Recently, the Federal Trade Commission brought forth 191 actions against fraudulent operations engaged in selling timeshare resale services and travel prize packages. According to the agency, homeowners have been duped out of more than $14 million this year.
Fraudsters have been using the dip in the economy as an opportunity to prey on timeshare owners who are desperate to sell. Another vulnerable population, elderly homeowners, has also been targeted. Â This is how it works: property owners receive a phone call from a fake timeshare-resale service claiming they can help resell the property. Â The owner is convinced to pay high up-front fees after they’re told a buyer is ready to purchase the property. However, in reality, there is no buyer. Even worse, once the property owner discovers it was all a scam, he or she can’t get the money back. Homes that are most often targeted are usually condos in popular vacation spots that have high maintenance costs and are hard to resell.
Furthermore, consumers are lured by fraudulent travel-prize promoters into paying for discounted or “freeâ€ luxury vacation packages but often end up attending a high-pressure timeshare sales presentation. In addition to unsolicited phone calls, consumers might be subject to scams via email, mailings, radio, and advertising on television and online.
The FTC has this advice for timeshare owners who are thinking of selling their property:
1) Never pay for a promise. Be skeptical of resellers claiming the market in your area is “hotâ€ and they’re being flooded with buyer requests. Some may say they have anxious buyers ready to purchase your timeshare immediately, or promise to sell your timeshare within a certain time.
2)Â Get everything in writing. Don’t make an agreement over the phone or online. Get all information about their offer in writing. Your first step should be to research the reseller thoroughly. Take time to reach out to your state Attorney General and local consumer protection agencies in the state where the reseller does business. Check to see if any complaints have been filed against the company. Also, do an online search for complaints.
3) Check for appropriate licensing. Always ask if the reseller’s agents are licensed to sell real estate where your timeshare is located. If they are, check this information with the state’s Real Estate Commission. Only do business with licensed real estate brokers and agents and ask for references from clients.
4)Â Pay only after your unit is sold. Conduct business with a reseller that takes its fee after the timeshare is sold. If you’re asked to pay a fee in advance, ask about refunds. Get a copy of refund policies and promises in writing.
For more information, check out the Federal Trade Commission’s infographic entitled Timeshare Resale Scams.