintenance fees. These can add up significantly. The website Timeshare Advocacy International says many salespeople will tell potential buyers their maintenance fees can be offset by providing referrals to the company of other interested buyers or that if they pay with MasterCard they can earn dollar awards that can be applied to their maintenance fees. This is absolute rubbish, don’t fall for it.
— Timeshare Advocacy International also warns of salespeople who use tax incentives by saying a timeshare can be considered a second home and written off on next years taxes. This is simply not true and most likely the salesperson is fully aware of the fact.
— One reason to have an attorney examine your contract – many scammers make their money off of selling the exact same timeshare to multiple buyers. The victim arrives at the property, possibly after a flight or long road trip, only to find another family already ensconced there. When the company is called, they claim there was a scheduling issue. In fact, there is the exact same scheduling issue every week. The contract should be very specific about the time allotted, if not agreed upon upfront than clear on the way it scheduled, and that the time sold to the purchaser is theirs alone.
— Salespeople who tell you that if you are unsatisfied then you can just easily sell it aren’t being honest. Timeshares are not a financial investment and are quite difficult to get rid of these days. A quick visit to the websites ebay or Craigslist will quickly confirm that there are plenty of interested sellers out there.
With the economy tanking, many are looking to sell their timeshares and finding it’s hard to get anything close to what was originally paid if they can even find a buyer. Scammers are looking to take advantage of those desperate to sell their timeshares and there are currently a number of scams being utilized. We will cover these frauds next week in a follow-up article.
In the meantime, if you are dead-set on purchasing a timeshare remember to practice due diligence. Do the research, take your time before making a decision and never sign or pay if you feel like you’re being bullied. Follow these common sense rules and your summer will be much brighter.
To research a company offering timeshares, start with the Better Business Bureau –