Beware of Timeshare Scams
#1: Timeshare Resale Scams
They will win your confidence by having “way too much information” about your timeshare, which somehow people discern makes them believable and trustworthy because they think, ‘How else could they know so much about me and my timeshare?’
The truth is that deeded properties are listed in public records that anyone can access. Armed with lots of details about your ownership, they win your trust and convince you to wire them money so they can “facilitate” the sale of your property to their eager buyers.
Timeshare scam companies are not licensed or certified property brokers or real estate agents. They likely don’t know a thing about real estate or timeshares other than what is written in their pitch script. They may promise you that for a fee of however many hundreds or thousands of dollars, they will either list your timeshare for sale on some overpriced website that will yield no results, or that they need the money to cover costs of a title search, closing costs and “finder’s fee.”
Timeshare scam callers put pressure on their victims by telling them that the buyer is “on another line” or in the office…awaiting their response. Of course, this is a total lie as there is no buyer to begin with.
Timeshare Buying Scams – How It’s Done
Timeshare Resale Scam Fees
- Timeshare Title Search Scam: In this situation, the fraudster informs the proprietor he needs to pay an upfront fee for the title search on the property.
- Timeshare Appraisal Scam: Before the purchaser’s financing can be approved, timeshare owners are informed they should spend for an assessment of the residential property. Of course, because timeshares are a type of deeded real estate, appraisals could only be performed by licensed property appraisers. Timeshare scam artists of this type will take the appraisal fee and likely disappear, or ask for additional fees before ceasing to return your calls or shutting down their operations.
- Closing Cost Scam: Often timeshare buyer scams pre-paid costs as are presented as the closing costs necessary to close the deal. What the scammer falls short to inform you is that there will certainly never ever be any closing and you will not only get no money for your timeshare, you’ll be stuck with it forever.
If you paid by wire transfer, check or bank draft you have absolutely no chance of ever seeing those “upfront fees” again. If you were able to pay by credit card, there is a chance that you could do a chargeback, but few of these scammers will allow you to pay by credit card for this very reason.
#2: Bogus Timeshare Rental Offers
Be hesitant of solicitations that claim the company can rent your vacation weeks or your extra/bonus points, however require payment for their services in advance.
The timeshare rental scam company will commonly assert that they can rent your timeshare for a huge amount, for instance, at a time when there is a popular event in the city where the timeshare is located. The timeshare rental scam company will ask for an upfront “finder’s fee” or rental agent fee prior to the actual transaction between renter and timeshare owner takes place. This, of course, is silly since such a fee is normally taken from the renter’s payment at the time the rental agreement is made.
#3: Timeshare Donation Scam
During the seminar, the timeshare “expert” will remind the timeshare owners of the reasons they don’t want to own the timeshare any longer, just how impossible they are to sell on the open market, and ultimately will expose the business’s strategy to aid the owner do away with the timeshare at last by means of timeshare donation.
The scam requires the timeshare owner to pay the donation business a charge of as much as $5,000 or even more to facilitate the transaction of donating a timeshare to a “charity” that the company is associated with. Then, the donation company will supply the owner with a “property appraisal” in the amount of 80% of its initial worth. The timeshare owner is instructed that the appraisal can be utilized to declare a philanthropic deduction on their yearly tax returns.
As an example, a timeshare owner initially paid $35,000 for their timeshare. For the $5,000 cost, the timeshare donation company will make a transfer of the timeshare ownership to a charity and also give the timeshare owner a fake “appraisal” which explains that the present value of the timeshare is $30,000.
When the timeshare owner does as instructed and claims the inflated timeshare value as a donation, fishing for a large tax deduction, he or she is committing fraud against the IRS and could trigger an audit. As a result, large fines could be levied against the timeshare owner.
The charity won’t keep a timeshare for exactly the same reasons the original timeshare owner gave it up for donation: high fees associated with ownership. The charitable organization may even obtain a percentage for their involvement in the timeshare donation scam.
The charity is legally required to submit a record with the IRS on the true amount they get when they sell your timeshare forward. When the IRS’s automated auditing system spots the disparity between the amount claimed as your tax deduction, and also the sale price the charity in fact got when they resold the timeshare, an audit is set off.
In one more situation, the donation business never acts the timeshare to a reputable firm, and rather acts directly into a shell firm that will quickly file for insolvency.
#4: Timeshare Lead Generation Scams
One somewhat less devious (yet still unethical) timeshare scam consists of a company obtaining your information by promising that they will sell your timeshare, then selling that information to other timeshare “resale” companies.
These timeshare scammers sell your info for up to $50 per lead to other timeshare scam artists, assisting in the removal of money from your wallet in your efforts to get out of a timeshare contract.
#5: Timeshare Reloading
The timeshare reloading scammer will promise to help you get your money back, but only after you pay a “recovery” fee. It is hard to believe that people who have already been scammed would fall for this type of further scam, but they evidently find it difficult to believe that someone would purposely further victimize a victim. Of course, there is no limit to the greed and deception these timeshare scam artists are willing to unleash on unsuspecting and desperate timeshare owners.