Common Timeshare Scams
Remember, scams won't work if no one sends them any money! Please share this information with your friends and family.
Security Deposit/Good Faith Scam. A company calls and gives a Seller an inflated value for their timeshare and tells the Seller they have a Buyer. Someone then calls and acts as a Buyer and suggest both of you put up a “Security Deposit” as good faith that neither party will back out. The company who originally called the Seller with the offer acts as an escrow for these funds and close the sale. The company calls the Seller and verifies the Buyer sent a deposit to them and asks for the Seller’s deposit. The company and the Buyer disappear as soon as the funds clear.
Advertising Scheme. This is one of the most common scams. Upfront fee companies solicit timeshare owners with postcards, phone calls and emails. They tell timeshare owners that they can sell their timeshare for prices comparable to or more than what the owner paid for it. This is called inflating the truth. In other words they are inflating the value of what the timeshare will sell for and lying to the timeshare owner to get them to pay the upfront fee to advertise with them. If a timeshare owner is told they can sell for a high price then they don’t mind paying upfront to get that price. If the owner rationalizes that they just have give up a little money to get a lot more then it almost makes sense. But it doesn’t. Just ask yourself this, who pays for a service before the work is done? It doesn’t matter how good you say you are. If a company is really the best then they will have enough faith in themselves to receive payment once the work is complete and satisfactory. Some upfront fee companies have almost convinced the public and the Government that their ways are legitimate. It isn’t the upfront advertising fee that is the scam. It is the lie they tell you to get the upfront fee.
Your Timeshare is Sold/Title Search Scheme. The scammer will contact you and tell you that they are agent and have sold your timeshare. All that needs to be done to complete the sale is a title search. They will ask you to pay with credit card or send a check express mail to pay for the title search. They may even tell you that the Buyer will reimburse you for the fee at closing. The Buyer doesn’t want to pay for the fee before closing in case there is a problem with the Title. The Scammer will even send you a legal looking contract to seem legitimate. Shortly after receiving your funds, the scammer will disappear and disconnect the 800 number they gave you. In some cases, they will even give you a courtesy call and tell you the Buyer backed out but that they will keep the funds and the title search for the next Buyer that comes along and of course you will never hear from them again.
We are Buying Timeshares for a National Company. The scam artist claims they are buying timeshares for a large nationally known company who wants them for their employees or for rental income. In order to be “guaranteed” a spot for the national company to buy your timeshare you will be asked to reserve a spot. Once again, the scam artist claims the national company is paying a high price for the timeshare (more than it’s actually worth).
“Guaranteed” Sale/Refundable Upfront Fee. No company can guarantee your timeshare will sell. They can guarantee or promise to advertise it until it is sold or they go out of business but no one can “guarantee” it will sell. However, in an attempt to get your upfront fee and make you feel secure they tell you it is refundable. They will tell you that you will get your money back at closing. To further prove themselves they will even promise to give it back if anyone else sells it before they do. When you contact them to get it back they have a variety of excuses about rules that you didn’t follow and you never get it back. If they have so much belief in their company’s ability to sell it then why do they need to take it in the first place?
“Guaranteed” Offer. An upfront fee company will tell you they have an offer and upon the payment of an upfront fee to them, they will bring you the offer. They paint themselves as a middle man who gets paid for bringing buyers to sellers. So not to break any laws, once you pay, they will bring you an offer just as they “guaranteed”. Typically, they or someone on their behalf will make you a ridiculous offer for a low unacceptable price. The bottom line is that if someone has an offer for you they don’t need an upfront fee to present it to you. A perfectly acceptable and fair way of being paid is to negotiate a fee that is paid to the company at closing. If they say no then you know it’s a scam.
Upfront Fee Lies. A scam artist or upfront fee company may give you an of the reasons below to get you to pay a fee in advance.
a. “It pays for your share of closing costs.” This is a lie. All closing costs are paid at the time of closing.
b. “The company’s policy is to take partial commission now and the rest at closing.” Why do they need any of it ahead of time? What happens to that money if the sale fails? Its just an excuse to get you to part with your hard earned money.
c. “It pays for Title Charges.” This is a lie. Title companies do not collect their fees prior to closing.
d. “You will get your money back at closing.” It is more likely that there will not be a closing and there isn’t even a buyer. If this were true then why do they need to collect it now just to give it back? There is no good, logical, ethical reason.
