The Five Stages Of A Timeshare Resale Scam
Many timeshare owners are eager – sometimes even desperate – to unload their timeshare. Some, in fact, are so ready to sell that they’ll take up any offer to resell their unit – and, in doing so, fall victim to timeshare resale scammers for hundreds, perhaps even thousands of dollars.
While there are some reputable and licensed timeshare resale companies, scammers are neither and prey on eager timeshare owners by promising two things, lots of money and a quick sale. Sound too good to be true? It just might be.
Most Common Resale Warning Signs
The FTC also published an extremely helpful infographic breaking down the steps behind a common type of timeshare resale scam. Let’s look at the stages to this popular scam, as well as the cautionary steps you should take as a matter of due diligence. The resale scam starts when…
1.) A Timeshare Resale Company Solicits You To Offer Help
You want to “get rid of” your timeshare, and this organization wants to help! Sounds like a perfect fit right? Probably not.
Be cautious of any timeshare resale company that reaches out to you first with a resale solicitation, particularly if they make claims that the market for your vacation property is particularly “hot” or if they promise they have buyer requests already lined up. Before you go any further with the company, search online for complaints and, more importantly, research them with the Attorney General and the local consumer protection agencies in the state where the reseller is located.
2.) The Company Requests Fees Upfront
Next, the resale scammer will ask for fees upfront, usually fees that must be paid via credit card or wire transfer. Most commonly, the fees are requested to cover line items like closing costs, registration fees, taxes, or timeshare maintenance. Often, scammers will request this transfer before any contract or paperwork is ever signed.
Even if the resale company offers a money-back guarantee, don’t send them money sight unseen. Don’t agree to anything online or over the phone until you have the chance to investigate the reseller and request all information in writing. Before doing any business, make sure you have a contract explicitly detailing the services the reseller will perform as well as the fees, commissions, and other costs you have to pay and when. It is also advisable to have an attorney review the resale proposal and guarantees.
3.) You Pay Up
Some timeshare resale scams have bilked consumers for thousands of dollars.
Remember that, as our own Michael D. Finn shared some experience with creditcardguide.com. Timeshares generally have very little value on the secondary market. Many owners will offer their timeshare on eBay for as little as a few dollars and to be even more competitive, actually offer to cover closing costs or transfer fees themselves.
“In the timeshare world, the seller pays the buyer. That speaks volumes about the value of these timeshares in the secondary market,” said Mr. Finn.
4.) You Realize There Never Was a Buyer
You’ve made it this far and paid the exorbitant fees they wanted. Now you play the waiting game as the scammer disappears with nary an email, phone call, or letter. At this point, it becomes clear that there never actually was a buyer. And because you most likely never signed a refund policy, you won’t be able to get your money back.
To make matters worse, the timeshare scam might not be over yet…
5.) A Second Scammer Tries to Fool You Twice
Consumer Reports explains how a resale scammer may try to double-dip victims:
“A second fraudulent business may then contact the victimized owner offering to help recover the money lost in the first scam for yet another fee. As with the first scam, no money is recovered and telephone calls and emails are unanswered.”
Never Pay For A Promise
If you’re thinking about selling your timeshare, know that you shouldn’t have to pay upfront for help. And be very wary of any company that asks you to do so, especially if they guarantee a sale or offer a money-back guarantee. The Federal Trade Commission (FTC) says, “never pay for a promise.”
Over the last several years, the FTC has shut down numerous companies that operated timeshare resale scams, and has sued others for deceiving timeshare owners. So if you’re thinking about selling your timeshare, beware of offers that sound too good to be true, and be sure to do your research before you pay anyone for help.
If you have been the victim of a resale scam, file a police report and report the issue to the BBB. You may have other legal options available and should consult with an attorney to determine your best options.
Other Timeshare Articles of Interest:
Led by Attorney Michael D. Finn with 50 years of experience, the Finn Law Group is a consumer protection firm specializing in timeshare law. Our lawyers understand vacation ownership as well as the many pitfalls of the secondary market of timeshare resales. If you feel you have been victimized by a timeshare company, contact our offices for a free consultation. Know your rights as a consumer and don’t hesitate to drop us a line with any questions or concerns. Follow us on Twitter.