Timeshare Exit Scams: Red Flags and How to Protect Yourself
If vacation ownership were as great as sales presentations make it seem, there’d likely be far fewer timeshare owners looking for an exit strategy. Yet, every year sees a mass attempted exodus from timeshare companies — people looking to get out of their contracts and stop bleeding money. Sadly, this creates a world full of bad actors looking to take advantage of unhappy owners with a variety of timeshare exit scams.
The timeshare scams in question are as varied as the companies that run them. Some brazenly promise things they can’t deliver, take your money, and run. Some string you along with vague promises of an exit, only to abandon you midway through the process, leaving you with your timeshare contract intact but with less money in the bank.
Centerstone Group’s team of professionals has decades of experience in the timeshare industry, and we’ve helped thousands of clients get themselves out of bad situations. This article will explore some of the more common timeshare exit scams and the red flags that herald them.
We’ll also arm you with knowledge, giving you the questions and confidence to stop a bad idea in its tracks before it costs you more money and peace of mind.
What Are Common Timeshare Exit Scams I Should Watch Out For?
Once you start researching timeshare cancellation and other methods of exiting a purchase agreement, you might notice some red flags keep popping up. While we can’t tell you every single timeshare exit scam out there, most fall into a few different types. Once you understand those, the problem of how to avoid timeshare exit scams becomes much easier to solve.
Timeshare Resale Company/Fake Buyer Scams
A common timeshare exit scam is the “fake buyer” scam perpetrated by the so-called “timeshare resale companies.” This scam trades on the misrepresentation made to many timeshare owners — by developers — that their timeshare is “an investment” that they can later sell on a resale market to any one of many willing buyers.
A sad fact of timeshare ownership, though, is that the vast majority of timeshares simply can’t be sold because no one wants to buy them. If you bought your timeshare thinking that you could later sell it for a hefty profit, the initial promise may have already cost you, and this type of scam only adds to it.
The resale company scam begins when you’re contacted, usually via unsolicited phone call, text message, or social media, by a company claiming they already have a buyer lined up. According to information on FBI.gov, these high-pressure calls pressure owners to pay upfront fees — purportedly for taxes and escrow costs — and once they’re paid, the company disappears, leaving timeshare owners several thousand dollars poorer.
If you get one of these phone calls, it’s important that you do not pay any money and that you contact law enforcement or your state attorney general’s office right away.
“Stop Payment” Scams
Unlike the resale scheme discussed above, “stop payment” scams are much, much slower. These scams come from timeshare exit companies that might not raise any red flags on paper, but can be just as destructive to the finances, credit scores, and legal well-being of timeshare owners.
The “stop payment” in question refers to advice that a timeshare owner should just stop paying any amount related to the timeshare, whether that be annual maintenance fees, assessments, or even a mortgage. The thinking is that if the developer sees they can’t make money off of you, they’ll be more likely to let you out of your contract. This thought, though, is completely incorrect.
Failing to pay money that you owe under a timeshare agreement will, at the very least, be reported to the credit bureaus and lower your credit score for years to come. Furthermore, timeshare companies can start foreclosure proceedings against you. Though the timeshare resort taking away your unit might seem appealing at first, keep in mind that in most cases, they can then come after you for unpaid balances, even suing you in court for a deficiency judgment, which they can enforce by seizing assets or even garnishing your paycheck.
Considering how financially and legally dangerous this route is, it would be terrible advice even if it were free. Paying a timeshare exit company for it, though, just adds insult to injury. Never take the “stop payment” advice, period.
“100% Money Back” Scams
Any timeshare exit company, lawyer, or realtor who tells you that they can get you back all the money that you paid for your timeshare is most likely trying to scam you. As mentioned above, selling a timeshare is nearly impossible. While you might be able to bring a legal action to cancel a timeshare contract if you were a victim of fraud by sales staff, that cancellation will certainly not be free, as attorney fees can cost tens of thousands of dollars.
The only way that “you can get 100% of your money back” is not a scam is if you cancel your timeshare contract within the rescission period set by your state’s law. The time to do that, though, is very short — usually only a couple of weeks at most, and sometimes only a matter of days.
A good timeshare exit specialist will work hard and be knowledgeable, but they will not over-promise. Remember: if it sounds too good to be true, it probably is.
Why “Upfront Fee” Does Not Always Mean “Scam”
While many timeshare exit scams, especially resale scams, involve paying upfront fees, that doesn’t mean that every firm asking for an upfront fee is trying to scam you. Remember that these companies are businesses, and they have to manage their overhead, employees, and resources, which often requires clients to pay an upfront fee.
