How to Avoid Timeshare Scams
The timeshare industry gets a lot of criticism for being riddled with scams. While there are many fraudulent businesses operating in the industry, there are still very reputable and legitimate companies out there, one of which is SellMyTimeshareNow.com.
Because of the prevalence of scams within the industry, it is important to be aware of the different types of resale scams out there. If you know how to detect them, you can better protect yourself from fraud. Find all this information and more below, or contact one of our timeshare representatives if you have any further questions.
Types of Timeshare Scams
It is difficult to detect a timeshare scam if you are not aware of the many possible approaches companies may take. Become informed on these different tactics in order to know what to avoid when buying a timeshare.
The Anticipatory Escrow
You should never pay the escrow fees until after a price has been agreed upon and the purchase and sales agreement has gone through. Some companies may ask you to pay the escrow fees in advance in order to “make the process go faster”. Such a request is a violation of brokerage of law and you should refuse to make the payment. They may also ask you to prepay additional fees, such as the closing costs “to save time”. Always have your lawyer review the contracts in question before agreeing to anything.
The Wire Transfer
You should never have to pay for a company’s services exclusively through a wire transfer or with cash. Legitimate companies are happy to take any form of payment, including credit cards, debit cards, or checks. Fraudulent companies will insist on you paying with cash or a wire transfer because that makes it more difficult to track your money.
The Bait and Switch
In this popular scam, a timeshare salesperson will verbally explain the cost you will be paying for a timeshare and what you will be getting with your ownership, including the unit size, features, amenities, etc. You are then asked to sign the contact quickly in front of them. However, when you go to the property, you will discover that what you paid for is not what the salesperson described. To avoid this, make sure you see and read the contract before paying, and have your lawyer look it over before signing anything. Do not agree to the salesperson sending you the contract later on in the process; always take a copy with you.
The Up-front Fee
Not every company that charges an up-front fee is a scam. Many companies (not just in the timeshare industry) use up-front fees to make sure they get paid for their services, or to help pay for the costs of doing them. For the consumer, it is important to find out what the up-front fee is for before agreeing to pay. An up-front fee for advertising costs is common because advertising is the very first step in selling. If you are asked to pay for preemptive escrow fees, commissions, closing costs, or any other additional charges, be wary that this might be a scam.
How to Protect Yourself from Timeshare Scams
There are many things you can do to protect yourself from scam companies when buying a timeshare. When deciding on what kind of timeshare to purchase, it is important to know exactly what you are looking for, including location, resort brand, size unit, features, and general price range. Familiarize yourself with the timeshare industry by researching beforehand. Our timeshare buyer FAQ page is a great resource for first time buyers.
Once you have done your research and are ready to start the buying process, make sure to follow these steps to avoid becoming a victim of timeshare scams:
Be skeptical of any company that contacts you out of the blue. Anytime you consult with someone in the timeshare industry, it should be because you contacted them and asked for their help, not the other way around.
Be prepared for timeshare sales presentations, if you choose to attend one. Salespeople can often be pushy and may be misleading as well. It is best to avoid signing any contracts or agreements on the same day you attend a presentation. Sales representatives will put a lot of emphasis on making you “buy now,” but it is important for you to take the time to consider whether or not buying this timeshare is the right option for you. This is what also makes the resale market such a great option for many timeshare buyers.
Review all contracts and documents with a lawyer before signing. Many scams in the industry are all about the fine print. Make sure you understand what your money is going towards and you are paying for exactly what you were told.
Do as much research as you can. It is a great idea to talk to current owners from the resort you wish to purchase a timeshare at. Ask them if they have experienced any problems with the timeshare resort itself or with the resale company.
Whether you are interested in buying a timeshare, or would like more information, SellMyTimeshareNow.com is a great, reliable resource. Contact one of our timeshare specialists today.