Warning Signs For a Timeshare Exit Scam
A majority of Europe’s estimated 0.8Mn Timeshare owners appear happy with their purchase, however, there is a sizeable group of owners who wish to relinquish their contract either through cancelling or re-selling.
A variety of reasons exist for owners wishing to gain release from their contract. The reasons vary according to the form of Timeshare which was bought, but a generic list includes:
- They are unable to utilise their Timeshare, for a variety of reasons including; age, special needs.
- They are unable/do not want to bequeath their contract to their heirs
- The financial burden of maintenance fees have become excessive – particularly if they own multiple weeks
- Unforeseen ‘special assessment fees’ (also known as liability bills) which can materialise at any time for any amount for a range of expenses
- The realisation that Timeshares are not the investment they were lead to believe - possessing minimal resale value
- Limited or NO availability at their resort
- Inability to rent Timeshare weeks as they were lead to believe
- Dissatisfaction with the general upkeep of the resort – particularly in relation to annual charges
- High-Pressure sales approaches to upgrade Timeshare
- Disillusionment arising from broken promises by Timeshare sales teams
Whatever the reason an ‘Owner’, keen or desperate to exit or sell their Timeshare may forget their natural caution and as a result open themselves up to being ‘scammed’ by less than scrupulous organisations or individuals.
‘Scams’ take different forms ranging from:
- in the worst case those organisations which take your money and run.
- organisations which deliver something different to that which was originally promised.
Below are some of the characteristics of a “scam”.
You receive an unsolicited approach or ‘cold-call’
“Alarm bells” should immediately start ringing if the approach has NOT been initiated by yourself through , for example, you requesting information or completing a form on the internet. There is a strong probability that it is a prelude to a scam!!!!
If you are approached, from out of the blue, your details have probably been obtained from a list - commonly referred to as “sucker list” which contains details of individuals who have previously been successfully solicited. The ‘list’ can be obtained through various means such as sold by or stolen from a previous supplier, for example, the resort in which you bought your timeshare.
In sourcing such a list it is highly probable the organisation/individual has not adhered to Data Protection legislation and as such is a strong indication that their ethics may be questionable.
“If you buy this product your existing Timeshare contract will be cancelled.......!”
You are advised that you can exit an existing contract by buying another Timeshare product. In doing so told that your existing contract will be cancelled when the new one comes into being.
In practice, there should be no need to buy another product (unless, possibly, as a trade up with the original developer). In such a scenario the biggest concern is that the original contract is not ended and you are left with two products
“We have a buyer for your Timeshare ...........!”
You are advised that a buyer for your Timeshare has been found – even claiming that the ‘buyer’ has already paid up front or a deposit. That upon payment of a ‘fee’ the transfer of ownership can take place
You have to ask yourself:
- who would begin ‘speculatively’ marketing (and incurring costs) your Timeshare without having confirmation it is for sale and/or having a contract which would ensure they got paid for their endeavours
- who would hand over funds without knowing for certain that an apartment is available for sale
In such cases it is probably fair to say, that there is neither a buyer nor deposit, both of which are simply enticements to get you to pay them monies.
“Your contract can/will be cancelled if you pay (up-front) the fees to cover ..........!”
“Red lights should start flashing” and “alarm klaxons”, the moment you are requested to make any payment up-front!
Most ‘scams’ require you sending money. The art of the ‘scam’ is in proposing a, seemingly, plausible reason for the money whether this be for their direct costs OR, seemingly, third party costs such as official charges for government/court fees, taxes etc etc
“Your contract can be
“We can cancel/sell your Timeshare but you have to act NOW .....!”
Applying “pressure” or a sense of urgency (whether it be time or some other fabricated reason) is a classic sales technique - frequently used in ‘scams’.
The intent is to cause you to act quickly without thinking through (or investigating) the nature of the offer/the company – by which you would probably see the scam for what it is or the pitfalls.
Admittedly, it is sometimes used by reputable companies, for example in promotions, BUT generally they will not pressure you into making a decision/taking action without appropriate – they don’t need to and would be concerned about possible long term damage to their reputation!
“I promise the “moon”..........!”
If it seems too good to be true, it probably is!!
Promises/commitments made by sales people which they won’t commit to paper are worthless and should be avoided.
A frequent tactic is to make verbal commitments to illicit engagement and/or an upfront fee and which is then refuted.
“We can cancel your timeshare and obtain compensation on a ‘no win no fee’ basis .........!”
Sometimes a legitimate offer but can represent an inducement to attend a meeting at which you are sold an ‘alternate service’ costing a significant sum of money – after which your claim makes little progress.
This sales technique is often referred to as “bait and switch”
The details of the offer and contract are unclear
Lack of clarity and obfuscation is frequently deliberate in an effort to either confuse you or lead you into making assumptions which can be subsequently refuted.
The intent is the same – to hide the truth by diverting your attention away from the problems, failings and/or realities of the offering.
If you don’t fully understand ask for a full explanation and ensure all commitments/promises (verbal are otherwise) are contained in written contract and when reviewing the document assume that there is a ‘trap’ waiting to be sprung.
Looking for the ‘traps’ is the reason for engaging an independent legal professional and whilst there will be a cost, it is relatively small to the cost of being caught out.