The timeshare sector was hit exceptionally hard during the COVID-19 pandemic, but as the vacation and travel industry begins to resurge during summer/fall 2021 months, this same industry will soon return to its predatory nature. As you begin to travel again, it's important to be mindful of potential timeshare scams during your family's long-awaited trip to that special vacation destination.
Timeshares are vacation properties typically sold as shared ownership between several different owners and the timeshare company. Most owners were sold these timeshares after a multi hour, pressure-filled timeshare presentation full of “extravagant” prizes, empty promises and other overwhelming information from two or three salesmen throughout the same meeting.
Salesmen will often pressure you into purchasing a timeshare through an "exclusive" credit card or find other ways to ultimately make that sale during the initial presentation. Beware of these offers as well, because they are often part of larger timeshare scam and will ultimately attempt to take more money out of your pocket.
There are three significant reasons why timeshares are financial scams, which we’ll detail below. But prior to entering any sort of timeshare agreement or sales meeting, you should understand this: timeshares are not financially secure, and they offer no return on investment compared to that of traditional property/real estate options. Timeshare resale scams are just as aggressive and untrustworthy as any other parts of the timeshare industry, and these timeshare resale scams only further the damage already done by the original fraudsters.
Timeshare owners quickly realize that these units cost thousands of dollars per year in mortgage payments, maintenance fees and other associated fees. Although the mortgage might eventually be paid off, the maintenance fees never expire and typically increase annually. You owe these fees regularly and indefinitely, regardless of the amount of your timeshare mortgage. Additionally, the current market rates and costs of travel have been affected by the COVID-19 pandemic, so it wouldn’t be absurd to see these rates rise dramatically in the coming months and years in order for timeshare companies to account for their lost potential income.
One of the most common pitches told to potential buyers during a timeshare sales pitch is, “This vacation opportunity is a great deal for you and your family. You can rent it out, it has a great resale value and it gives you more flexibility than a traditional vacation property.” All of these statements are lies.
Most timeshare owners soon discover that renting out their property is nearly impossible when you only have one allotted week per year to reserve your vacation. This is an easy, deceiving story to tell for timeshare salesmen because, while they’re technically not lying about your ability to rent it, they fail to give you the full picture about your timeshare’s actual availability (or lack thereof).
Furthermore, a quick web search shows that timeshare properties typically sell for pennies on the dollar, and they’re worth nowhere near what you originally paid. On that note, buyers also need to be weary of entering into timeshare resale scams. This is when fraudulent people or an organization might pretend to be timeshare sales companies and, ultimately, will attempt to rob you of your timeshare’s little, remaining value, and even more of your own money--typically in the amount of thousands of dollars or more.
Much like traditional real estate, timeshare agreements include usage rights as well as some regular fees. However, unlike traditional real estate, timeshare properties don’t earn equity, the property isn’t sold off as easily, and most parts of the timeshare agreements never actually expire.
These permanent, lifelong agreements include the annual fees charged to you and your family, the owners, as well as any other additional fees that aren’t covered through the annual maintenance fees. This ultimately means your money (part of which could have gone toward an actual vacation) is sent to a timeshare resort that you can hardly or maybe never even use.
If you were deceived into purchasing your timeshare and want to try to resell it, then you’ll soon realize that the timeshare resale market is full of murky waters as well. Owners flock to these types of markets by the hundreds in order to unload their timeshares to potential buyers, and hopefully save what's left of their money in the process.
After posting your timeshare for sale online or reaching out to any sales company for an inquiry about selling your timeshare, you’re likely to be enrolled in countless robocall lists that will be shared or sold to dozens of timeshare resale scams. But beware: many of these resale scams posing as companies are not legitimate nor credible! Taking extra steps to research a timeshare sales company is essential to ensure that you’re working with a legitimate service in the timeshare industry. Here are a few extra steps to take and factors to consider when you’re working to resell your timeshare option:
Any legitimate timeshare cancellation or sales company probably won’t initiate phone calls out of the blue in an attempt to persuade you to list your timeshare for sale with them. Just like that pesky initial timeshare sales meeting, the scam timeshare resale companies will try to incentivize you to use their services to sell your timeshare option. The timeshare company ultimately wasn’t true the first time around, so what honestly makes you think that the timeshare resale company will be any more truthful and legitimate?
The timeshare sales company might attempt a “required upfront fee” to either sell or exit your timeshare, but don’t give them any of your hard-earned money up front. This is an attempted scam, and this timeshare scam will most likely take your money without ever getting you the results you deserve.
It is important not to provide any credit card information or other valuable information when you receive any solicitous phone calls from timeshare scam companies wanting to "sell your timeshare." Although these scammers already have your contact information, they cannot legally access your personal information (such as credit card or title company information) unless you personally grant them permission.
As owners of a timeshare, you and your family might already find yourselves a victim to the timeshare industry's deceptive sales tactics, but do not rush the process when looking to work with timeshare exit companies.
Advanced technology has allowed timeshare resale scams to target those already in a timeshare agreement and might be looking for a way out. Whether it be advertising in a web search engine or specifically targeting individuals through social media, be weary of an offer posted through outlets like this. Just like the initial timeshare purchase, the timeshare resale option might often be pitched as perfect, but it is often too good to be true as well.
After the pandemic's effects on the travel and timeshare industry, many scammers have developed online and multimedia advertising strategies to reach more consumers through remote models, like social media and web searches. As restrictions begin to ease and more people begin to travel, be weary of these types of scammers poaching on families trying to travel safely again.
Many timeshare agreements include what's known as a "rescission period", which is identified within the timeshare agreement. This period covers a certain length of time immediately after purchasing your timeshare when you can pretty easily cancel your timeshare. Timeshare companies purposely write binding agreements that make it nearly impossible to rid owners of their unit, so this rescission period is typically a small window of time that owners can work with. These timeframes can last anywhere from a couple of hours to a couple of days after signing the agreement, but make no mistake, the companies will work whatever ways they can to ensure that buyers cannot easily cancel their agreements during or after this rescission period has ended.
If you find yourself within a rescission period, be sure to write and send a cancellation letter to the timeshare or title company requesting to be released from the agreement. Be sure to keep accurate records and all correspondence with these companies when attempting to cancel the timeshare.
Before you purchase a timeshare, do your research. It’s important to understand that timeshares are not sound financial investments, and they provide no returns compared to that which you originally paid for your timeshare. If you feel that you’re stuck with your timeshare, you might have a few options to rid yourself of those useless fees charged annually.
If you are already a timeshare owner, do your research prior to trying to sell your unit through any particular company. You likely won’t be legitimately selling or ridding yourself of the timeshare using a sales company that is cold calling you. As you navigate the selling process, be sure to verify a company’s results through past and current customer reviews. Previous timeshare owners can be of great assistance since they've already been through this process. Remember: you fell for deceptive sales tactics before; don’t fall for them again and see more of your money taken away carelessly. You can take steps to avoid further being a timeshare scam victim!
Wesley Financial Group, LLC, and/or its affiliates, successors, or assigns are not lawyers and/or a law firm and do not engage in the practice of law or provide legal advice or legal representation. All information, software, services, and comments provided on this site are for informational and self-help purposes only and are not intended to be a substitute for professional advice, legal or otherwise.