Whether it’s because of financial hardship or buyer’s remorse, many timeshare owners are eager – sometimes even desperate – to unload their timeshare contract.
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 timeshare redemption companies, many scammers also prey on eager timeshare owners by promising “lots of money quickly,” as the FTC puts it, for just a simple upfront fee to cover costs. Sound too good to be true?
The five most common stages of a timeshare resale scam, along with the warning signs you should look out for each step of the way.
How Does a Timeshare Resale Scam Work?
The FTC publishes 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 scam starts when…
1.) A Company Contacts You to Offer Help
You want to “get rid of” your timeshare, and this organization wants to help! Sounds like a perfect fit, no?
Be cautious of any resale company that reaches out to you first, particularly if they make claims that the market in your area 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.
3.) You Pay Up
Some resale scams have bilked consumers for thousands of dollars.
Remember that, as our own Michael D. Finn told 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 actually offer to cover closing costs or transfer fees themselves.
As Michael told the site in an interview: “In the timeshare world, the seller pays the buyer. That speaks volumes about the value.”
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 scam might not be over yet…
5.) A Second Scammer Tries to Fool You Twice
We’ll let Consumer Reports explain how scammers 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.”
As the FTC says, “never pay for a promise.” Be wary of any offers to quickly resell your timeshare for large amounts of money, and never pay an upfront fee without thoroughly vetting the company making the offer. And if you feel trapped or unfairly manipulated by timeshare resort tactics, there are alternatives to trying the resale market.
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.