How to Avoid a Timeshare Scam

Timeshares can offer a great opportunity for a hassle free vacation.

Unfortunately, while the timeshare industry continues to enjoy steady business, the popularity of these arrangements has also opened up the doors for scammers worldwide. Timeshare scams succeed in conning potential owners into investing thousands of dollars into timeshares that often don't live up to their promises, or come with restrictive contracts that make it hard for the timeshare owner to lease or resell the property. Even worse, some timeshare companies disappear with deposit money or suddenly go out of business the day after the ink dries.

Things You'll Need

• Internet Access
• Common Sense
• Lawyer (optional)

Instructions

1. Understand how incentives work. Just about all timeshare opportunities begin with an informative presentation followed by a hard sales push. Since most people wouldn't be keen on such a setup, companies draw in the crowds by offering incentives for attending. This is a typical part of the process.

   If the prize or incentive seems too good to be true, it probably is, so read the fine print and make sure you aren't required to pay anything upfront. Examples of common incentives given by timeshare scammers include: free cars, free boats or all-expense-paid trips to an exotic destination. Regular legit timeshare companies often offer discounted or free hotel stays, small items like digital cameras and cell phones, and gift certificates for services like spa treatments.

2. Avoid making a decision about buying a timeshare or signing any contracts the same day as the presentation. Just as with buying a car, house or other large investment, you'll want to take a day or so to think about it and then come back to the matter with a clear mind.

3. Never allow the salesperson to pressure you into signing anything. If he is overly aggressive and pushy, leave immediately. The same goes for the presentation overall. You are not obligated in any way to the company during the presentation, so if you don't feel comfortable or change your mind, feel free to leave.

4. Do your research on the company and talk to references. Talk to timeshare owners who have had good and bad experiences with the company in question. The Better Business Bureau and your local consumer affairs office are great places to start.

5. Know the difference between deeded timeshares and non-deeded timeshares. Deeded timeshares mean you are buying into actual real estate property. Non-deeded timeshares work like club memberships where you have rights to use the property but do not actually own it.

6. Find out if your timeshare offers flex plans or a points system. Flex plans allow owners to purchase their share during a certain season instead of being locked into a specific week during the year. Points systems allow owners to purchase points to use at different times throughout the year.

7. Make arrangements to visit the actual resort or property, if possible. This is the only way to know exactly what you are paying for. Many scammers get timeshare owners to put down tons of money for a gorgeous property, only to find out it hasn't been built yet or is in a shoddy condition.

8. Take any contract you receive to a lawyer and have her review it to make sure that everything promised to you verbally is included in the contract itself. If any false promises are made or something is missing from the contract, do not sign it.

9. Depending on the state in which the timeshare company is located the contract should offer a "cooling period" cause, which allows you to change your mind after a day or so and get a refund. Check your contract before signing and make sure such a period exists. If it doesn't, ask for one and if they refuse, do not sign the deal.

Tips & Warnings

• Make arrangements to visit the actual resort or property if possible. This is the only way to know exactly what you are paying for. Many scammers get timeshare owners to put down tons of money for a gorgeous property, only to find out it hasn't been built yet or is in a shoddy condition.

• Find out if your timeshare offers flex plans or a points system. Flex plans allow owners to purchase their share during a certain season instead of being locked into a specific week during the year. Points systems allow owners to purchase points to use at different times throughout the year.

• Know the difference between deeded timeshares and non-deeded timeshares. Deeded timeshares mean you are buying into actual real estate property. Non-deeded timeshares work like club memberships where you have rights to use the property but do not actually own it.

• Timeshares are difficult to sell or rent because the supply outweighs the demand. Many timeshare owners sell their property for less than half of what they paid.

• If you want to go to a different location, you have the option of doing a timeshare swap where you trade timeshare property with someone who has the destination you want to go to. If you don't want to arrange the swap yourself, you can use an exchange company who puts your shares into a pool and notifies you when an offer comes through. The exchange company handles the transaction for you.

• Timeshares are difficult to sell or rent because the supply outweighs the demand. Many timeshare owners sell their property for less than half of what they paid.

References

• USA Today; Timeshares: Freebies or Scams?; Ed Perkins