TimeshareU 401: Industry Scams
In this article we describe some of the more common timeshare industry scams and ways to avoid them. Unfortunately the timeshare industry has a reputation for being prone to scammers. We are very grateful to the various states' Attorney Generals' offices, and private consumer advocacy groups such as the Better Business Bureau and Consumer Affairs, for their continued efforts to prosecute and shut down the scammers in this industry. Smart timeshare/vacation club consumers are advised to study up on the various timeshare industry scams in the event they receive a call from a scammer.
1. The Upfront Fee. The upfront fee is probably the most well-known timeshare industry scam. In the classic case, a scammer will cold-call a timeshare owner and tell them they have a buyer for their timeshare, the owner just needs to send the scammer a check for the closing costs. Or the scammer will call and say they just sold the same timeshare the owner has for an outrageous price, and they have more buyers waiting to purchase what the timeshare owner has, they just need an advance marketing fee of several hundred dollars. Another version is for a scammer to call a timeshare owner posing as an attorney and offer to get the owner out of his/her contract - for a large upfront legal retainer.
Regardless of the form, the upfront fee scam always requires the timeshare owner to send several hundred dollars to the scammer, and the transaction never results in the owner's timeshare/membership being sold. NOTE that this scam involves someone asking a timeshare owner for several hundred dollars upfront. There are several reputable sites where you can rent/sell your timeshare yourself for a small fee (less than $75) - these aren't scams.
Lesson: NEVER pay anyone hundreds of dollars upfront to sell your timeshare. Research the person/company you are working with and make sure they are a trusted industry professional.
2. The Rubber Check. In this scam, a timeshare owner selling/renting his timeshare receives an email inquiry from a potential buyer/renter who offers to purchase/rent the timeshare for MORE than the list price, and asks the timeshare owner to send the scammer the difference (usually by Western Union). For instance: "I know you're probably getting a lot of offers on your timeshare for sale for $5,000, so I'm willing to pay you $3,000 over your asking price. All I ask is that once you receive my deposit of $9,000, you send me a Western Union wire for $1,000." The timeshare owner wires the money to the scammer, and later the check from the scammer bounces. In the above example, the timeshare owner has been scammed out of $1,000.
Lesson: NEVER send anyone a wire transfer for amounts received by a check that can later bounce.
3. Selling to the Viking Ship. In this scam, the scammer sends out postcards to timeshare owners offering to purchase their timeshare if the owners attend a special presentation at a hotel ballroom. At the presentation, the scammer will scare the owners into thinking their timeshares are worthless, and will be a financial curse to their children once they inherit them. The scammer will then convince the room full of owners into paying the scammer $400 - $4,000 to purchase their timeshares. The timeshares are bought buy a shell LLC (the "Viking Ship") that never pays the maintenance fees, and the resort/club ends up having to initiate foreclosure proceedings to get the timeshare back.
Lesson: DO NOT attend a presentation by someone claiming they will buy your timeshare, and DO NOT pay anyone substantial money to take your timeshare from you.
Got it? Then...
CLICK HERE for TimeshareU 501: Timeshare or Vacation Club?
1. The Upfront Fee. The upfront fee is probably the most well-known timeshare industry scam. In the classic case, a scammer will cold-call a timeshare owner and tell them they have a buyer for their timeshare, the owner just needs to send the scammer a check for the closing costs. Or the scammer will call and say they just sold the same timeshare the owner has for an outrageous price, and they have more buyers waiting to purchase what the timeshare owner has, they just need an advance marketing fee of several hundred dollars. Another version is for a scammer to call a timeshare owner posing as an attorney and offer to get the owner out of his/her contract - for a large upfront legal retainer.
Regardless of the form, the upfront fee scam always requires the timeshare owner to send several hundred dollars to the scammer, and the transaction never results in the owner's timeshare/membership being sold. NOTE that this scam involves someone asking a timeshare owner for several hundred dollars upfront. There are several reputable sites where you can rent/sell your timeshare yourself for a small fee (less than $75) - these aren't scams.
Lesson: NEVER pay anyone hundreds of dollars upfront to sell your timeshare. Research the person/company you are working with and make sure they are a trusted industry professional.
2. The Rubber Check. In this scam, a timeshare owner selling/renting his timeshare receives an email inquiry from a potential buyer/renter who offers to purchase/rent the timeshare for MORE than the list price, and asks the timeshare owner to send the scammer the difference (usually by Western Union). For instance: "I know you're probably getting a lot of offers on your timeshare for sale for $5,000, so I'm willing to pay you $3,000 over your asking price. All I ask is that once you receive my deposit of $9,000, you send me a Western Union wire for $1,000." The timeshare owner wires the money to the scammer, and later the check from the scammer bounces. In the above example, the timeshare owner has been scammed out of $1,000.
Lesson: NEVER send anyone a wire transfer for amounts received by a check that can later bounce.
3. Selling to the Viking Ship. In this scam, the scammer sends out postcards to timeshare owners offering to purchase their timeshare if the owners attend a special presentation at a hotel ballroom. At the presentation, the scammer will scare the owners into thinking their timeshares are worthless, and will be a financial curse to their children once they inherit them. The scammer will then convince the room full of owners into paying the scammer $400 - $4,000 to purchase their timeshares. The timeshares are bought buy a shell LLC (the "Viking Ship") that never pays the maintenance fees, and the resort/club ends up having to initiate foreclosure proceedings to get the timeshare back.
Lesson: DO NOT attend a presentation by someone claiming they will buy your timeshare, and DO NOT pay anyone substantial money to take your timeshare from you.
Got it? Then...
CLICK HERE for TimeshareU 501: Timeshare or Vacation Club?
