When most people hear the word “timeshare,” they immediately think of a scam. There’s a reason why the term timeshare carries a negative connotation — too many people have become victims of timeshare frauds.
Timeshare ripoffs are real, and they’re a genuine cause for concern. Whether you own a timeshare or have been invited to a timeshare presentation, it’s important to be alert and suspicious of sweet-talking salespeople. In this post, we’ll cover top timeshare frauds, so you know what to look for and how to avoid them. As you’ll soon see, you can stand up against scammers and aggressive salespeople.
What Is a Timeshare?
A timeshare is an agreement in which you own part of a vacation property. When you buy a timeshare, you’ll pay several thousand dollars up front, yearly maintenance fees — which you must pay whether you vacation at the property or not — and other fees such as special assessment fees and taxes. In exchange for your money, you’ll get to use the property for an allotted number of days, typically the same time every year. When you’re not at the vacation property, someone else will be there.
Timeshares have been around since the 1970s when developers discovered they could sell time rather than units. The new business model was first used with big companies like Hilton and Wyndham in popular resort destinations in Hawaii, Florida and California. Today, timeshares make up a $9.6 billion industry in the United States, according to the American Resort Development Association (ARDA). Over 9 million U.S. households own one or more timeshares.
Top Timeshare Scams
Unfortunately, timeshare scams are commonplace. For example, in 2013, the Federal Trade Commission (FTC) announced 191 actions to stop fraudulent timeshare operations. Many of these scams involved timeshare reselling, and a lot of the victims were elderly or desperate to get out of their timeshare. Owners turn to fraudulent companies for help reselling their timeshare, only to later find out they’ve been conned.
Scammers have taken millions of dollars from victims across the country through timeshare scams. You might feel misled or fall victim to a scam during the buying or reselling process. The good news is that you can save yourself from a timeshare scam by knowing what to look for and how to react if a con artist tries to reel you in.
1. Timeshare Buying Scams
Usually, timeshares are sold during timeshare sales presentations. During a timeshare presentation, salespeople use various sales tactics to pressure people into buying. Many timeshare owners regret buying their timeshare after they made the purchase. They may feel they were misled or pressured into buying a timeshare. Some couples say they felt trapped at the sales presentation for hours without food, water or bathroom breaks.
For example, one couple, both in their early 40s, were kept for hours in the presentation room until they were in tears and finally made a $15,000 purchase. Although people may think that only the elderly and nice couples fall victim to timeshare buying scams, anyone is vulnerable at a timeshare presentation. So, how does someone get conned into buying a timeshare? Here’s how it works:
- They get you while you’re on vacation: Timeshare salespeople target vacationers for several reasons. First, while you’re on vacation, you’re in a relaxed state of mind. Your guard is down, and you’re determined to enjoy yourself, which means you’re not as resistant to spending money. Second, you may be vacationing at a resort that you might be interested in returning to again. A timeshare salesperson can use that knowledge in their sales pitch when they try to convince you to buy a timeshare in that location.
- They offer gifts or free vacations: A salesperson might approach you by phone, email, mail, or in person and promise a gift, free vacation or discount. They’ll say that all you need to do to claim your gift is attend their short presentation. Remember — nothing is free. What they don’t tell you is that during the presentation they’ll lie to you, manipulate you, drain you emotionally and try to hold you there longer than the time they promised. If you leave before the agreed-upon time, you won’t get the gift or discount and will have to pay the full amount for your vacation. Sometimes, people find out they aren’t given the reward unless they buy a timeshare, despite what they were told at the beginning.
- They claim it’s an investment: Timeshare salespeople will say anything they can to get you to buy. Sometimes, they’ll outright lie to you if it means they’ll close a deal. They might tell you a timeshare is an investment and will increase in value over time. In reality, timeshares are not an investment — they depreciate over time and are difficult to sell. If a salesperson tells you the timeshare will make you a profit, run as fast as you can and don’t look back.
- They don’t talk about the fine print: During a timeshare presentation, salespeople can say whatever they want because none of it is in the agreement. If you read the fine print, you’ll find hidden fees and other surprises the salespeople conveniently left out. Expect to hear all of the benefits and none of the risks.
- They use high-pressure tactics: Timeshare salespeople are trained to break down your defenses, argue aggressively and use emotions to manipulate you. They may try to make you feel guilty for not buying, bully you or create a sense of urgency — anything to make you surrender and buy on impulse. Before you head to a presentation and spend hours in a high-pressure environment, consider if it’s worth it to you.
One might argue that timeshares are inherently a scam. If you buy a timeshare, you’ll put thousands of dollars into a piece of property every year that you may not even get a chance to visit, and you won’t see any return. You might think of a timeshare as paying for a hotel room every year for the rest of your life whether you use it or not. Sounds like a ripoff, doesn’t it?
2. Timeshare Resale Scams
Timeshares are often sold through deception and pressure. The trickery doesn’t end in the presentation room. Timeshare owners also have to look out for timeshare resale scams.
