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Timeshare Scams to Avoid (and How to Spot Them)

From empty promises of a luxury vacation to resale buyers who disappear, timeshare scams are a major financial misadventure, and an extensive challenge to the timeshare industry. Fear not: proven strategies, along with careful research, can keep you protected.

Laura Gohl - Aug 10, 2023

Vacation ownership can be a traveler’s dream, and avoiding the entanglement of a timeshare scam will keep the experience a positive one. Here’s a brief rundown of scams to keep an eye out for and where to go for insight and support.

What to Look for: Pre-Timeshare Purchase

Even if you aren’t currently a timeshare owner, beware of fraudulent vacation promotions circulating the timeshare industry. A free stay at a five-star resort sounds pretty grand, but if the offer shows up out of nowhere or hinges on an upfront fee, beware. 

Counterfeit correspondence may arrive via (for example) paper mail or faxes. The tech and digital world adds another layer of complexity, as companies may attempt to reach you via email, text message, or advertisements online. Keep an eye out for red flags like unsolicited correspondence or any requests for wire transfers or fees in advance.

Most importantly, if an offer or promotion purports to be from a major brand and seems too good to be true, call the brand up directly. For example, if you’ve received an offer to stay at a Wyndham resort, enter the official club website (here is Wyndham’s for example) in your browser and phone or email their team using the details on the page. The brand’s marketing team can let you know if what you’re hearing is for real, giving you the peace of mind you need to actually take them up on what could be a great offer.

What to Look for: Timeshare Rental Scams

If you’re looking to earn some cash for unused points or weeks, there are some reliable professionals out there. There are also a preponderance of scams that pose as rental agencies. These companies often cold call victims, pretending to be affiliated with reputable brands like RCI or even your own timeshare brand. Next, they’ll present a situation where they “already have renters” for your getaway weeks (that you didn’t even know you owned!). The scam usually presents some corporate event that seems legitimate — and they need your inventory to fill that demand. They’ll also dangle thousands of dollars of guaranteed rental income. Of course, you’ll need to pay an large upfront deposit first to receive that income. FYI: There is no rental income, they just want the deposit.

That’s not to say there aren’t rental companies that require some upfront cash but get real results. While you can list for free, KOALA has an annual VIP Membership option, other reputable platforms like Redweek and TUG charge varying upfront listing fees. Bottom line, just make sure you know who you are dealing with. If you’ve not heard of them, chances are it’s a scam. 

What to Look for: Timeshare Cancellation

If you’re ready to part with your timeshare, you’re probably hoping for a quick sale – especially because of fees that keep accumulating each year. Annual maintenance fees are a part of every vacation ownership journey. The problem is, that bill will keep arriving, even when you stop traveling or change your plans.

In 2018, ARDA estimated the average timeshare maintenance fee to be $1,000. Owners with points also owe club dues each year. It’s understandable why you would want to eliminate this expense as quickly as possible. But be vigilant as you enter the cancellation phase of the process.

The majority of timeshare scams rear their heads during the resale process. Individuals claiming to be from exit companies may call you with too-good-to-be-true promises to free you of your timeshare or even inform you that they have already found a buyer for it. That’s when the request for an upfront fee comes in.

Most importantly, if an offer or promotion purports to be from a major brand and seems too good to be true, call the brand up directly

Sadly, timeshare owners who do pay a fee to such a company may then find themselves out hundreds or even thousands of dollars. Worse, once they’ve paid the hefty upfront fee, owners are often left with radio silence. Some timeshare scams even encourage owners to hold off on their maintenance payments while the sale is being negotiated. The owner is then left with a financial loss and a potentially damaged credit score.

Our Advice? Authenticate Everything

In regards to incoming calls or emails, even if the correspondence is coming from an organization you’re familiar with, make sure the message is actually originating from that source. Unfortunately, it is far too easy for timeshare scams to replicate a letter that appears official, or send out a phone call name-dropping a brand that you trust.

If a letter arrives hailing a new promotion or warning of increased maintenance fees, double check the info by calling the brand or company directly. If you’re unsure, ARDA provides a list of timeshare scams to look out for.

Team Up with a Pro

With any timeshare inquiry, whether you’re trying to sell your unit or just gain a better understanding of your points, your first call should be to your home resort. In recent years, many brands have launched specialist teams to help owners exit their timeshares, offering support from buying back units to connecting owners with resort-approved sales agents.

Even if the correspondence is coming from an organization you’re familiar with, make sure the message is actually originating from that source

Beyond that, make sure whomever you’re working with is verified by industry experts – like ARDA’s Coalition for Responsible Exit, The Better Business Bureau, or the FTC. These organizations work to provide owners with data on the timeshare industry and support for various stages of ownership. Their websites offer a wealth of information, including case studies on recent frauds, channels to report scams, and lists of authenticated sources.

Now, the Good News

The good news is that brands and resort developers are increasingly willing to work with owners to exit or sell their timeshare directly back to them. While the industry may still have more unsavory actors than it should have, there are legitimate resources for those that seek help.

As you navigate vacation ownership from signup to sale, following these tips will set you up for prime vacations. And if you eventually decide to move on from your timeshare, you’ll be on the path to a stress-free exit.

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