Is Foreclosure An Option For Timeshare Owners?
Timeshare Agreements, Timeshare Scams
3 min read
Most Americans have heard about a friend or a family member who was scammed or otherwise taken advantage of by a timeshare company.
There are thousands of stories of unscrupulous salespeople who promise the world, and customers with manipulated emotions who buy something thinking it’s one thing only to find out it’s another.
Whether it’s someone you know or it’s you, knowing you’ve been scammed, or a victim of fraud is a horrible experience.
It’s surprising how common timeshare fraud is, and that the entire timeshare industry has a reputation associated with bad sales practices, poor customer service, and outright scams.
People often question why the government doesn’t do something to stop timeshare fraud. However, doing a bit of research reveals that the U.S.
Government is quite active in combatting timeshare fraud. What we’re dealing with is a problem of scale and limited government resources.
Authorities have shut down hundreds of timeshare companies and affiliated agencies over the years.
These companies are deemed as predatory and have scammed unwitting customers out of millions of dollars.
The challenge with timeshare fraud is that, not only do you have dishonest sales practices from timeshare companies, but you also have massive fraud that occurs in the resale market, companies that tell you they can get you a lot of money for your timeshare, and other agencies that offer to get you out of an onerous contract.
Fighting timeshare fraud is best done with a multi-pronged approach.
In addition to government efforts to spot and root out scams, consumers and timeshare owners should arm themselves with information about common scams and what can be done to avoid them.
As recently as September 2020, the United States Securities and Exchange Commission, the regulatory body charged with protecting investors, issued a warning to consumers about timeshare fraud.
In the warning, they mentioned a common scam that involves people phoning timeshare owners and fraudulently identifying themselves as a representative of a travel agency, title company, or brokerage firm.
These people tell you that, as an owner of a specific timeshare, you are entitled to a certain amount of stock.
They will tell you that to access the shares, you will need to transfer the title of your timeshare or pay some form of tax or fee.
The SEC warns that some of these companies or agencies will look extremely legitimate.
They build high-quality websites that mimic actual business websites and use false names on what appear to be real documents.
This is just the latest in a long string of actions taken by the government.
However, as mentioned previously, the size of the timeshare market and the scale at which small criminal or dishonest organizations can operate make it a difficult task.
In general, the government tells timeshare owners and other consumers to be highly suspicious of any unsolicited offers or anything that sounds too good to be true.
To ensure against fraud, run any offers by your timeshare company, manager, or developer before you engage.
It’s likely they will know about the scam and can steer you away from any fraudulent offers. Never pay money upfront in response to a promise of future payments or some reward that you are entitled to.
It can be very hard to recover any money sent to a company, especially because many of them operate overseas where the United States has a diminished legal authority to recoup money involved in timeshare fraud.
Too often, timeshare owners make the mistake of thinking their timeshare is a lucrative financial asset that will generate income or meaningfully appreciate.
While this does happen, it is rarer than most people think. Some owners who may have open dates or are thinking of swapping with another owner on an exchange are particularly susceptible to fraud.
One common method of timeshare fraud involves exchange companies that make false promises.
They generally make outbound cold calls to owners telling them that they have buyers or other owners looking for swaps lined up ready to pay.
They say that, in exchange for a registration fee, they can guarantee certain results that ultimately end up not happening.
These false claims are an explicit form of timeshare fraud that costs owners a lot of money each year.
Resale scams are so common because it’s relatively easy to set up a small timeshare exchange.
These operators know that, because their company is so small, they will likely evade government oversight.
There are bigger fish to fry, as they say. Because the government has limited resources to monitor these types of activities, these agencies can operate with relative impunity.
They will say whatever it takes on the call to get well-meaning timeshare owners to pay registration fees and sign up on the exchange.
What they find, however, is much different than what was promised over the phone.
The U.S. government has been successful in shutting down many of these agencies.
However, by the time they get there, most of the money is gone and they are generally only able to recoup a fraction of what was paid.
The refund scam is particularly heinous because it takes advantage of people who have already victims of fraud.
Bad actors know that someone who paid out fees or made an investment in some sort of scam in the past is likely to do it again.
In the refund scam, agents call timeshare owners promising to, for a fee, of course, work to recoup any money that was lost in a fraudulent scheme.
They’ll tell you that you are eligible to join a class action suit or that they are part of a government effort to investigate fraud.
If you’ve been a victim of timeshare fraud, be wary of anyone reaching out to you with promises of compensation.
This rarely happens. You’ll be better served by finding a legitimate company and contacting them directly.
Generally speaking, the best way to avoid timeshare fraud is by never engaging with cold callers and never respond to email offers, warnings of penalties, and other correspondence.
When in doubt, you can always hang up the phone and call your timeshare provider to verify whether what the person who called you was saying is true or not.
Never Pay Up Front Fees:
Some legitimate businesses require registration fees and other costs. However, you should be very cautious of any scheme that asks for your money on an initial call. Don’t pay.
Instead, look online or call your timeshare company to determine whether it’s real.
Use Your Credit Card:
Even if you’ve done the research and feel that the payment you’re making is legit, you should always use your credit card as an added layer of protection.
Credit card companies have fraud protection built into their payment systems, so you increase the chances of recouping any lost money.
Stick to the Big Players:
When in doubt, go with the trusted agencies and companies that have established track records.
Look online for companies with good reviews that have been in business for years. You are much less likely to encounter timeshare fraud.
Don’t Listen to Offers While You’re on Vacation:
People are in better moods, and more likely to say “yes” to offers when they’re on vacation.
If you’re at a resort and someone approaches you about an amazing offer that just can’t wait, tell them to get lost.
It’s worth your time to spend a few hours researching the company and determining whether a purchase is right for you when you’re not in an easily manipulated emotional state.
Avoid Cold Calls:
We’ve already touched on this, but it’s worth stating again. There are no offers that are too good to be true, and anyone who spends the time to cold call you at your home or your office is doing so because there is a fat commission to be made if they get you to pay or sign up for something.
Even if you listen to a pitch on a cold call, hang up the phone, wait a few days, do some research online, and then reach out to the company yourself. It will dramatically lower your chances of being scammed.
Finally, if you do come across any form of timeshare fraud, help the government out by reporting what happened.
With their limited resources, the U.S. Government has little chance of stopping timeshare fraud before it affects many people.
They typically only respond once a scam has impacted a lot of folks. You can help them get ahead of the game by alerting the appropriate authorities once someone has contacted you.
They’ll be able to assess your report and get started on oversight faster than otherwise. This way you can help other people avoid fraudulent schemes and potentially save them thousands of dollars.
How to choose the right company to get me out of my timeshare
We know how stressful timeshare contracts can be. What once sounded like a dream resort package turned into a nightmare. When you don’t know where to turn, look to PMG to relieve you of your timeshare burden. We pride ourselves on open, honest, and frequent communication with our clients.
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The timeshare industry has spent a tremendous amount of time and money to delay, confuse and deter you from canceling your timeshare contract. Your team of timeshare elimination experts act as your consumer advocate and will work tirelessly to free you from your timeshare contract, mortgage, and maintenance fee bill.Give it a try