Timeshare has a bad reputation. This reputation isn’t always entirely deserved although clearly there are problems with Timeshare. Many people enjoy their Timeshare and have done for many years. They have enjoyed many holidays at their resort. The problems with Timeshare are not often the product itself but the way that it is sold and the way that it is run in subsequent years.
Often when Timeshare is sold the salesperson will use high pressure tactics to close the sale. Buyers will be told that the special offer that is being put forward is only available until the end of the day and after that the price will go up. This is rarely the case. Sometimes clients are taken to different locations with no way of getting back to their hotel and are submitted to many hours of high pressure selling. Clients are subjected to long presentations without any food but are given alcohol. Time and time again we speak to people who say that they simply signed the contracts to buy just to get away from the sales presentation. This is particularly the case when the clients are elderly and are more easily pressured by salesmen.
A variety of misleading statements and misrepresentations are frequently included within the “sales pitch”, the most common that we hear of are;
- "Of course your Timeshare is a good investment and will go up in value.”
- “With this you can go and stay anywhere in the world for the same price”.
- "We will guarantee to buy it back from you in X number of years”
- “You will be able to rent it out for more money than the maintenance fees”
- “The maintenance fees won’t go up”
- “If you don’t sign today the price will go up”
- “If you don’t sign today then we are not allowed to sell to you at the same price”
Maintenance fees have increased dramatically over time. We generally speak to people who started off with a couple of hundred pounds a year for maintenance and are now paying around £1,000 and others who are paying £500 per week that they own. If you own several weeks this can easily mount up to huge annual bills - particularly if you don’t actually use your Timeshare.
We are increasingly seeing clients who are being pressured by their Resorts to pay maintenance fees which are escalating year on year. Some of the Resorts regularly now employ debt collection agencies to chase down the defaulters. In extreme cases some resorts have actually issued proceedings against clients, taking the view that they ( the Resort) will go over the top in collecting maintenance fees because that way word gets around that they (the Resort) are difficult to deal with and therefore the other owners will be more likely to simply meet the demands.
Problems in exiting Timeshare
There are many scams that have sprung up as people want to get out of Timeshare. Here are a few of the more prominent Scams;
The Buy Sell Scam
This is where you are told that you can exit out of your Timeshare if you part exchange it for another product. You are assured that this is not Timeshare. In reality you often you end up paying thousands of pounds and end up with the new product and still have your original Timeshare.
You are told that nobody wants to buy your Timeshare but if you buy more weeks then it will be more valuable and it will then be possible to sell. In reality, you buy more and end up in the same position but several thousand pounds poorer and a bill for even more maintenance.
The Resale Scam
You are told that a company can sell your Timeshare for you. You pay this company several hundred pounds to advertise it and no sale ever materializes. Of course if you pay some more money they can advertise it again for you….
The Fictional Buyer
You are contacted out of the blue by a company who says that they have a buyer for your Timeshare. The price is much more than you would expect and is often more than you paid for it in the first place. The buyer has even already paid a deposit! All you need to do is to pay to the company some money for fees, taxes or some other reason and you will receive a cheque for the sale. You proceed and your money is paid to the sales company and you hear nothing more. In reality there never was a buyer.
The Class Action Scam
You are contacted by a company claiming to act on behalf of hundreds or thousands of clients who are taking a class action against RCI or the Resort. You are asked to pay some money to join the Class Action. In reality there is no class action and you have just lost all the money that you paid over to the callers.
This is similar to the Buy Sell Scam. You are told that a company can cancel your ownership at a Timeshare if you simply buy one of their products. They will then take control of cancelling your Timeshare for you. In reality you end up with a new product and still have your existing Timeshare.
Warning signs that indicate a scam
Buying something else
Often Timeshare owners are told that there is a way out of their Timeshare and that all they need to do is to buy another product. They are then told that the Timeshare will be cancelled when the new transaction takes place. There should be no need to buy another product in order to get you out of your Timeshare. If you are being told that you do then they are just trying to sell you something else. What happens if the Timeshare is not cancelled? You may end up with two products instead of just one.
Costs don’t make sense
In most scams there is some reason why you have to send money. This could be for taxes, government fees and the like. You are told that these need to be paid in order to effect the transfer. In most cases these costs are made up and this is simply a way of extracting money from you on the premise that there is a buyer. In most cases there is no buyer and the fees, taxes or costs do not exist.
If you are being pressured into doing something you have to ask yourself why. Reputable companies do not need to pressure you into using their services or selling you their products. There is rarely a true deadline by which you have to sign up to a service or product and the offer will still be there if you return on your own time You are being pressured into doing something, particularly parting with money then this is because they realise that you will see through the scam given time to reflect and investigate.
If somebody calls you rather than the other way around it is generally a scam. They have obtained your details from what is known as the “suckers list” which they probably obtained from somebody else (often the resort) either by buying the list or by stealing it. The people on this list are then contacted as they have fallen for a scam in the past and are therefore likely to fall for another one. Some people fall for scam after scam.
You don’t understand it
If you don’t understand something then often this is because the person is trying to baffle you in order to hide the truth. We regularly speak to people who signed contracts without understanding what they were signing or even understanding what they were buying. The reason why things are so confusing is that the salesman is trying to deliberately confuse you so that you don’t understand the problems or failings of the product. If it is legitimate then you should understand it.
Don’t assume anything
Look carefully at what is being offered as often the reality is very different to what you believe you are being offered. Unscrupulous salesmen are very clever at telling you things in a way that your own assumptions lead you to believe something different from the truth. Only believe anything that is put down in writing (and even then be sceptical).
Assume that there is a trap hidden within that documentation and look for it. It makes sense to get somebody with legal knowledge and knowledge of the timeshare industry to look at any documentation as they will find the traps.