Posted on May 10, 2022
With inflation rising and economic uncertainty impacting finances at levels not seen for 40 years, there are opportunities for scam artists to thrive in this environment. Timeshare has long been an industry where these dubious outfits reside, as rogue exit and resale operators reach out to owners looking to sell a timeshare. So, what are the timeshare scams to watch out for?
Before we get into the types of scams, it’s important to draw a distinction between scammers and legitimate timeshare resale companies. Yes, there are good ones in the marketplace and this is like any other business sector where there are good guys and bad ones.
As you read through the tactics shown below, we not only identify the problem but also provide tips to look for when comparing scammers with a legitimate company.
This is an on-going problem where a company will approach an owner saying they have a buyer waiting to purchase their timeshare. They convince the owner to pay an advance “legal” or “transfer” fee to complete the deal, but there was never a buyer in the first place and the scammer makes off with the money.
What Would Genuine Companies Do: A legitimate company would first seek to establish a relationship with you to understand what you own and how to market your timeshare. Brokers do not ask for money from sellers in advance of a sale.
Rogue companies are known to make unsolicited calls to owners trying to gain their business. This almost always includes a high-pressure sales pitch for an upfront fee before any work is started to sell the timeshare. Once they get the fee, they usually disappear with it.
What Would Genuine Companies Do: While some reliable advertising companies use this telemarketing tactic, be careful of a company calling you that you have never heard of before. Do your research first to protect yourself by contacting a trustworthy firm and they will respond to your outreach.
This has really taken off over the last few years as rogue operators steal the identities of trusted companies in order to promote their services. So much so that the Minnesota Attorney General issued a statement about such tactics. These companies usually use one of the outreach maneuvers mentioned above and follow it up with fake websites or correspondence.
What Would Genuine Companies Do: Trusted companies are as proactive and transparent as possible with their identities, even alerting the public and authorities once they are informed of such a scheme. Before agreeing to any service, research the company to find out where they are located, any associations such as ARDA endorsing their services and management information regarding the principals of the company.
Written agreements spelling out the terms of services are an essential part of the resale business. These dubious outfits often do not offer a written contract or listing agreement before taking your money. Some will even create a fake agreement that may look good just to get your cash.
What Would Genuine Companies Do: Some states such as Florida legally require a written agreement to be in place as part of the service being provided. Brokers use listing agreements created according to the real estate laws of their respective states. You’ll want to avoid companies that do not offer anything in writing. Even if they do, research it along with your other research.
Fraudsters will promise the moon to get your business. In timeshare resales, this is usually in the form of a guaranteed time of sale or, with timeshare exit companies, a money-back guarantee.
These types of guarantees are nearly impossible to fulfill because selling a timeshare is driven by market forces of supply and demand, along with the willingness of resorts and developers to approve such deals. Exit companies have even been fined by state attorney’s general in part for not enacting such guarantees.
What Would Genuine Companies Do: Not offer an exact date or time of sale because of the reasons stated above. Refund or money-back policies are really up to the company and should be outlined in written terms of service. Brokers are legally bound by real estate law to hold any monies in escrow and abide by state law regarding refunds in case a sale does not proceed.
Be not afraid, there are good, trusted companies that operate in the timeshare resale space and work hard to find new owners for sellers. These issues are not meant to discourage owners looking to sell their timeshares or buyers searching for a way to buy discounted timeshares on the secondary market.
We wanted to provide as much relevant information as possible so consumers can watch out for timeshare scams. Many of these areas are consistent with online best practices for interactions in any industry. It’s just that timeshare gets more than its share of publicity because there are companies like exit companies that make money off generating negative press regarding the industry.
The good news is there are safe and effective companies to use when looking to buy or sell timeshares. They are resale brokers who are actual licensed real estate firms regulated under state law for operating in the secondary market. Timeshare Broker Associates is one of them.
If you have any questions about any of these topics and want to run them by a licensed resale agent, click here to leave us a message or call us on 877-624-6889 and we’ll get back to you as soon as we can.