Consumer complaints about timeshare resale scams have doubled in recent years, according to the U.S. Federal Trade Commission.
Scams typically start with a call from someone offering to sell your vacation property to a waiting buyer. You’re told the sale can go through as soon as you sign a contract and pay an upfront fee.
But after you sign the contract and pay the fee, you’ll never hear from the company again — the buyer never existed, and the contract was for advertising services only, the FTC warns.
Time share owners who ask for refunds find the scammers ignore the phone calls, deny refund requests, or stall to go beyond the time limit you have to ask for a refund of fees paid via credit card.
The scams have become so prevalent that credit card company Visa has joined the FTC effort to identify and prosecute timeshare sales fraud.
“We’re … working with financial institutions to heighten monitoring of timeshare resale merchants,” said Martin Elliott, head of Americas Acceptance Risk and Global Brand Protection, Visa Inc. “We know that there are many legitimate timeshare resellers out there. Our goal is to weed out the fraudulent ones for the benefit of merchants and consumers.”
“If you own a timeshare, chances are you will hear from fraudsters pretending to be resellers, promising a ready buyer, top dollar, or a quick sale. This is timeshare hot air,” said David C. Vladeck, director of the FTC’s Bureau of Consumer Protection. “The more pressure you get to pay fees before your timeshare is sold, the more likely it’s a scam. Check out the reseller, and get all the details of the contract in writing. That includes the fees, costs, and services you’ll get for your money. If the contract you get isn’t what you expected, don’t sign it and don’t pay any money.”
More tips for spotting a timeshare resale scam:
- Don’t agree to anything on the phone or online until you’ve had a chance to research the reseller. Contact the Better Business Bureau, state Attorney General, and local consumer protection agencies in the state where the reseller is located. Ask if any complaints are on file.
- Before you sign a contract with a reseller, get the details in writing. The written contract should include the services the reseller will perform; the fees, commissions, and other costs you must pay and when; whether you can rent or sell the timeshare on your own at the same time the reseller is trying to sell your unit; the length or term of the contract to sell your timeshare; and who is responsible for documenting and closing the sale.
- Ask if the reseller’s agents are licensed to sell real estate where your timeshare is located. If so, verify it with the state Real Estate Commission. Deal only with licensed real estate brokers and agents, and ask for references from satisfied clients.
- Ask how the reseller will advertise and promote the timeshare unit. Will you get progress reports? How often?
- Ask about fees and timing. It’s preferable to do business with a reseller that takes its fee after the timeshare is sold.
If you think you’re the victim of a timeshare resale scam and you can’t get a refund from the merchant, call your card issuer to dispute the charge, if the fee payment was made with a credit or debit card.
Then, report your experiences to the FTC.
Source: FTC, Visa