I was offered a free stay at a luxury resort in the Canary Islands. It seemed too good to be true, and, of course, I wanted to know what the catch was. I was told that I would only have to attend a timeshare presentation that would last an hour or so. It seemed like a pretty fair tradeoff to me. There was no chance I would buy the timeshare and I told them this upfront. I was assured there would be no problem.
I can’t say it was an actual presentation. At the assigned time, we were ushered into a large room with numerous desks. The desks were manned by salespeople trying to persuade other guests to invest in a timeshare. We, too, were assigned to a salesman. He gave us his spiel. Everyone wanted a timeshare in the Canary Islands. We were lucky to be given this chance. Besides, if we ever wanted to resell the timeshare, we would make a fortune. He used every angle in the book, even taking us to the most luxurious timeshare in the area. He also hinted that he would be in trouble with his boss if we didn’t agree. He had the papers to sign right there, and I can’t say I didn’t consider it. But, in the end, I just wasn’t that enamored with the Canary Islands, certainly not enough to want to go there every year. We finally were allowed to leave and heard him explaining to his boss that we had basically tricked him into making him think he had a sale. It was not a pleasant experience. However, I could easily see how someone could be pressured into buying something they really didn’t want.
Most purchasers of timeshares regret their purchases once they return home, and that’s an understatement. According to experts, “85% of all buyers regret their purchase, citing reasons including money, fear, confusion, intimidation, and distrust” and “41% of buyers never thought they would regret their purchase, but ended up doing so; 30% were neutral prior to buying, but came to regret their decision”.
It’s true that some timeshare sellers give buyers a limited time to change their minds about their timeshare purchases. However, many buyers complained that the sellers never told them they had such a timeframe. Most states will also give timeshare buyers a limited time to cancel their contracts. This ranges from 3 to 15 days. Those wishing to cancel a purchase must do so strictly in accordance with cancellation guidelines. This often requires a handwritten letter sent through registered mail. It may even require that such a letter be delivered in person, which could mean a flight back to the timeshare location. Also keep in mind that cancellation laws only apply to timeshares purchased in the U.S. The laws will not apply to any timeshares bought in Mexico or the Caribbean, although those countries may have their own laws.
Here are some points that those in the know recommend to people who are considering buying a timeshare.
1. “You will be liable for special assessments, property taxes, maintenance fees, and utilities. If you don’t pay these, the timeshare developer can foreclose on your timeshare.” This is why you can find timeshares for sale at $1.
Although the maintenance fee is listed, there is no information on taxes or other fees.
2. “There are very few buyers looking to purchase a timeshare in the after-market, which makes them very difficult to sell. The bottom line: You will likely lose money when you go to sell your timeshare.”
3. If you think you can make money renting your timeshare, think again. “While many timeshare contracts allow you to rent your timeshare to others, the reality is that this is difficult to do. There are usually many timeshares for rent and few people who want to rent them. In addition, some contracts don’t allow you to rent your timeshare, and others place restrictions on the rental of your timeshare.”
4. “In many cases, if you factor in the additional costs that come with timeshares, like special assessments, maintenance fees, taxes, and the like, you’ll find that renting a hotel room in a similar resort ends up being cheaper.”
This is not a post against purchasing a timeshare. I know of people who are quite happy with theirs. I just want to show the prevailing atmosphere that exists around them. It is this environment that creates the niche within which scammers can operate.
How the Scam Works
The scammer first must find people who are reselling their timeshares. This is not difficult. There are sites that list timeshares for sale. However, you will not be directly given the owner’s contact details. You must work through the website to contact the owner. Nonetheless, scammers know that few sellers would reject any requests since they are desperate to sell.
Other timeshare reselling sites will give the names of the owners without contact information. However, I was able to use the names to search down their contact information. It is easier if the owners have an unusual name. Keep in mind that some timeshare reselling sites are run by the scammers themselves. They are simply a way for scammers to get your personal information. On top of that, they will charge you a fee for listing on their website. Then again, there are sites where resellers post all of their contact information. These are the easiest for scammers to use. In any event, it is relatively easy for scammers to accumulate a list of possible victims. I see no reason why these lists couldn’t be for sale on the deep web or elsewhere.
After getting the contact information, the scammer will contact the potential victim by phone or email. They will claim some credential such as being a real estate agent or lawyer who specializes in reselling timeshares. The scammer will tell them that they have been contacted by a person who wants to buy their timeshare. This buyer will pay far more money than the seller could ever hope for. In order to complete the transaction, however, the victim will need to pay a fee. The fees may go under a number of names. They could be called resale taxes, commissions, international money transfer fees, capital gains taxes… it really doesn’t matter. The criminals just want the victim’s money upfront.
They will also pressure the victim to hurry. The buyer must get an answer at once or the deal will be cancelled. They will contact the buyer as soon as they get the fees. They may also request personal information and bank account numbers.
The Recent Scam Upgrade
The recent version of this scam uses the names of legitimate lawyers, real estate brokers, or websites. They may not claim they have a buyer, but they will claim the market is good for property in the area of your timeshare. They will give you a money back guarantee if they don’t sell your timeshare by a certain time.
If you ask to talk to a lawyer, they will tell you they have a lawyer in the U.S. you can talk to. This is important if the timeshare you own is in a foreign country. You would be more likely to trust a lawyer from your own country, They will give you the lawyer’s name and if you check them out online, you will find that the lawyer or law firm appears legitimate. If you call the lawyer or otherwise contact them, you will get an answer. Why? Because these lawyers or firms have abandoned their websites and they have been taken over by the criminals (see my article on fake legal firms). The victim will not know this and will not realize that they are not contacting a fake lawyer who’s in on the scam.
Most of the recent, and highly successful, scams have been operating out of Mexico. They appear to be run by Americans and Canadians living there. This is important because, being native English speakers, they are not so easily identified as scammers, whose poor use of English often gives them away, especially in emails. In short, these new scams are much more likely to succeed in bilking desperate timeshare owners out of as much money as they can get. A scam reported just a few days ago managed to steal over $23,000 from a Mexico timeshare owner. The criminals charged money for “advanced payments of fees to proceed with the transactions, such as, foreigner income tax, municipal tax, release certificate fee, escrow fee, bank charge, notary fee and customs fee.” The most insidious scam I found cheated an elderly couple out of $180,000 by promising them that all of their fees would be reimbursed.
These scams have been proliferating at an alarming rate in recent months, which is why I decided to look into them. Someone is making millions. The reason for their success lies in their ability to appear legitimate to desperate people. The victim wants to believe it’s true and simply needs to be nudged with legitimate looking websites and documentation. Timeshare sellers may think they have checked out the legitimacy of the seller and, being satisfied, will go ahead with paying fees. The best advice I can give is to pay nothing upfront. Legitimate agencies will collect fees after a sale. If the agency wants you to wire money, it’s probably a scam. If they try to pressure you or tell you to act immediately, back away. But most of all, follow the old adage that if something seems too good to be true, it probably is.