As consumers age, have a decline in their financial situation, or simply change their vacation preferences and habits, they may tire of the burden of monthly/annual timeshare fees and assessments. Their solution: advertise their timeshare for sale or hire a company to advertise and sell it for them! Unfortunately, while there are legitimate timeshare buyers and resale companies, this is a market that has seen its share of scams and fraudulent practices.
Here are some common timeshare reseller scams:
1. You advertise your timeshare interest for sale on Craigslist or other Internet classified advertising site and you get a hit from interested buyer. The buyer insists on using a particular resale or transfer company that happens to charge you a processing or application fee of several hundred to several thousand dollars. After you pay the fee the “buyer” suddenly disappears or sends you an excuse (“loss of job” is a favorite one) as to why they are now unable to purchase your timeshare. Of course, the resale or transfer company “regrets to inform you” that the fees you already paid are non-refundable.
2. You receive a call or an email from a resale or transfer company claiming that they have a willing buyer ready to purchase your timeshare interest. All you need to do is advance closing costs and/or pay other taxes, fees or costs in order to speed up the closing. They promise to hold all of these fees in escrow until closing or promise that you will be reimbursed these fees by the buyer when the sale closes. Unfortunately, the “sale” is continually delayed for one reason or another until both the supposed buyer and the resale or transfer company disappears – with your money.
3. A resale or transfer company offers to buy your timeshare interest and, again, you are required to pay some form of advanced fee to accomplish the sale. You are told that the transfer has been completed, but the resale or transfer company never notifies your resort management company or homeowners association and never files any of the proper documentation with the applicable real estate recording office. You are now in default on payment of your maintenance and other fees (you didn’t think this “buyer” was going to pay them, did you?) and foreclosure proceedings are started.
BEFORE you contract with any timeshare reseller or transfer company:
- Contact your resort or condominium management company or homeowner’s association and find out whether they offer re-purchase or reselling programs and whether they have any experience with the reseller or transfer company you are considering.
- Do your homework— Review the company’s business report and complaint history from the Better Business Bureau. Search for the company or individual on the Internet to see what kind of experience and reputation they have.
- Timeshare interests in Colorado are considered to be interests in real property and any person offering to sell, exchange, buy or rent a timeshare interest, or offering to list a timeshare interest for sale must be a licensed as a real estate broker by the Colorado Division of Real Estate. Ask whether the reseller or transfer company is properly licensed, in which state they are licensed, and their license number. Then, check them out with that state’s licensing agency (many states allow you to do this online).
Here are some basic warning signs and tips to help protect you from these scams:
- You receive unsolicited offers or sales pitches, especially when they include promises like “we have a buyer waiting for your timeshare,” we guarantee you will make a large profit on the sale,” or similar statements.
- The reseller or transfer company only uses a PO box or other mail forwarding service and won’t give you an actual physical address (independently check any address out on the Internet to make sure it’s not a vacant lot or other phony address)
- You are asked to make an immediate payment by wire transfer, money order, or prepaid gift or money card.
- The offer suggests that you are about to be hit with an historic increase in resort or condominium fees or assessments, or similar appeals to scare you into acting quickly.
- Don’t be misled into paying for appraisals, inspections or other services – scammers use these to avoid state prohibitions on collecting up-front fees and these services are rarely needed to complete a timeshare resale or transfer.
- Be wary of any solicitation or offer of purchase that requires you to use a resale, transfer, or escrow company of the buyer’s choice – especially where that company requires some kind of up-front fee.
- If you own a timeshare interest in a foreign country, be wary of any claims by a reseller or transfer company that you must first pay huge sums for taxes or other government charges. Do some independent research and verify any foreign fees or taxes are legitimate BEFORE you agree to pay anything to some third party.
- Due to the huge availability of vacation ownership options, the resale value of your timeshare is likely to be lower than what you paid. Claims of huge or guaranteed profits are usually too good to be true.
KNOW YOUR RIGHTS:
- Under Colorado law, time share resellers or transfer companies are required to provide you with a detailed transfer agreement with their name, telephone number and physical address (no PO boxes), a description of the method or documentation by which the transfer of the resale time share will be completed, and the date by which all acts sufficient to transfer the resale time share in accordance with the time share resale transfer agreement are estimated to be completed.
- Under Colorado law, they must also disclose that they are prohibited from collecting any fees, costs, or other consideration from you until the timeshare resale or transfer company provides you with a copy of the recordable deed or other equivalent written evidence clearly demonstrating that the resale timeshare has been transferred in accordance with the transfer agreement.
If you believe you have been victimized by a timeshare reseller scam or wish to suspicious activity, please file a report here.