How to Recognize the Many Faces of Timeshare Fraud

Timeshare fraud: woman holding a document while doubting the man who's talking to her

Many types of companies regularly show up on fraud reports. Debt collectors, bad investments, and phony cash prize scams have been around for decades. Another industry that often shows up in annual fraud statistics is timeshares


According to the Federal Trade Commission’s recent statistics for 2021, timeshares ranked ninth for fraud claims across the nation. In that year, there were over 50,000 reports of timeshare fraud and a collective $95 million in losses from that fraud. (In 2020, losses were even higher — over $175 million from over 70,000 incidents.)


Keep in mind that these are only the reported timeshare fraud cases. When you think about unreported cases and those from across the globe, the full scale of timeshare fraud is virtually unknowable.


Whether the threat is coming from an overzealous vacation club salesperson, a fly-by-night timeshare resale company, or a company you’ve already signed a contract with, the best defense against timeshare fraud is knowledge. 


To that end, this article will discuss some of the types of timeshare fraud you might be likely to encounter from various companies and people. And, if you find yourself up against a wall in your current timeshare contract, we’ll talk about how Centerstone Group can help you fight back against unfair and fraudulent behavior. 


Dishonest Sales: Timeshare Fraud That Tricks You Into Signing and Keeping a Contract

Timeshare fraud: employee using a magnifying glass to read a document

Looking back, many owners say that salespeople and their high-pressure timeshare sales presentations either distorted the facts or told outright lies about timeshare products. 


They may have stated that annual maintenance fees were capped or would not rise by the maximum amount every year (which they almost always do). Other times, salespeople might say that reserving time at a resort is easy. Owners later find out that it is impossible to use their timeshare when they have vacation time.


Salespeople often also misrepresent that a timeshare is a real estate investment and that owners can make money off of their units by selling or renting them. History has shown that, time and again, this is simply untrue in virtually all cases.


Those examples, where owners are tricked into signing a contract because of lies that a salesperson told, are something that lawyers call fraud in the inducement. It’s a frequently reported problem that has led to some regrettable timeshare purchases and is a big cause for owners seeking to exit their timeshares.


But those aren’t the only kinds of lies that timeshare companies tell. The misrepresentations don’t stop when you sign on the dotted line. 


Faced with state laws that allow owners to rescind their contracts within a set amount of time (usually five or 10 days), timeshare companies often intentionally make it difficult to cancel or even lie about the fact that they received a rescission letter on time.


Being a victim of timeshare fraud doesn’t mean you’re silly or naive. The fact is that timeshare sellers have been doing this for a very long time and will always have the advantage over even the savviest consumers. The best way to fight these tactics is to learn about them and ally yourself with people experienced in fighting them.


Resale Company Scammers: Timeshare Fraud Targeting Owners Desperate to Sell Timeshares

Federal Trad Commission Building Washington building

Often, the deceptive tactics used by timeshare sellers and resorts get owners stuck in a vicious cycle of paying ever-increasing fees, not being able to use their timeshares, and failing to find a way out. That problem can then lead to owners falling victim to a different kind of timeshare fraud: the timeshare resale scam.


These timeshare resale companies target timeshare owners with phone calls or e-mails that are littered with red flags. First and foremost, you’ll often find that these people are not licensed realtors or real estate agents.


These resellers claim that they can sell your timeshare in a very short amount of time — sometimes as little as 30 days — and may even say that they have a buyer lined up to do so. All they need, they’ll say, is an upfront fee payment by you of several thousand dollars for closing costs. Just make the wire transfer, they say, and they’ll take care of the rest.


What many owners might not know (often due to the misrepresentations of timeshare salespeople) is that their timeshares simply aren’t that valuable. In almost every case, there is no resale market for a timeshare, and it is virtually worthless. Timeshare resale companies know this, and they try to part you from a few thousand dollars by offering you false hope.


Once they have your money, they disappear almost as quickly as they appeared. Your timeshare isn’t sold, and you have lost thousands of dollars. 


This problem has gotten the attention of federal and state governments. State attorney general offices and consumer protection agencies have advised consumers about the problem, and the FTC is actively investigating these fraud claims as well. 


The bottom line when it comes to selling your timeshare is this: If it sounds too good to be true, it’s likely a scam. Any reputable and experienced timeshare exit specialist will tell you that getting rid of a timeshare in a short timeframe, and turning a profit doing it, is virtually impossible in any situation.


Metafraud: Scams About Timeshare Fraud Lawsuits

Person filling-out a LAWSUIT form

The longer fraud exists in any industry, the more sophisticated it gets. In the case of timeshares, this means that there is now fraud regarding lawsuits about timeshare fraud. In other words, scammers are now fabricating lawsuits about timeshare fraud and using those lies to perpetuate more fraud against owners.


The U.S. Department of Treasury, for example, put out a fraud alert about a letter sent to several people claiming that they were owed money from a criminal case against some timeshare companies. The notice and documents behind it were fraudulent, and the Department of Treasury instructed consumers who received the documents to not respond and contact the Department at once.


As more lawsuits involving timeshare companies, resellers, and exit companies come into the public eye, you can expect this kind of timeshare “metafraud” to become even more popular. 


Thus, it’s even more important to make sure that your information about timeshares and timeshare exits comes from established, trusted professionals in the timeshare industry. And, if you receive anything, like these notices, that looks suspicious, it may also be a good idea to contact law enforcement to make sure that you’re not being scammed.


Having Problems With Your Timeshare Company? Centerstone Group Can Help

Centerstone Group is a family-owned business staffed by people with decades of experience in the timeshare industry. We know how it works and how timeshare developers think. More importantly, we stay up-to-date on the latest trends in timeshare fraud, both by timeshare companies and other bad actors. We know how to spot them and keep our clients safe.


Centerstone Group is a leader in the field of legal, ethical timeshare exits using a variety of strategies. Whether you need a contractual rescission, one of our proprietary pressure campaigns, or legal help, we can make sure that you get the services and information you need to exit your timeshare and stop the destruction of your finances.

We are an A+-rated company with the Better Business Bureau (BBB), and we also have dozens of reviews from satisfied customers that attest to our abilities and experience. If you are stuck in a timeshare, please talk to us before you make a decision that could hurt your finances even more. Contact us today for a free consultation and case evaluation.


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