How to Avoid Timeshare Scams
Coalition to Reform Timeshare Staff | September 9, 2019

Timeshares and travel scams go together like ham and eggs.

Unfortunately, both programs leave a bitter taste in the mouth of consumers who typically don’t know what they’re really buying until the ink is long-gone-dry on their travel contracts.

Based upon the Coalition’s experience with thousands of consumers, here are our best tips to help you avoid getting scammed by a timeshare company — or by one of its imitators, the fly-by-night “travel companies” that call, unsolicited, to offer vacation packages that sound too good to be true, and are.

First, some perspective.  The timeshare industry represents 9.2 million-or-more US households. Timeshares are sold, relentlessly, by major companies that entice couples to attend sales presentations in return for a discounted three-night stay or a $100 gift card, or both, or more.  If you agree to attend one of these, don’t bring your wallet.

Tips for potential buyers:

• Hang up on any caller that solicits you to attend a “free” vacation seminar (or anything else) as a means of getting you to attend a sales meeting. If you agree to speak with the caller, ask them to put you on the “do not call” list, which means they are subject to a $1,000 fine if they EVER call you back. Just for fun, ask them which company they represent.  In our experience, they’ll hang up on you!  Or, ask to speak to a supervisor, and they’ll hang up on you, again!
• However, if you agree to attend a timeshare sales meeting, do your homework beforehand. Go online to sites such as BBB.org, RedWeek.com (among others) to research the company, read reviews and find out what it offers. RedWeek and another reliable site, Tug2.com (Timeshare Users Group), will provide information about sales, rentals and resales at any timeshare resort you can name.
• All brand-name timeshare companies, or clubs, have sophisticated and generally informative websites about their products, people and offerings. Check out their websites.
• Also consider calling a licensed timeshare resale broker affiliated with the Licensed Timeshare Resale Brokers Association (LTRBA). These brokers specialize in timeshare resales, but they know all about the major companies and, most importantly, about the value of a resort or travel club you may be considering buying.
• Do not rely on assertions from any sales people about the value of a timeshare. Most timeshare sales reps are paid on commission, which means they earn nothing unless you buy.  Legally, the only thing that counts in a contract are the words on the contract.
• Most timeshare products — whether weeks or points — have minimal resale value.  They typically depreciate 90 percent or more the minute they are sold.  This is not true for Disney, which is the gold standard in timeshare, and a handful of others, including Marriott and Vistana and Hyatt.  These high-profile companies have quality resort inventory and brand names to protect, so they monitor resales closely and exercise their “right of first refusal” whenever they choose to buy back a high-value property that is being sold on the secondary market.  (The lesson here, for consumers, is that major timeshare companies always control, or have a major hand, in dictating what happens to their products on the resale market.)
• Timeshare products should only be purchased for usage value, not for investment, rental or resale value. Ten, 20, 30 years ago, timeshares were advertised as great investments in quality real estate.  Today, no reputable company markets timeshares as an “investment” because they’ve been sued, too often, for making that false claim in the past.  For more information on this issue, check out the New York Attorney General’s successful civil prosecution of the Manhattan Club.  The court documents speak volumes about the entire timeshare industry’s selling tactics.
• If you are interested in buying a timeshare from a legacy resort — older resorts, no longer affiliated with the original developer, now managed by an HOA comprised of timeshare owners, just contact the resort to see what resales are available. Most, if not all, older resorts have hundreds of dormant timeshare weeks for sale — intervals you can buy for a penny or more, as long as you are willing to pick up responsibility for the annual maintenance fee.
• Bottom line, timeshares are a financial trap that obligates buyers to pay maintenance fees forever, no matter how much they escalate. The average maintenance fee is $1,000 but many run from $2,000 to $4,000.  For many of the people we see at the Coalition, the long-term maintenance fees become a crushing financial burden.  The pain of ownership is even worse when heirs don’t want the timeshare.  For thousands of longtime owners, the only way out is to hire an exit company, or just walk away from the timeshare, abandon the ownership, and hope the property will go into a seamless foreclosure.
• It will be hard, if not impossible, to get rid of your timeshare 20 years down the road. Timeshare companies don’t make it easy to relinquish a timeshare.  The secondary market is flooded with more timeshares-for-sale than buyers, so prices are depressed.  Which is why many timeshare owners freak out when they see a timeshare for sale on eBay or some other resale site for $1.  Problem is, that’s what they are worth.
• Best advice of all: instead of buying a timeshare, rent one from Expedia or another online travel agency, or directly from a resort. Bottom line is, try before you buy.  When and if you decide to buy a timeshare, check out its resale value on tug2.com or RedWeek.com.  You can buy directly from one of their members, too, bypassing the brand-name timeshare company, completely.

Tips for potential sellers:

• Hang up on any company that promises a buyer for your timeshare. In truth, there are no such buyers, but that doesn’t stop companies from trying to persuade you to sign up with a fly-by-night “transfer” company that will demand several-thousand-dollars upfront to get you out of your timeshares.  Many of these transfer companies are scams, so beware.
• Contact your HOA, or developer owner services program, to see if they have a buy-back or deed-back program. Most do, but they don’t publicize it for fear of alerting people to the terrible condition of the secondary timeshare market. Also, beware that resorts often try to use this as an opportunity to sell you another timeshare or upgrade what you currently own. Be resolute and don’t let them confuse you. You should never have to buy into another timeshare program to be eligible to get out of the current contract you are in.
• List your timeshare for sale or rent, or both, on posting sites such as tug2.com and RedWeek.com to test the market. Renting is a good short-term way to monetize a timeshare and offset the cost of maintenance fees.
• Contact a local broker in the LTRBA program for assistance. These folks know the market and will give you a straightforward analysis of your chances of selling your timeshare.  They will charge a commission upon close of escrow — but they only get paid if you sell your timeshare.
• Don’t attempt to give your timeshare to a charity. Legitimate charities won’t accept a timeshare donation because it obligates them to pay your maintenance fees.
• If you have a potential legal dispute with your timeshare company, consult an attorney. Many attorneys specialize in helping owners get out of their timeshares.  But be prepared to pay $5,000 and wait a year or two for resolution.  Search “timeshare attorneys” online unless you can get a legitimate referral from a friend or acquaintance.
• Hire an exit company to help negotiate a release from your timeshare contract. But do your homework first.  The exit industry — which exists only because timeshare companies refused to take care of their longtime customers — is riddled with fraudsters, felons and former timeshare sales people whose special skills include manipulating timeshare owners.  The Coalition supports the exit programs offered by the Timeshare Exit Team.

If all else fails, inform your timeshare company that you are relinquishing your ownership due to financial and family hardships.  Let them handle the paperwork.  People abandon older timeshares all the time (usually because of age or money).  The resorts know how to process “surrenders” and defaults on maintenance fees.  Eventually, the timeshare company will foreclose on your timeshare and take it back.  Then, you’ll be free.

The Coalition to Reform Timeshare is advocating for effective reform and real standards in the timeshare industry to help those negatively affected by timeshare. Help make a difference. Join the movement and sign the petition to #ReformTimeshare.