Timeshare pitfalls continue to trap consumers
Better Business Bureau
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March 8, 2012 | 1893 views | Post a comment
BBB reports that new tactics are catching new victims
AUSTIN, Texas - It is a common scenario. Someone receives a mailer or email offering a free trip or other fantastic prize and all he or she has to do is sit through a half-day seminar. Once the victim is there, the company turns on the high-pressure tactics in an attempt to sell a timeshare.
Often, the offer is legitimate, if unwanted. Other times, the offer is a scam meant to bilk honest people of thousands of dollars. Such scams have prevailed for decades, and most savvy consumers are wise to them.
So, the con artists have changed their game, prompting new warnings from the Federal Bureau of Investigations, and enforcement efforts from the Federal Trade Commission.
Better Business Bureau received more than 2,600 complaints nationally about timeshare resell companies last year, and almost 200 more in January 2012. Some complain about available dates or other management issues, but many allege that companies collected money for fees or other charges and then disappeared.
Corpus Christi resident Thurman Huddleston complained to BBB after wiring more than $10,000 to a Dallas company promising to sell him a timeshare in Mexico.
“The people were good,” he said. “I really beat myself up, because I should have known better. It just sounded like a viable thing.”
Huddleston said when he first got the call, he researched the company online and did not find any red flags. When the company asked him for a payment to cover the closing costs, he did not hesitate. He wired the money, leaving no trace for law enforcement to follow later.
Then they came back and asked for more money to cover the annual property taxes.
“So that sounded a little fishy, but I figured they probably won’t (let me buy a unit without paying taxes),” he said. “That should have been the last red flag, but once you’ve got that much money in it, it’s hard to walk away.”
Soon after, the company he was dealing with became impossible to contact. Huddleston suspects the timeshare never existed to begin with.
Now that people are more aware of scams like the one Huddleston fell for, scammers have started targeting victims that might not be as diligent: current timeshare owners.
The FTC cracked down on telemarketers claiming to have buyers lined up, then disappearing with the thousands of dollars owners paid to cover fake closing costs or as a deposit that would be later refunded.
The FBI reported a similar scam, with a con artist contacting the victim by phone or email and promising to sell the victim’s timeshare in a short time, often between 60 and 90 days. The scammers asked for hundreds to thousands of dollars to cover anything from closing costs to listing fees.
Sometimes, according to the FBI’s warning, the victims are then contacted a second time -- this time by someone claiming to be from a recovery company. The scammer, who may be connected with the original resale company, tells the victim that he can recover the lost money for a fee.
Once again, the scammers disappear after the victim pays.
Huddleston said that though he lost thousands to the con artists who contacted him, and he feels like a dupe for falling for the scam, he is just happy to have learned his lesson.
“I didn’t get too angry over it. I hated to lose the money, but I learned a lot,” he said. “The next time somebody calls, I’ve graduated from that class.”
When buying or selling a timeshare, BBB offers the following tips:
· Beware of upfront fees. Though there may be closing costs or other fees associated with purchasing a timeshare, be wary of any company that pressures you to pay any such fees upfront or before reviewing any contracts.
· Read the fine print. Especially when selling a timeshare, make sure to read the contract carefully. Find out if the company is actually selling your timeshare or simply charging you to advertise the listing.
· Start with trust. Visit www.bbb.org to check out the BBB Business Review for a company before paying any money.
· Never wire cash. Credit cards offer a certain amount of fraud protection that you cannot get if you use a wire service. Walk away from any deal that requires you to pay cash or wire money, especially to locations in other countries.
· Get it in writing. Ask the salesman for all information in writing, including all fees, timing and ways the seller plans to advertise the unit.
· Check the license. Ask for licensing information for the seller’s agents, and check that information with the Real Estate Commission. Only deal with licensed brokers and ask for references.
· If it sounds too good to be true, it is. Be wary of any seller who promises a big selling price or quick turnaround. High-pressure tactics are always a red flag.
· Know where to turn. Before selling your timeshare, read the FTC’s advice on selling a timeshare and report any scams to BBB or the FBI’s Internet Crime Complaint Center.
To check the reliability of a company and find trustworthy businesses, visit bbb.org.
About Better Business Bureau:
BBB's mission is to be the leader in advancing marketplace trust. BBB accomplishes this mission by creating a community of trustworthy businesses, setting standards for marketplace trust, encouraging and supporting best practices, celebrating marketplace role models and denouncing substandard marketplace behavior.
Businesses that earn BBB Accreditation contractually agree and adhere to the organization's high standards of ethical business behavior. BBB is the preeminent resource to turn to for objective, unbiased information on businesses and charities.
Contact BBB serving Central, Coastal, Southwest Texas and the Permian Basin at (512) 445-4748.