Rather than simply avoiding all upfront fees altogether, you should put anyone who holds themselves out as a timeshare exit specialist to the test. Ask them exactly what they’ll use the money for, and what the expected timeline is. A good specialist should expect and welcome such questions. If they tell you they need money for real estate taxes or escrow fees, that is a huge red flag you can’t ignore.
Given the financial pain that timeshares cost, it can feel unfair to have to pay more just to get rid of them. A good specialist, though, can answer all your questions and help you ultimately eliminate your timeshare-related expenses from your life.
A Growing Problem: Incompetent Exit Companies Without an Exit Process
Even if you determine that a timeshare exit company or specialist isn’t a bad actor, there can still be problems you need to avoid. One of the more common problems is an inexperienced company or specialist.
Because most state governments don’t regulate timeshare exit companies, you can get a wide variety of experiences. While there are companies like Centerstone Group with decades under their belts, others may have only gone into business last month.
These inexperienced companies might mean well, but their naivete can cost you. For instance, there are “timeshare exit companies” that don’t actually do anything but refer you to a timeshare law firm.
This can be a costly mistake that may not lead to an exit, as lawyers are not the appropriate solution in every case. What they will be in every case is expensive. Add that extra cost to what you paid the exit company, and you might just end up wondering where all your money went.
A timeshare company that doesn’t have a plan for the future is not only wasting your money but also your time. Because you are constantly paying more fees, assessments, and other costs, that time ends up costing you even more money!
It’s crucial, then, to ask about the exit process before you pay a fee. Any good timeshare exit specialist should be more than capable of giving you detailed answers about the specific processes that they will use in your case. If they can’t do that, you should move on.
Centerstone Group Can Show You a Better Way
There are no substitutes for experience or quality. Centerstone Group has the resources and tenacity to get you out of your timeshare in a legal, ethical, and efficient way. Thousands of timeshare owners — many of whom have been victims of other timeshare exit scams — have come to us and achieved freedom from their contracts.
It’s important to remember, though, not to take our word for it. Centerstone Group is an accredited, A+-rated company with the Better Business Bureau (BBB), with hundreds of reviews from satisfied clients, who have awarded us a 4.79-star rating.
We welcome thorough questioning from anyone who might be a client, and we are confident that, once we have explained our processes and fees, you’ll feel that you are leaving your timeshare exit in good hands. If you’re lost in a sea of questions and need to know more about how to avoid timeshare exit scams, contact us today for a free consultation to determine which of our exit programs might be right for you.
If vacation ownership were as great as sales presentations make it seem, there’d likely be far fewer timeshare owners looking for an exit strategy. Yet, every year sees a mass attempted exodus from timeshare companies — people looking to get out of their contracts and stop bleeding money. Sadly, this creates a world full of bad actors looking to take advantage of unhappy owners with a variety of timeshare exit scams.
The timeshare scams in question are as varied as the companies that run them. Some brazenly promise things they can’t deliver, take your money, and run. Some string you along with vague promises of an exit, only to abandon you midway through the process, leaving you with your timeshare contract intact but with less money in the bank.
Centerstone Group’s team of professionals has decades of experience in the timeshare industry, and we’ve helped thousands of clients get themselves out of bad situations. This article will explore some of the more common timeshare exit scams and the red flags that herald them.
We’ll also arm you with knowledge, giving you the questions and confidence to stop a bad idea in its tracks before it costs you more money and peace of mind.
What Are Common Timeshare Exit Scams I Should Watch Out For?
Once you start researching timeshare cancellation and other methods of exiting a purchase agreement, you might notice some red flags keep popping up. While we can’t tell you every single timeshare exit scam out there, most fall into a few different types. Once you understand those, the problem of how to avoid timeshare exit scams becomes much easier to solve.
Timeshare Resale Company/Fake Buyer Scams
A common timeshare exit scam is the “fake buyer” scam perpetrated by the so-called “timeshare resale companies.” This scam trades on the misrepresentation made to many timeshare owners — by developers — that their timeshare is “an investment” that they can later sell on a resale market to any one of many willing buyers.
A sad fact of timeshare ownership, though, is that the vast majority of timeshares simply can’t be sold because no one wants to buy them. If you bought your timeshare thinking that you could later sell it for a hefty profit, the initial promise may have already cost you, and this type of scam only adds to it.
The resale company scam begins when you’re contacted, usually via unsolicited phone call, text message, or social media, by a company claiming they already have a buyer lined up. According to information on FBI.gov, these high-pressure calls pressure owners to pay upfront fees — purportedly for taxes and escrow costs — and once they’re paid, the company disappears, leaving timeshare owners several thousand dollars poorer.
