Over 8 million Americans own a timeshare. While 7 out of 8 U.S. timeshares owners are satisfied, half of the American households are having trouble paying their bills. In a world of tough choices, a timeshare invoice is probably placed at the bottom of a stack of bills.
When approximately 850,000 people are looking to get rid of their timeshare, the sharks see a business opportunity to take advantage of owners, especially seniors. Unfortunately, it can be challenging to determine who is trustworthy and who isn’t to rent out or sell your timeshare. So, keep your wallet closed, trust your gut, and ask for everything in writing.
Common Scams Used to Target Owners
As a fellow timeshare owner, I know how complicated it can be to find reliable information on how to sell a timeshare legally with your credit score in tack or how to rent out your timeshare to cover some of your maintenance fees. I’m guessing that your social media feed is also filled with advertisements from various timeshare termination teams and timeshare attorneys.
1. Unsolicited Callers Asking For Upfront Fees
One of the most prevalent resale scams is unexpected calls from a company claiming to have a legitimate buyer ( or renter) for your timeshare. This person might say they have a person waiting but need funds upfront. In this case, they may ask for transfer fees, taxes, international transaction fees, or other fictitious explanations. It is seems to good to be true, than it probably is.
ARDA and the BBB identify that the biggest red flag in dealing with third-party companies who want to sell or help exit your timeshare is paying exorbitant upfront fees.
Unsolicited calls are immediately a red flag because no legitimate timeshare company will ever call you “out of the blue.” It is illegal to reach out to you unsolicited. In other words, unless you have permitted a resale company to contact you, they can’t. Generally, as a seller, you should not have to pay closing costs unless otherwise negotiated, and definitely not before signing any contracts.
Buyers typically pay transfer fees and commissions, not owners selling their timeshare. If someone asks you for high up-front fees or personal information, they are probably not a legitimate timeshare buyer or renter. It’s a huge red flag.
2. Fake Timeshare Employees
In today’s world, timeshare scams are getting harder to catch. Scammers have also manipulated the phone number that shows up on caller ID. First, they will use area codes of credible timeshare resale companies or even your home resort and pretend to be a “representative.” Then, they call timeshare owners and claim that they have a buyer or renter interested and require funds upfront to close. They might even give you fake email addresses that include names of credible timeshare resale companies or your timeshare chain – like Vacation Village.
This timeshare scam is harder to avoid, but there are ways to proceed cautiously. Never pay up-front closing costs or “luxury taxes.” As a general rule, never give out personal information when someone calls unsolicited. For example, your credit card, social security number, or bank account.
If anyone contacts you unsolicited claiming to be with a well-known timeshare company, reach out to the company directly and let them know of this offense.
3. Timeshare Contract Cancellation or Timeshare Exit Lawyers
Companies offering timeshare contract cancellations or timeshare exit lawyers are also scams. These con artists make promises to “get you out,” “cancel your mortgage,” or “exit your timeshare” with a 100% money-back guarantee.
Some are even backed by celebrities who most likely never owned a timeshare of their own. They often prey on people who regret their timeshare purchase or are in financial hardship. For example, for years, Dave Ramsey touted, endorsed, and advertised Timeshare Exit Team’s services as a trusted company that his followers could turn to when they no longer wanted their vacation ownership.
“Timeshare Exit Team, it’s the only people we endorse for getting you out of your timeshare because it works!” Ramsey said. They charged most people an upfront fee between $3,000 and $9,000 and offered a 100% money-back guarantee. It seemed too good to be true, and it was.
Timeshare exit lawyers will say there is no resale market and offer their “services” for thousands of dollars. In addition, they will tell you to stop paying your timeshare mortgage and maintenance fees during the “exit” process.
Many owners have fallen victim to this scam because they tell them they have a money-back guarantee if the service fails. However, these companies’ contracts string owners along for years, claiming that the exit process can be lengthy, but they only hurt the owners more than help them. And before you know it, companies like Timeshare Exit Team close down, taking your money with them.
4. “Stop Paying Your Timeshare Maintenance Fees”
Do not just stop paying your timeshare maintenance fees. Anyone who tells you to do that is not looking out for you in the long run. If you decide you no longer want your timeshare, this is not the way to go. The problem with this is it will cause your ownership to default. Then, it will lead to you hurting your credit, which stays on your credit report for many years. This could lead to repercussions when you next want to buy a house, car, or other expenses.
How to Safely Get Out of Timeshares and Avoid Scams
The best way to avoid scams if you are trying to sell your timeshare is to contact your resort or developer first. Most developers have in-house programs for owners who own their timeshare free and clear of any loans. While selling a timeshare is something you can do yourself, there are trusted, reputable companies out there that can also provide a full-service sale of their timeshare.
However, owners should only use companies that are members of ARDA, the Coalition for Responsible Exit, or at least use companies that the BBB accredits. ARDA Members must follow a strict Code of Ethics, which protects timeshare owners. In addition, many are also a part of the Coalition for Responsible Exit, which advocates for protecting owners from unscrupulous companies asking for a large upfront fee in the thousands of dollars.
If you’d like to start to rent out your timeshare, you can do this yourself, listing your week on reputable A+ Business Bureau-rated sites with 3 million users for under $100. Here’s my article covering it all: An Owner’s Guide To Successful Timeshare Rentals: 6 Options with Their Pros and Cons