Timeshare Resale Scams – T.F.T.I.

Tales from the Inside

We’ve talked about timeshares and the many reasons not to get involved with them. We’ve covered the sleazy tactics many salespeople use to reel you in during the presentation. We’ve even discussed the most common myths of the Timeshare industry. It’s no secret I am not a big fan of Timeshares or of shady salespeople. As much disdain I have for the industry, there is one industry that I believe I am even more upset by…

Timeshare resale scams.

The whole idea is a wonderful concept, and one that us much needed. With so many people regretting their timeshare purchase and wanting desperately to get rid of them, the service could really benefit a lot of people. There are many companies providing the service, and while they all offer their own individual results, the most common is the quick and easy sale of the property to another private party.

While the concept was developed with good intention, it wasn’t long until the scammers jumped on the bandwagon and saw this as a great opportunity to take money from innocent people. Not only are we talking about the typical scammers we are all used to (were you aware the warranty on your vehicle is expiring!), but seasoned timeshare reps all over saw the opportunity to make a quick buck as well. That’s right, the timeshare reps that were responsible for tricking so many of these people into ownership in the first place, was now going to represent them and help bring them justice.

I’m sure you can all see where this is going…

Fast forward a few years later, the industry may be more dangerous to consumers than the timeshare industry itself. Most people end up paying fees of several thousand dollars with the promise of results, only to be strung along and ultimately realize they are no closer to getting rid of their property than they were to begin with. I have personally heard stories of people investing over $15,000 into a timeshare resale scam.

Here are a few red flags that you should be cautious of, based on the information provided by Consumer Reports.

Resale Scam Warning Signs:

Watch out for up-front fees.
Generally, fees are paid at the conclusion of the service, or are taken out of the settlement.

If it sounds too good to be true, it probably is.
Most scams will come with the guarantee of a quick sale. If you have tried to get rid of your property yourself already, you know that nobody can guarantee a quick sale.

Don’t wire money, pay in cash, or send a money order, certified bank or cashier’s check.
These methods are extremely difficult for law enforcement to track. It will basically be lost. Stick with personal checks or wireless transfers.

Do your research.
Don’t be so quick to assume that the company has a nice website and social media pages that they must be legit. Contact your State Attorney General and local consumer protection agencies in the state where the reseller is located. Don’t forget to check the Better Business Bureau as well.

Check with your resort.
Check to see if your resort has any restrictions, fees or limitations that would contradict what the resale team has been telling you.

Demand everything in writing.
Every promise, request and payment proposal. Be sure to have an attorney available to review the documents as well.

While there are honest companies out there providing this service, it seems there are more scammers looking to take advantage of someone. If you do find yourself negotiating with a timeshare resale company, just be sure to watch for these warning signs and protect yourself.

– D

Rescinding With Credit Card and No Down Payment

One of our users left the following comment on our 10 Steps to Successfully Rescind Timeshare article:

I signed with RCI and Legacy, its past the cooling off period, but I haven’t paid the down payment yet. Does that mean the contract is still valid? should I just cancel the card and not pay? would that cancel my contract?

credit cardIt would make things a whole lot easier if you could simply cancel your credit card to get out of your contract, but unfortunately that is not the case. According to credit.com, once the seller has your credit card information, they will also be in possession of your social security number. So once you cancel the card, the account will then be referred to a collection agency, at which point they can report it to a credit reporting agency. You will still be responsible for payments and if you do not make them on time, it could hurt your credit score.

It is also likely that your down payment by credit card was processed very quickly by the seller when you signed the contract and that what you now have yet to pay is the bill from your credit card issuer. The good news about making such a purchase on a credit card, however, is that you have the right to dispute the charge if you feel the seller misrepresented the product (in this case, the timeshare) or did not deliver what was stated in the contract. There is a time limit for disputes, however, usually around 60 days. Read your credit card agreement so you know how much time you have.

How to Transfer Timeshare Ownership

If you’ve decided to either gift your timeshare to a family member or sell your timeshare, you will transfer timeshare ownershipneed to transfer ownership of your timeshare to the new party. A transfer of ownership is handled in a formal, and often complex, process. Because of the nature of the process, it might be in your best interest to hire a closing company to take care of the paperwork for you. You can, however, handle the process yourself if you choose. If you decide to do it yourself, follow these steps to ensure a smooth transfer of ownership:

  1. Make sure you are up-to-date with all payments. You might also want to call the resort to see if they charge any fees for transferring the timeshare. If so, you and the buyer of your timeshare will need to figure out who will pay those fees.
  2. If it is required by the resort, you might also need to fill out a membership transfer application before continuing with any legal paperwork.
  3. Draw up an earnest money contract. A timeshare transfer is a real estate contract, and should be just as detailed. Be sure to include:
    – the name of the resort and unit number(s)
    – the weeks in which the timeshare is available
    – whether those weeks are fixed, floating, or tied to a points system
    – interest information (fee simple, estate for years, membership, etc.)
    – who is responsible for maintenance fees, special assessments, and delinquent fees
    – what will happen in the case of default
    – names, contact information, and signatures of all parties
    – any other relevant terms of the sale
  4. If it’s a deeded timeshare, you will need to get a new deed with the county clerk’s office in the county where the timeshare is located. Both parties should sign the deed in front of a notary public, and then have copies made for each party. Submit the original notarized deed to the county clerk’s office, along with any required recording fees or tax fees.
  5. Send a copy of the recorded deed along with a covering letter to the timeshare management company detailing the transaction, including information like the designation of the timeshare, internal account numbers, the week, unit number, and season as well as the social security number and contact information of the purchaser.

If you or the other party is uncomfortable with navigating this process without the help of an attorney or closing company, you may want to reconsider your strategy. Otherwise, be meticulous when filling out your paperwork and you should be able to transfer your timeshare fairly easily.

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