Because timeshares are very difficult to sell, there’s an entire industry of scammers promising to sell timeshares for a hefty fee. Fraudulent timeshare reselling companies look for timeshare owners and then try to take advantage of their desire to sell. They know many people want to get out of their timeshares, and that timeshares lose value over time. So, if you own a timeshare, you’re automatically a target for resale scammers. A timeshare resale scam is pretty simple. This is what usually happens:
- A con artist calls you, claiming they are a real estate broker and say they have buyers who will pay top dollar for your property.
- They request a fee upfront, usually calling them transaction fees or taxes, and ask you to pay via wire transfer or credit card.
- After you pay hundreds or thousands of dollars, the “broker” disappears, and there’s no way to get your money back.
Sometimes the scammer contacts you again and asks for another fee to help you recover the “lost” money. Of course, they never recover the money or answer your calls after you pay a second time. Some scammers steal the identities of actual real estate agents to make it seem like they have legitimate licenses.
Even though fraud reports have declined since 2013 when the FTC cracked down on scammers, frauds continue. Scammers can easily obtain the names of timeshare owners by mining public records and compiling a list of targets. They particularly look for people who own low-value timeshares and who are likely desperate to sell.
How to Avoid Timeshare Scams
Whether you received an exciting offer in the mail for a free tropical getaway or purchased a timeshare years ago that you feel stuck with, there are ways to protect yourself from falling further into a scam. First, here’s how to avoid buying a timeshare in the first place:
- Think critically about the offer: The first step to avoiding a timeshare scam is to avoid timeshares altogether. When you receive an offer for a gift, no matter how tempting it is, consider if it’s really worth it. Be especially wary of offers that seem too good to be true.
- Know what you can handle: If you know you’re the type of person who struggles to say no or who feels guilty for refusing to buy something from a pushy salesperson, consider if you can stand up for yourself in a high-pressure setting. If you have any doubt in your mind, skip the timeshare presentation, toss the offer in the garbage and don’t look back, no matter how badly you want to go to Hawaii.
- Never buy on the spot: Whether you attend a timeshare presentation or receive a timeshare-related phone call, never make a purchase impulsively. Take time to consider your options carefully before committing to anything, and always read the fine print outside of a high-pressure environment. If you realize you are interested in buying a timeshare, do your research, talk with your financial advisor and know exactly what you’re buying before you sign on the dotted line.
- Be wary of free alcohol: Some timeshare companies offer free alcohol during the sales pitch — another one of their tactics to get people to buy. Be alert if you’re offered free alcohol, and ask yourself — would you buy a house or new car after having a few glasses of wine?
- Say no and mean it: Don’t be afraid to tell a timeshare salesperson no. Be firm and persistent. You don’t owe them anything, and you’re not rude by saying no. You’re protecting your financial future, which is far more important than pleasing a salesperson, no matter how friendly they seem.
- Leave the presentation: A salesperson cannot force you to stay in the presentation room. Although you won’t get the prize if you don’t stay for the agreed-upon time, know that you can always leave a presentation if you feel too uncomfortable. However, in many cases, it’s best to avoid timeshare presentations in the first place.
If you already own a timeshare, you need to know how to spot a timeshare resale scam and how to react if someone tries to con you. Here’s how to protect yourself from resale scams:
- Hang up the phone immediately anytime someone offers to buy something from you that you didn’t advertise.
- Never give your personal information like credit card number or bank account info over the phone to anyone you don’t know.
- Avoid any resale company that asks for fees upfront.
- Be wary of companies that promise to sell your timeshare for a too-good-to-be-true price.
- Check with the Better Business Bureau to see if the company has previously been reported as a scam.
- Verify the broker is properly licensed in your state, and only work with licensed agents.
- Avoid companies that do not provide a full physical address, even if they give a postal box number.
- Ask for everything in writing before you pay anything.
- Don’t pay anything until after your unit sells.
- Avoid brokers who find excuses not to meet in person or talk on the phone.
- If you search for resale companies online, avoid sites that do not use secure forms.
- Avoid companies that only list their phone number on their contact page.
- Know that a website can be phony even if it looks professional.
Get out of Your Timeshare With EZ Exit Now
With so many sharks swimming around the timeshare world, how do you know who you can trust to help you cancel your timeshare? It’s not always easy to spot a timeshare scam, and anyone can fall victim to high-pressure sales tactics. At EZ Exit Now, we understand how frustrating the process can be, and we’re here to help you cancel your timeshare the right way.
We’re a timeshare exit company that specializes in developing timeshare exit strategies for individuals who qualify. We understand that all of our clients have unique situations. That’s why we’ll meet with you personally to find a custom solution and relieve you of your timeshare as quickly as possible. Here’s what you can expect when you reach out to us for help:
- We’ll meet with you one-on-one in a setting that’s comfortable for you, whether that be your home, office, or a local café.
- We’ll listen to your story, ask questions, and discuss your situation in detail, so you never have to feel left in the dark.
- Once we have all the details in order, we’ll discuss your options and whether we can move forward as a team.
We know things often seem murky when it comes to timeshare companies, and that’s why we offer a detailed, transparent process. If you’re ready to stand up to timeshare frauds with a company that cares, reach out to us at EZ Exit Now to schedule your free consultation.