The timeshare industry continues to grow, and so does timeshare fraud. Arm yourself with the tools to avoid it!
With the timeshare industry growing rapidly, it pays to educate yourself on timeshare fraud. Consumers like you need to be aware of what timeshare fraud looks like, how you can avoid it, and what to do if you fall for it.
Sales Presentation Fraud
Timeshare sales reps are well-known for their high-pressure coercive tactics. However, laws do exist to help protect consumers. When reps make false claims or violate the law, their sales tactics turn into timeshare fraud. Laws governing timeshare sales vary from state to state, but we’ll cover some common tactics to watch out for.
Sometimes reps fail to disclose that your “free” gift requires you to listen to a timeshare pitch. Many states including Hawaii require reps to tell you that the incentive has strings attached. But they may also fail to award the incentive even after you listen to their pitch. Sales pitches that last longer than the designated time frame are more often the norm than the exception. Most reps do disclose that you’ll be listening to a pitch, usually for 90 minutes. You should know, they are not allowed to keep you beyond that timeframe, although this rule is often broken.
Reps often make false or misleading statements about the property itself. This type of fraud can be difficult to combat because many timeshare contracts also include a clause saying the buyer did not depend on any verbal statements when deciding to buy. This means that reps can essentially get off the hook, even if they do violate statutes. Protect yourself by getting everything in writing before you sign.
Many consumers are unaware that timeshare contracts come with a cooling off period called a rescission period. And many states require disclosure of the rescission period in the contracts. However, contracts are long and dense so this disclosure is easy to miss, even in the 18-point bold font required by Missouri.
Many resorts are expanding their points programs. The timeshare points model is different from a fixed week or deeded model where you own the rights to a specific property for a specific week each year. Instead, ownership gives you a set number of points each year. You can then use these points in various ways at various locations and times. Many people find it challenging to truly use these points. In most cases, it depends on availability. You often must book months in advance—typically at least 13 hours in advance. Timeshare points can be difficult to manage.
Some resorts allow you to switch from a fixed week to a points-based timeshare. However, some resorts will also pressure you to switch. This might not be a good choice and in any case, you don’t have to switch. According to Timeshare Users Group: “[N]o matter what you are told, you do not have to convert . . . to points under any circumstances. While there may or may not be benefits of doing so, falling prey to hard sales tactics and high-pressure pitches trying to convince you to convert for a hefty fee is never a good idea!”
Timeshare resale fraud is perhaps the most widespread and notorious type of timeshare fraud. Resellers contact current timeshare owners and claim to have a buyer or renter for their timeshare property in exchange for a fee. When the timeshare owner pays the fee, the buyer and the deal disappears then the owner loses their money but they’re still stuck with their timeshare.
Because so many people are desperate to get out of their timeshares, they are easy targets. Scammers love to prey on vulnerable people and perpetrators of timeshare fraud are no exception. The elderly are at great risk of being duped in this type of scam. Many seek to exit their timeshare because their lifestyle no longer accommodates it. Plus, they typically have more savings than others, and that makes them ideal targets.
If you do run into this type of fraud, be very cautious. Watch out for companies who contact you, anyone asking you to pay an upfront fee via wire transfer, money order or pre-paid bank card, and any deals that seem too good to be true. Protect yourself by being skeptical. Check out any company using some of these timeshare resources to help you decide if a company is legit.
If you’ve already been the victim of timeshare fraud, you do have options. Primo works with timeshare owners to help them exit contracts. We’ll be happy to meet with you for a free consultation. Contact us today to get started.
(Image Source: Pixabay)