If you get one of these phone calls, it’s important that you do not pay any money and that you contact law enforcement or your state attorney general’s office right away.
“Stop Payment” Scams
Unlike the resale scheme discussed above, “stop payment” scams are much, much slower. These scams come from timeshare exit companies that might not raise any red flags on paper, but can be just as destructive to the finances, credit scores, and legal well-being of timeshare owners.
The “stop payment” in question refers to advice that a timeshare owner should just stop paying any amount related to the timeshare, whether that be annual maintenance fees, assessments, or even a mortgage. The thinking is that if the developer sees they can’t make money off of you, they’ll be more likely to let you out of your contract. This thought, though, is completely incorrect.
Failing to pay money that you owe under a timeshare agreement will, at the very least, be reported to the credit bureaus and lower your credit score for years to come. Furthermore, timeshare companies can start foreclosure proceedings against you.
Though the timeshare resort taking away your unit might seem appealing at first, keep in mind that in most cases, they can then come after you for unpaid balances, even suing you in court for a deficiency judgment, which they can enforce by seizing assets or even garnishing your paycheck.
Considering how financially and legally dangerous this route is, it would be terrible advice even if it were free. Paying a timeshare exit company for it, though, just adds insult to injury. Never take the “stop payment” advice, period.
“100% Money Back” Scams
Any timeshare exit company, lawyer, or realtor who tells you that they can get you back all the money that you paid for your timeshare is most likely trying to scam you. As mentioned above, selling a timeshare is nearly impossible. While you might be able to bring a legal action to cancel a timeshare contract if you were a victim of fraud by sales staff, that cancellation will certainly not be free, as attorney fees can cost tens of thousands of dollars.
The only way that “you can get 100% of your money back” is not a scam is if you cancel your timeshare contract within the rescission period set by your state’s law. The time to do that, though, is very short — usually only a couple of weeks at most, and sometimes only a matter of days.
A good timeshare exit specialist will work hard and be knowledgeable, but they will not over-promise. Remember: if it sounds too good to be true, it probably is.
Why “Upfront Fee” Does Not Always Mean “Scam”
Rather than simply avoiding all upfront fees altogether, you should put anyone who holds themselves out as a timeshare exit specialist to the test. Ask them exactly what they’ll use the money for, and what the expected timeline is. A good specialist should expect and welcome such questions. If they tell you they need money for real estate taxes or escrow fees, that is a huge red flag you can’t ignore.
Given the financial pain that timeshares cost, it can feel unfair to have to pay more just to get rid of them. A good specialist, though, can answer all your questions and help you ultimately eliminate your timeshare-related expenses from your life.
A Growing Problem: Incompetent Exit Companies Without an Exit Process
Even if you determine that a timeshare exit company or specialist isn’t a bad actor, there can still be problems you need to avoid. One of the more common problems is an inexperienced company or specialist.
Because most state governments don’t regulate timeshare exit companies, you can get a wide variety of experiences. While there are companies like Centerstone Group with decades under their belts, others may have only gone into business last month.
These inexperienced companies might mean well, but their naivete can cost you. For instance, there are “timeshare exit companies” that don’t actually do anything but refer you to a timeshare law firm.
This can be a costly mistake that may not lead to an exit, as lawyers are not the appropriate solution in every case. What they will be in every case is expensive. Add that extra cost to what you paid the exit company, and you might just end up wondering where all your money went.
A timeshare company that doesn’t have a plan for the future is not only wasting your money but also your time. Because you are constantly paying more fees, assessments, and other costs, that time ends up costing you even more money!
It’s crucial, then, to ask about the exit process before you pay a fee. Any good timeshare exit specialist should be more than capable of giving you detailed answers about the specific processes that they will use in your case. If they can’t do that, you should move on.
Centerstone Group Can Show You a Better Way
There are no substitutes for experience or quality. Centerstone Group has the resources and tenacity to get you out of your timeshare in a legal, ethical, and efficient way. Thousands of timeshare owners — many of whom have been victims of other timeshare exit scams — have come to us and achieved freedom from their contracts.
It’s important to remember, though, not to take our word for it. Centerstone Group is an accredited, A+-rated company with the Better Business Bureau (BBB), with hundreds of reviews from satisfied clients, who have awarded us a 4.79-star rating.
We welcome thorough questioning from anyone who might be a client, and we are confident that, once we have explained our processes and fees, you’ll feel that you are leaving your timeshare exit in good hands. If you’re lost in a sea of questions and need to know more about how to avoid timeshare exit scams, contact us today for a free consultation to determine which of our exit programs might be right for you.