How to Spot Timeshare Scams

Unfortunately, the word "timeshare" has become synonymous with the word "scam" in many people's minds. Although there are reputable timeshare companies, some timeshare operators aren't on the up-and-up. If you're considering buying a timeshare, make sure to educate yourself properly before you attempt such a purchase.

Instructions

1. Understand what purchasing a timeshare entails. The idea behind a timeshare is that multiple people split the purchase price of a property and they acquire rights to that property certain weeks of the year. Owners must pay annual upkeep fees or homeowner's association fees. To sell a timeshare, owners may have to go through special brokers who can charge higher than normal commission rates, since there are many more people wishing to sell their timeshares than there are buyers.

2. Watch out for high-pressure sales tactics. During a timeshare sales pitch, you may ride in the salesperson's car or on a shuttle to visit the property. It may be "difficult" to get back to your own car or hotel room until you've agreed to purchase a timeshare.

3. Be leery of offers that seem too good to be true. One of the most common timeshare sales practices is to invite people to a presentation and for attending they get a free vacation, cash or attraction tickets. Receiving a two or three nights' stay at a moderate hotel is normal. If the company promises you two weeks at the Ritz-Carlton for attending a presentation, you may question the legitimacy of the offer.

4. Avoid signing anything at the timeshare presentation. Take the timeshare contract with you and have an attorney look it over before you actually buy a timeshare. If the timeshare salesperson promised something that isn't in writing in the contract, insist that it be included in the contract, or else assume you won't get it.

5. Research the annual fees that the timeshares charge, and compare that cost to taking a vacation elsewhere. Some annual fees can cost almost as much as a week's vacation and if you stay at a non-timeshare property, you obviously also forgo the upfront purchase cost. Some timeshare scammers may try to add on extra administrative fees to the customary annual fees. Some timeshare companies may "go out of business" after they receive your initial deposit. Always check any company's reputation with the Better Business Bureau before entering into a major commitment.

6. Know what's involved with financing a timeshare. Although not technically a scam, timeshare operators are more than happy to finance your timeshare at an interest rate that's most likely much higher than a traditional mortgage loan. If you must finance a timeshare over many years, you end up paying much more in interest than the timeshare is actually worth.