How to Spot a Timeshare Scam That Can Cost You Thousands

On the surface, timeshare ownership presents the opportunity to save on vacation costs when visiting a location that you love. However, the industry is rife with con artists looking to make quick cash by convincing those in the market to buy or sell to hand over their cash.

To avoid falling prey to a timeshare scam, read on to learn smart shopping steps, how to recognize common resale scams, and four sure-fire signs that you should walk away.

What to Watch for When Buying a Timeshare

Potential timeshare owners are often lured into presentations by promises of gifts, perks, or even several free days of accommodations. Once you arrive, the sales representatives employ persuasive sales techniques that can catch you off guard.

These high-pressure techniques are often regarded as sneaky or dishonest. However, they’re not outright scams. After all, it’s each individual’s responsibility to be aware of the commitment (and costs) of owning a timeshare before signing on the dotted line.

That being said, there are differences between the tactics used by a legitimate company and those who are little more than swindlers:

  • While both may lure you with promises of a payoff for showing up to their timeshare presentation, trustworthy companies provide simple perks such as a free hotel room or a gift card to thank you for attending.

  • What should raise a red flag are more lavish gifts, such as the promise of free home appliances, a boat, or a car. To avoid being dazzled by big-ticket freebies, consider that you’ll probably never see the promised reward, since they’re not contractually obligated to fulfill their promise.

  • Another warning is if you’re asked to pay for your prize. Legitimate businesses don’t charge prospective customers for participation, and any request for payment is likely an indication of fees to come.

If you decide to attend a timeshare presentation, following these tips can help you avoid buyer’s remorse:

1. Don’t feel obligated to stay. Is the timeshare sales representative’s pitch becoming too aggressive? Instead of enduring the discomfort, exercise your right to get up and leave. It’s very likely that whatever they’re offering you to stay isn’t worth the risk of signing.

2. Don’t sign anything at the presentation. Even if you think that timeshare ownership might benefit your family, give yourself time to consider their offer, research the company by investigating complaints left with the Better Business Bureau, and comparing prices of similar units.

3. Still considering? Take the time to talk with other owners. Particularly if you’ve been invited to visit the timeshare resort that’s being offered, asking around if any other owners have experienced problems with availability, maintenance, value, or the company itself can save you from an unpleasant experience.

We share more advice on what to ask when shopping for timeshares (including a printout of questions to bring along) in “Real Cost of Buying & Owning a Timeshare: What the Salesman Won’t Tell.” If you’ve already signed and want out, don’t despair! You have several days to cancel your timeshare contract. (More on this later.)

Timeshare Resale Scams That Demand Upfront Fees

Whether you’re buying or selling a timeshare, someone who asks for payment upfront will likely disappear once cash is in hand.

From a buying or selling perspective, upfront fees can hide under a number of different names, depending on what action the fee is attached to. Some common reasons scammers give:

  • Appraisal fee
  • Title search fee
  • Marketing fee
  • Advertising fee
  • Prepaid closing costs

The simplest way to avoid handing over your money to someone who has no intention of helping is to never pay a fee upfront. However, in their desperation to sell their timeshare or exit their contract, many owners allow themselves to believe a con artist’s false claims.

Here’s a look at the most prevalent upfront fee scams, including how they’re most frequently presented, and why they’re bogus:

Timeshare Resale Scam #1: Upfront Sales Fees

While upfront fees come in many forms, there’s a specific type of scam that targets timeshare owners attempting to rent or sell. Expect to be contacted by a number of companies claiming to help you sell—some may even offer to “buy” your timeshare.

What it looks like: Scammers attempting to lure timeshare owners send bulk email in the thousands to anyone selling on the internet:

  • “We have a buyer already, just let me get this upfront fee from you to get things started.”

  • “We just sold your exact timeshare for more than your current asking price, so list it with us, and you will easily sell it for that price. But, before we do, we need this one time fee to get your timeshare listed.”

  • “We will guarantee that we will sell your timeshare or your money back. Now we just need this fee to get things started!”

Not interested in selling your timeshare, but still want to offload some of the cost? Fraudsters are also known to contact timeshare owners with similar proposals related to rental listing service—for an upfront fee, of course.

What do you get in return for your upfront fee? In 2007, a forum member confessed to working for a timeshare scam, with the following warning:

“They simply take your money, and you get nothing but a contract stating that they will advertise only on the Internet on their very low-grade websites.”

The post garnered over 32 pages of comments, many from timeshare owners who had been swindled themselves. While some were able to contact their credit card companies to receive a refund, it’s best to avoid becoming a cautionary tale altogether.

How to Avoid Sales Fee and Timeshare Resale Scams?

Con artists are experts at playing to your emotions. Spotting sales-related scam starts by being aware that con artists trying to convince you to fork over your money are going to be upfront about it—instead, be on the lookout for promises that sound too good to be true.

No one can guarantee that your timeshare will be sold.

No one can guarantee that your timeshare will be sold. Those who promise otherwise, especially if asking for an upfront fee, should be avoided at all costs.

