Over 8 million Americans own a timeshare. Usually, owners look to sell when they are in financial hardship and can’t afford to keep up with this luxury.
Those who decide they want to sell their timeshare often find it harder to sell than it was to purchase.
Scammers take advantage of them wanting out of their timeshare quickly by offering empty promises that ultimately leave owners worse off.
Unfortunately, it can be challenging to determine who is trustworthy and who isn’t.
Common Scams Used to Target Owners
Protecting yourself from scam timeshare companies is essential when looking for a way to get out of your timeshare. Some companies will offer empty promises that can lead owners to lose thousands of dollars.
Unsolicited callers, fake resale agents, and timeshare contract cancellation are a few scams to watch out for.
Keep these common timeshare resale scams in your mind before entrusting your ownership to anyone.
1) Unsolicited Callers Asking For Upfront Fees
One of the most prevalent resale scams is unexpected calls from a company claiming to have a legitimate buyer for your timeshare.
This person might say they have a buyer waiting but need funds to close the sale.
In this case, they may ask for transfer fees, taxes, international transaction fees, or other fictitious explanations.
ARDA and the BBB identify that the biggest red flag in dealing with third-party companies who want to sell or help exit your timeshare is paying exorbitant upfront fees.
Unsolicited calls are immediately a red flag because no legitimate timeshare company will ever call you “out of the blue.”
It is illegal to reach out to you unsolicited. In other words, unless you have permitted a resale company to contact you, they can’t.
Generally, as a seller, you should not have to pay closing costs unless otherwise negotiated, and definitely not before signing any contracts.
Buyers typically pay transfer fees and commissions, not owners selling their timeshare. If someone asks you for high up-front fees or personal information, they are probably not a legitimate timeshare buyer.
2) Fake Timeshare Resale Agents
In today’s world, timeshare scams are getting harder to catch.
Scammers have also manipulated the phone number that shows up on caller ID. First, they will use area codes of credible timeshare resale companies and pretend to be a “representative.”
Then, they call timeshare sellers and claim that they have a buyer interested and require funds upfront to close. They might even give you fake email addresses that include names of credible timeshare resale companies.
This timeshare scam is harder to avoid, but there are ways to proceed cautiously.
Never pay up-front closing costs or “luxury taxes.” As a general rule, never give out personal information when someone calls unsolicited. For example, your credit card, social security number, or bank account.
First, do your research to ensure the company is legitimate and that this person works there. Then, if and when you have determined the person is legitimate, you can call them back.
If anyone contacts you unsolicited claiming to be with a well-known timeshare company, reach out to the company directly and let them know of this offense.
3) Timeshare Contract Cancellation or Timeshare Exit Lawyers
Companies offering timeshare contract cancellations or timeshare exit lawyers are also scams.
These con artists make promises to “get you out,” “cancel your mortgage,” or “exit your timeshare” with a 100% money-back guarantee.
Some are even backed by celebrities who most likely never owned a timeshare of their own. They often prey on people who regret their timeshare purchase or are in financial hardship.
Timeshare exit lawyers will say there is no resale market and offer their “services” for thousands of dollars. In addition, they will tell you to stop paying your timeshare mortgage and maintenance fees during the “exit” process.
Many owners have fallen victim to this scam because they tell them they have a money-back guarantee if the service fails.
However, these companies’ contracts string owners along for years, claiming that the exit process can be lengthy, but they only hurt the owners more than help them.
4) “Stop Paying Your Timeshare Maintenance Fees”
Do not just stop paying your timeshare maintenance fees.
Anyone who tells you to do that is not looking out for you in the long run.
If you decide you no longer want your timeshare, this is not the way to go. The problem with this is it will cause your ownership to default.
Then, it will lead to you hurting your credit, which stays on your credit report for many years. This could lead to repercussions when you next want to buy a house, car, or other expenses.
Final Word: How to Safely Get Out of a Timeshare and Avoid Scams
The best way to avoid scams if you are trying to sell your timeshare is to contact your resort or developer first.
Most developers have in-house programs to refer owners to trustworthy resale companies, and some may even offer to take back the ownership from qualifying owners.
Owners should only use companies that are members of ARDA, the Coalition for Responsible Exit, or at least use companies that the BBB accredits.
ARDA Members must follow a strict Code of Ethics, which protects timeshare owners. In addition, many are also a part of the Coalition for Responsible Exit, which advocates for protecting owners from unscrupulous companies.
Disclosure: The author is not a licensed or registered investment adviser or broker/dealer. They are not providing you with individual investment advice. Please consult with a licensed investment professional before you invest your money.
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Tim Thomas has investments in real estate.
This article was produced by Timeshares Only and syndicated by Wealth of Geeks and republished with permission by Tim Thomas / Timothy Thomas Limited.
Image Credit: Unsplash.