Timeshares have always been a source for fraud and victimization. As consumer cautions have grown, scammers continue to develop new means of deceit. Now, scammers target those victims that are trying to get out of their timeshares. Many of these victims are people who bought a timeshare unaware of the extra costs and fees associated with it and can no longer handle the financial stress, or inherited the timeshare and simply cannot afford it. Unfortunately, this has created a new host of fraud—that of timeshare resale.
As a practical matter, timeshare resale can be an incredibly complicated and daunting prospect. Laws regulating the resale of timeshare vary greatly by state and county, and depending on your ownership type and resort, not all of your rights may transfer to a buyer. This makes finding potential buyers no easy task. Despite scammer promises, most people will not get back what they originally paid for their timeshare. Developers and resorts often factor the money spent on timeshare sales presentations, incentives, and giveaways into the costs of the timeshare, thereby creating a markup that is unattached to the value of the timeshare.
As unfortunate as this is, this resale market has led to new means of deception. Scammers know that the hidden costs of timeshare ownership coupled with the difficulty in selling timeshare interests have caused many people to become desperate to sell or unload their timeshare interests. Thus, they have created a scam catered to these sellers.
The timeshare resale scheme works to target likely sellers of timeshares by promising a buyer at fair value. In order to coax the seller into believing the rouse, the scammer may use a decorated website for a fake agency or even engage in identity theft by using the real name and license number of an actual real estate broker. Furthermore, the paperwork may include official-looking letterhead and a local address and phone number. The purpose of these tactics is to gain a seller’s trust and business. The scammer will offer to take care of the entire sale for minimal cost, as long as the seller simply pays a “standard” upfront fee to cover incidentals such as taxes, services, closing costs, maintenance fees, etc. The upfront fee is usually gone in a fee dispute or business closure and, if it was paid by wire transfer, once a victim sends the money, the funds—along with the scammer—disappear without a trace.
Furthermore, this may just be the beginning! Oftentimes, another legitimate-sounding agency will contact the seller and offer to recoup the money lost in the first scam for yet another upfront fee. As before, no money is ever recovered and the second scammer also quickly vanishes. In fact, in many cases, the original resale scam artist they are purportedly tracking down, is actually just one cubical away.
The deceit continues to grow as scammers continue to develop their schemes. It is important to remember that a scammer’s goal is always to remain one step ahead of the victim. Therefore, if you own a timeshare, make sure to stay on guard and avoid scammers at all costs by following a few simple guidelines from Consumer Reports at ConsumerReports.org:
1. BE WARY OF UPFRONT FEES. Legitimate fees are typically paid after the sale is concluded or are deducted from the sale price.
2. IF IT SOUNDS TOO GOOD TO BE TRUE, IT PROBABLY IS. Timeshare resale scammers often promise they have a buyer who is ready and willing to pay a lot in order to get you to send money. Be cautious; no one can promise a quick sale.
3. DON’T WIRE MONEY, PAY IN CASH, OR SEND A MONEY ORDER, CERTIFIED BANK OR CASHIER’S CHECK. Money sent by these methods is very difficult for law enforcement officials to help you recover. It’s as good as lost.
4. DO YOUR RESEARCH. Don’t be tricked by a fancy address or professional-looking website. Contact the State Attorney General and local consumer protection agencies in the state where the reseller is located, as well as the Better Business Bureau, to determine if there are any existing complaints.
5. CHECK WITH YOUR RESORT. Find out whether the resort where your timeshare is located imposes any restrictions, fees or other limitations associated with sales. Ask if the resort has its own resale program or has ever worked with the reseller who has contacted you.
6. DEMAND EVERYTHING IN WRITING. Consider having an attorney review the documents before you sign anything.
Illegitimate firms and agencies that are in the business of scamming you always request up-front fees. While rare, some firms collect legitimate fees only after the sale is concluded or as a deduction from the sale price when it occurs. It is important to remember to NEVER send an upfront fee, especially in the form of a wire transfer (see number 3 above), that may never be recouped or traced.
Furthermore, always remember that YOU are your best asset! Do not let yourself be fooled by official-looking paperwork. Make sure you do our own research and confirm that an agent or broker is who he says he is. Remember that legitimate firms and agencies have nothing to hide so they are happy to have you check them out!
If you need help getting out of a timeshare (if you can not sell a timeshare, you may need to cancel a timeshare contract), you can contact The Abrams Firm at (360) 918-8196 for a free consultation. We are Consumer Protection Attorneys that ensure your protection by NEVER charging ANY upfront fees.
[Source: Fredman Catherine. “Timeshare Resale Scams: Look for these Warning Signs to Detect Fraud.” Consumer Reports. June 13, 2015.]