Timeshare Resale Scam #2: The Legal Aid Scam

Are you having second thoughts about your commitment to owning a timeshare? Similar to the sales fee scam, individuals posing as representatives for a law firm contact buyers who are desperate to get out of their timeshare contract, promising that they can help you do so—for an upfront fee, of course.

To further gain your confidence, scammers will often claim an association with state or federal enforcement agencies such as the Attorney General’s Office—they may even go so far as to cite fake clauses to help you exit your contract.

How to Avoid Being Scammed by Legal Aid Fees?

Understand your rights as a timeshare owner before you sign the contract.

Timeshare purchasers have the right to rescind (cancel) their purchase—but, the grace period (called the rescission period) for doing so is typically only several days and varies from state to state. For example:

  • Alabama (Ala. Code § 34-27-53): The rescission period is five days, not including Sunday if that is the fifth day.
  • In California (Ca. Business and Professions Code § 11239): The rescission period is seven calendar days.
  • In Colorado (Colo. Rev. Stat. § 6-1-703): The purchaser has up to five calendar days to cancel a timeshare contract.
  • In Florida (Fla. Stat. Ann. § 721.10): The purchaser has the right to cancel the contract until midnight of the tenth calendar day following the execution date or the day on which the purchaser received the last of all required documents, whichever occurs later.
  • In Nevada (Nev. Rev. Stat. § 119A.410): The purchaser has the right to cancel a timeshare contract until midnight of the fifth calendar day following the date the contract was executed.

Recession periods exist to protect individuals who went to a timeshare presentation in hopes of getting a free gift, only to be pressured into signing a contract that they didn’t want, and likely can’t afford.

Unfortunately for those whose buyer’s remorse isn’t realized until later, there is no legal basis for canceling a legitimate timeshare contract, including:

  • The timeshare sales representative lied to you
  • You haven’t received some of the perks you were promised
  • You changed your mind about owning a timeshare

If you signed a timeshare contract of your own free will, no matter why you regret the decision, you’ll probably have to sell the timeshare rather than get a refund.

It’s worth noting that there are very few exceptions to this rule, and that, should you decide to pursue canceling a timeshare contract due to the possibility of it not being valid, these laws also vary by state. Your best bet is to seek out an attorney who specializes in real estate law, but not accept unsolicited representation from a potential scammer.

5 Sure Signs of a Timeshare Scam

You’ve been approached with a timeshare offer that you can’t refuse. But, before agreeing to their services, you’ve decided to research whether or not a company is reputable. The problem? Maybe you can’t find any complaints from previous customers. Or, perhaps the representative seems to have an answer for each and every one of your concerns.

There’s actually a simpler way to help you determine if a company is reputable. Just make sure to watch out for these five telltale signs of a timeshare scam:

1. They Contacted You With an Unsolicited Timeshare Offer

If you’re advertising that your timeshare is up for rent or sale, you’re expecting to receive inquiries. However, it’s the opinion of the experienced timeshare owners at the Timeshare Users Group that legitimate companies don’t contact you out of the blue with offers to rent or sell your timeshare.

2. They Offer More for Your Timeshare Than Your Asking Price

The hard truth is that timeshares don’t make a great investment for owners hoping to sell for more than they paid. There are simply too many units available—being sold by too many pushy developers that have greater access to potential buyers.

So, when a company or individual contacts you with the promise that they can get more than your asking price, it’s best to refuse.

3. They Require a Fee Upfront

We shared two common grabs for your money above, but the demand for upfront payment can come in many forms. Since this is an outright scam, be aware that con artists won’t always be obvious about the cost.

Instead, some may string you along by explicitly stating that there aren’t any upfront fees, but ask that funds be deposited into an “escrow account,” without any intention of ever returning your funds.

Just remember, when selling your timeshare in a legitimate manner, the fees come out of the closing costs.

4. They Ask for a Money Order or Wire Transfer

Unlike Visa or Mastercard, money orders and wire transfers are the preferred payment method of con artists everywhere because they offer consumers zero protection. Simply put, if you pay with either of these methods, there is no way of getting your money back.

5. They Call from 900 Numbers

Much of the advice surrounding avoiding timeshare scams centers on not being pressured into a contract or paying fees upfront. However, there’s an even faster way to spot scammers hoping to swindle you out of money: Avoid companies calling from a 900 number.

While a Federal Trade Commission ruling forces 900 numbers to disclose how much the phone call will actually cost the caller, ask yourself why a legitimate company would need to charge potential customers for a call in the first place—if business is good, why are they in such need of cash?

The Bottom Line on Timeshare Scams

While much of the advice on how to avoid timeshare scams centers on not believing too-good-to-be-true offers, we recognize that’s easier said than done when you’re feeling pressured to buy or sell. From promises of lavish gifts to guarantees that your timeshare will sell, getting swept up in the moment can cloud your common sense.

The bottom line on avoiding timeshare scams? Remember that no legitimate company will ask for fees upfront, offer more than your asking price, or make unrealistic promises about your timeshare sale.

» See Also: Buying a Timeshare: What to Know Before You Start Shopping

Autumn Yates

Autumn draws from a reporting background and years of experience working remotely, while living abroad, to focus on topics in travel, beauty, and online safety.

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