Every industry has scammers and cheats, but the vacation ownership industry tends to attract more than most. From predatory sales staff using high-pressure sales tactics to shady “timeshare resale companies” seeking huge upfront fees, forewarned is forearmed. To that end, in this article, we will be talking about some common timeshare scams and how to avoid them.
From the first time you hear a sales pitch until you finalize your timeshare exit, there will be a lot of people who are trying to part you from your money. We’ll focus on some of the most common scams at different points in the life of a timeshare contract, in chronological order, along with some red flags you can recognize before it is too late.
Many people would likely tell you that the first and most insidious timeshare scam is the one that happened when you stepped in the room for a sales presentation. Between the hype and high-pressure tactics, many people end up signing without a full understanding of what they’re agreeing to — such as ever-increasing annual maintenance fees.
According to the American Resort Development Association (ARDA), in 2022, the average maintenance fee amount was $1,170 (up from $1,000 in 2018). That amount will only continue to go up as the years and inflation take their toll. (Consider also that ARDA is an organization of resort developers, and the real numbers are likely higher than they estimate.)
If you’re serious about buying a timeshare, though, you will need nerves of steel, good expert advice, and the ability to say “no” if a resort developer starts trying to sell you something you don’t want.
You’ll also want to avoid signing anything until you’ve had a chance to read over the contract, think through your decision, and run the numbers on the true costs. Timeshare salespeople will often say that it’s not possible to read everything and consider every angle; this is a sure sign that you are being scammed.
Once you’ve had the time to sit down and crunch the numbers, you’ll likely find that it makes more financial sense to just plan your own vacation each year based on your current budget rather than sign up for a lifelong timeshare commitment.
It’s also a good idea to read reviews from past and current owners.
If you’ve already purchased a timeshare and are looking for a way out, you might be hoping that you could sell your timeshare to someone else. Unfortunately, even if your timeshare’s mortgage is paid off, you will find it hard, if not impossible, to sell the timeshare — especially for a profit.
Even real estate agents who specialize in the practice will tell you that timeshares are difficult to unload because they are not seen as valuable real estate. They don’t appreciate the way other holdings might. You can see this is true just from browsing sites like eBay, where you’ll find hundreds if not thousands of listings for free timeshares from owners desperate to give them away.
If you have an exotic deeded timeshare in a great spot in Hawaii, you might have a shot, but if you’re a member of a small vacation club in Orlando, Florida, you’re almost certainly out of luck. Anyone who tells you otherwise may not have your best interests in mind.
Timeshare resale companies are almost never legitimate companies. These companies work by calling up desperate, financially strapped timeshare owners out of the blue and claiming that they have a buyer lined up. All the owner has to do is make a wire transfer or credit card payment of thousands of dollars in upfront fees, and the company will sell the timeshare in record time.
The problem, though, is that this is all a lie. As indicated in an advisory by the attorney general of Florida, timeshare resellers often make misrepresentations about their abilities to sell units. In the worst cases, they simply take an owner’s money and vanish, leaving the owner in worse financial shape than when they started the process.
The best way to avoid timeshare resale scams is to find a different exit method for your timeshare. (Centerstone Group has several strategies for doing this that are far more successful than resales.)
If you’re going to try to sell your timeshare, you should never send money to a reseller in advance. Legitimate Realtors do not take a fee on the sale of real estate until the property is sold through the escrow process. It also helps to check with the Federal Trade Commission (ftc.gov) to make sure that the people you are dealing with are legitimate.
Given the bleak outlook for timeshare sales, we recommend that you get an expert opinion, like one from the team at Centerstone Group, before you sign any contracts or turn over any money.
Assuming you manage to avoid resale scams, you unfortunately also have to deal with poor practices by many substandard timeshare exit companies.
Timeshare Exit Team is a cautionary tale of what can go wrong when unqualified people try to run an exit company. They gave terrible advice – like telling owners to stop paying fees – and were ultimately the subject of a consumer protection lawsuit by the attorney general of Washington for their bad business practices.
There are good timeshare exit companies out there, and you have tools to find and separate them from the rest. The Better Business Bureau (BBB) maintains profiles for timeshare exit companies. It also has reviews from people who have used a company’s services.
Centerstone Group, for example, stands as the premier timeshare exit company in the business, with an A+ rating from the BBB and a 4.8-out-of-5-star customer rating. Good timeshare companies will also welcome questions from potential clients, spending time analyzing your case before recommending a potential strategy.
Stay away from any timeshare exit company with a one-size-fits-all approach (like referring all of its clients out to lawyers) or one that tells you to do something dangerous or legally questionable (like not paying your annual maintenance fees).
Also, keep an eye out for other red flags. Some more common ones are promises to get all your money back, cash-back guarantees for exit services, or claiming to have a relationship with your timeshare company that can help you get your exit. In general, you should be wary of any promise that seems too good to be true.
Centerstone Group can help you get out of that timeshare contract. It’s not an easy job, but our dedicated team of professionals has decades of experience in the timeshare industry, and we know how to make timeshare developers give our clients the exit they deserve.
From a contract cancellation or our proprietary pressure campaign to finding a timeshare attorney only when you need one, we can help you use the right approach for your situation.
Contact Centerstone Group today for a free consultation and case evaluation.
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