Timeshares can be a great way to get the benefits of ownership without actually owning. They are an affordable alternative for those who can’t buy their own vacation home on the coast of Florida. Sadly, there have been many cases of fraudulent companies engaging in timeshare scams with unsuspecting customers.
Timeshare scammers “sell” what they claim are legitimate timeshares that turn out to be bogus sales pitches for vacation home rentals that never materialize. In this guide by Anti Fraud News, learn more about timeshare scams, so you don’t fall prey and lose your money.
What is a Timeshare?
A timeshare is a property that companies use to get people interested in buying vacation homes. In this type of transaction, you rent the unit from the company and get access during certain time periods. If there are multiple owners, all have equal shares or rights within the timeshare community. In 2019, timeshare sales went up 7% to $12.5 billion with its 10th straight year of growth. Clearly, timeshare ownership is on the rise.
Not all timeshares are created equal. Here are the four main types of timeshare properties:
- Public: These tend to be independent resorts where anyone can stay for a fee.
- Public-Private partnerships: This model involves private ownership with limited public usage.
- Private Resorts/Associations: Ownership is often vested among members who want total control over their properties
- Condominiums: Commonly found at major tourist destinations such as Orlando, Florida because it has its own set of rules and regulations which dictate how the timeshare is used.
How to Know Your Timeshare is Legitimate
If you are interested in a timeshare but are concerned about whether a timeshare company is legitimate, here are some ways to ensure you aren’t getting scammed.
They Provide References
Ask the timeshare company for a list of references from past buyers who have purchased timeshares through the company. This will give you an idea of their reputation. You can also check with your Better Business Bureau for any complaints they may have received against the company. If they cannot provide this, shop elsewhere!
They Offer a Trial Period
A real timeshare company will provide you with an actual trial period where you’re allowed to use the property before making any final decisions. This is common practice with legitimate timeshare companies. If the company isn’t willing to allow you this opportunity, move on.
They’re Upfront About Fees and Charges
Charges are disclosed upfront by honest businesses who aren’t trying to scam anyone out of anything. A reputable timeshare company will make all of their policies clear before you buy into them while disreputable ones may not include certain costs until after they’ve gained your trust.
They Allow for Flexible Payments
While there may be some fees involved in closing on your new timeshare or down payment amounts required up front, legitimate companies should allow flexible payments so that customers aren’t forced into paying their full balance upfront.
They Offer a Reasonable Rate
If the timeshare company is offering you a really great rate that seems “too good to be true,” it’s probably because there are scamming companies who will try and offer unreasonably low prices so they can meet this lower price point after charging hidden fees which inflate your final costs, resulting in loss of money for the customer. The right kind of timeshare company should always give reasonable rates that don’t break your bank account or put you into financial hardship just to buy into their program!
They Have a Physical Location
If you are shopping for a timeshare online, make sure the company has a physical location. If no office address has been provided but only an email account and/or phone number, then you should be suspicious that the scammer might be operating from another country where authorities would find it difficult to prosecute them. This means there is little chance any money lost can be recovered later on down the road. Fraudulent companies are well known to be virtual only, so they can disappear after scamming you out of your money.
They Put Everything in Writing
Make sure you get everything down on paper before making a payment or depositing money into their account! Timeshare scams usually involve verbal agreements which do not hold up if brought before court later on down the road. It’s always wise (and safer) to go ahead and put things in writing.
Red Flags to Look for in a Timeshare Scam
There are several red flags to look for when trying to determine whether or not the timeshare scam you’re looking at is legitimate. Here are some of the most common warning signs for timeshare scams:
If a timeshare company is offering free promotions, it probably isn’t legit. Free promotions usually involve renting your unit out at very short notice and for a limited time only. The scam artist will make their money not from selling units but by making a profit on these rentals instead.
“No Obligation” Offers
These “no-obligation offers” tend to be accompanied by high-pressure sales tactics that pressure customers into buying without giving them enough time to think things over or research what they’re signing up for fully. In fact, if you ask questions asking about certain fees or costs associated with this offer, don’t expect an honest answer!
Unprofessional Email or Website
If an email address from the timeshare seller sounds fake (e.g., no-reply@timesharetoolkitonline), that is a red flag you could be communicating with a scammer. Additionally, if the timeshare website looks unprofessional or has spelling and/or grammar errors, then it is likely a scam as well.
No Company Name
A timeshare scam will not give you the name of their company until after they have your money! If this happens to you, run away immediately – there should be no reason for them not wanting to disclose who they are upfront.
No Customer Service
Any company that is scamming you will not have the time or willingness to answer all of your questions, explain how their timeshare works, or provide proof of ownership. So, if they are unwilling to do this for you, then chances are it’s a scam!
Demands for Upfront Payment
Since timeshares are a long-term investment, don’t pay for yours entirely upfront or put down any money before you have seen the property and made sure it is what you want to purchase. While scam companies may ask for full payment upfront, legitimate companies will allow customers to make payments over time according to their budget.
Stay Up-to-Date About the Latest Scams on Anti Fraud News
If you’ve been considering a timeshare purchase, make sure to do your research first. There are many reputable companies out there that offer excellent deals on timeshares, so just make sure to do your due diligence.
Stay informed about the latest scams and how to avoid them by following our Anti Fraud News blog. We hope this guide has helped you learn a thing or two about timeshare scams, and we wish you safe travels in your search for the perfect timeshare!