Vacation Club Scheme. These schemes are run in group presentations, usually in the conference rooms of large hotels. They will advertise things like “Never pay for a maintenance fee again” or “We’ll take your timeshare off your hands” or scare the elderly stating “Don’t leave behind a timeshare with increasing maintenance fees and burden your children.” They go to ethical lows to sell this scheme. Once you attend the presentation some of them will sell you on trading in the timeshare you currently own to join a vacation club that has no maintenance fees. They will show you the regular price to join the vacation club but tell you that if you trade in your timeshare you get to pay a reduced price. They will make it look like you are getting rid of your timeshare and saving something big like 80% off the regular prices. What a deal! Baloney. Others companies will promise to take your timeshare off your hands for good so you don’t leave the burden to family when you pass. And guess what! All you have to do is pay them a couple thousand to do this favor for you! In other words, you can pay them to “buy” your timeshare from you for free! What happens to your timeshare? It is then given to a person to sell on Ebay or similar auction for whatever it will bring. The person selling the timeshare gets the profit from the sale so they don’t care how much it sells for. The person selling you the Vacation Club gets your money. The person you pay to take your timeshare off your hands gets your money. In every scenario, you lose.
Donate Your Timeshare. The definition of “donate” according to Merriam-Webster is “to make a gift of; especially: to contribute to a public or charitable cause. If you are truly donating your timeshare you should not have to pay anything. There are companies that will tell you they collect timeshares for donation. In order to donate your timeshare, however you have to pay an “appraisal” type fee to find out what it’s worth and send you the appropriate tax deduction forms. Once again, you pay them to take your timeshare for free and then they turn around and sell it at auction for pennies for all they care. No appraisal is ever done. They keep all the profits. If there is no upfront fee of any kind to you, then find out who is recording the deed, how it’s being recorded and when it confirmed recorded. Then confirm who is notifying the resort that the property has been transferred. Follow up to ensure these steps are taken or you will find yourself still owning it and being billed for future fees. When these companies ask you to “donate” it there is no “public or charitable cause” they are simply preying on your desire to be rid of it and to do something good.
We Buy Timeshares Scam. But you must pay closing cost, appraisal etc. If you have to pay anything to sell your timeshare don’t do it. Once again, they are tricking you into paying them to take it and then try and sell it for anything they can. If they don’t, it’s common the transfer never goes out of your name and they disappear with your money.
Agency Refund Scheme. A scam artist contacts you claiming to be an “ARDA Agent”. They say they are dispersing funds collected by the Attorney General in a legal action against a resale company you advertised with. He just needs you to fill our a phony form and pay a “small fee” (a few hundred dollars) to process the claim. Although the Attorney General in Florida and a few other states have pursued and prosecuted some resale companies and scammers, any refunds would be from the Attorney General’s office directly and no fees would be necessary for processing.
Overpayment/Nigerian Scheme. For sale by owners who have placed ads online, especially with free places like Craig’s List, are the target for this popular scheme. In fact, the scam is popular for anyone selling anything online. The scammer sends you a check for more than the purchase price “by accident”. They communicate with you that it’s okay if you go ahead and cash it and send them a check refunding them in the amount they overpaid. You remit the check only to find out days later that their check bounced and yours was already cashed. Now you’ve lost your money and possibly your timeshare too!?
Recovery Service. As if once isn’t bad enough, there are some getting double duped! A scam artist posing as an agent from a fraud recovery service company contacts an owner who previously paid an upfront fee to an advertising or fake company. This second scam artist may say he is an attorney or works with an attorney’s office and can help recover a portion of the upfront fee previously paid. But of course, to do so, the owner has to fill out some forms and pay an upfront fee or a small “retainer” for the services. A second version of this scam has someone calling the victim claiming to be from the original company who scammed them. They apologize for any misunderstanding between the you and them, listen to the issue and then offer to refund your money. They ask for a credit card to facilitate the transaction. A refund never appears, they disappear and fraudulent charges begin appearing on your credit card.
We are posting this for informational purposes only and make no reference, either written or implied, as to the perpetrator of these scams.