How To Avoid The Timeshare Scams

The timeshare industry is like any other real estate industry. The sales departments of timeshare companies always try to find a way to get the edge over the customer. It is easy, the better prepared the sales representative, the harder it is for the customer to say no. Moreover, all of the sales reps in place are overtrained to handle the “no”. In their mind, this is just a signal that the sales is starting...

As sales reps are always looking for new ways to close the sale, they may use unhetical manners to get the result they want. This is when sales scams appear. So, we will list the most common ones, with simple advices that will help you not being trapped.

1. Timeshare advisors. Sales reps saying that they do not get a better salary if you sign the contract. They even call themselves “advisors, counselors, or advocates” and are telling you they are experts willing to help you... This is just a trick to weaken your defensive reactions and get you to meet with them. At the end of the presentation, if you do not purchase anything, they may even tell you that they can be your advisor only if you purchase more points, or upgrade into something new. I need everybody to hear this, there is no such thing as an advisor in timeshares, this is definitly one of their best hook.

2. Week exchange and points. If you own a fixed or floating week, you will be told that you must change to points because everyone will soon be on points and you will no longer be able to exchange your week. They will even say that both RCI and II are on a full court press to have all of their timeshare owners to do the shift. Although this part is true, the reason why they do it is purely for a revenue generation benefits. They certainly cannot get rid of your week or make it less valuable. You still own that specific week and that cannot be changed, and the reason they are an exchange company is to make exchanges. According to ARDA statistics, there are more fixed and floating week owners than points owners. So, relax and do not get caught up in the hype of points. Now, if you have done your homework and are itching to get into points, you need to really shop around for the best price and really consider the resale option.

3. The “dinner party”. Here is what it's all about: sales reps go on the road and market to existing owners to have them come into a local hotel for dinner and a very important owner’s update. What happens is you receive a great meal, then get assigned to an “advisor” (remember #1, there is no such a thing), and then you will receive a group presentation that will confuse the most knowledgeable owners. After the conference is over you go and sit with your “advisor” who will then go over your account. In reallity, this is only a sales presentation! You will be told of all the great things that you are missing out on because you have not upgraded in the last so many years, and be pushed to upgrade your contract. So beware!

4. Rental income. Many sales reps are using this as a way to get you to justify making a purchase. New and experienced owners have been falling for this in droves. Here is the idea, you make a purchase for more points and the company will rent the additional points out. Although they do have rental, the chances that you ever get your weeks rent out and make a profit from it are close to 0, simply because you have to cover all the other costs, and because the timeshare company has no reason to spend time on finding a renter for you (anyway, you already bought the points...). Indeed, the company will always rent out the unsold resorts before any owner’s inventory. So, in all cases, say no to this option.

5. Tax incentives. This is a big no-no in the timeshare industry. There are complete and precise rules and regulations controlling this. But still, most timeshare sales representatives fall back on this. They will argue that owning a timeshare is like owning a second home. It means that you could qualify for tax incentives, and even that you could write of the interest that you are paying, just like your home. Well, this is a 100% pure LIE. Never forget that you should never listen to a sales person for tax advices, they are too much concerned by the process. Timeshares never qualify as a second home, and in the majority of the US do not hold any tax breaks. In addition to this, If you own a business, you cannot purchase a timeshare for DBA purposes except in a very specific circumstance (most business owners do not qualify, contact a tax specialist if you really want to consider it).

6. If you do not like it, you can always sell it. This is a load of hogwash and you need to realize that timeshares are not a regular financial investment; they are a quality of live investment only. Most of the timeshares are worthless as soon as you get outside of the cancellation period. Many financial gurus’ all agree that they are not only a bad investment, they are also not worth the paperwork it requires. There are more timeshares for sale on ebay and craiglist websites than you can even imagine. Take a look for yourself. It is such a big issue, that there are hundreds of companies that offer to list and sell your timeshare for a fee. So our first advice would be, do not buy a timeshare if you see it as an investment you can resell later.

7. Exchanges. Timeshare companies will say that you can exchange your timeshare anywhere in the world for nothing and you can do it anytime you like. If you want to go to Hawaii, just put in the exchange request and bam, your are there. For all you who own timeshares, you know this is rather close to the opposite. Sales persons do not sit down with owners to teach them how to properly understand and use the exchange system and they never tell you the truth about price and timing. In some cases, locations take at least two years of advanced planning. They are not exchanged for free and sometimes can cost more than your annual maintenance fees. So keep it in mind, and get as much info as you can on the exchange program - before you buy your timeshare.

8. Maintenance fees. Maintenance fees are always a topic that savvy sales reps will tap. They will even tell you that you can lower your maintenance fees by giving referrals. They may even say that by using their MasterCard you can convert dollars spent into maintenance fees. That's true, but simply impossible to get done, as you would need to spend tens of thousends of dollars every month with their card to just lower your maintenance fee! So don't believe a sales rep when he says you can reduce your maintenance fees.

9. The one-time offer. This is when the sales rep is having difficulty to close the sale. The customer has said no and actually meant it. What occurs is that another sales rep will enter the room, generally pretending to be a manager, and find something that may seem to be wrong with your account. The objective is to put pressure on you, by bringing into the conversation something that looks serious, and is over your head. This person will leave the room to "fix the problem". Then, the person will go back with what looks like a crazy one-time offer, special for you, that can only be taken now... For example, if the price was too high for you, this "manager" will come back with the "best deal of the day" that you will never be able to get again. You may want to play with that to get a better deal on your timeshare, but just be aware that it is only a trick, their last chance to close the sale.

10. Cancellation issues. The last scam is linked with your cancellation period. Many timeshare companies will try not giving you the real information concerning your rescission period. Some companies will hide this information in the owner’s kit, so that you cannot find it when you get home. So, if you have any doubts after you buy and are willing to rethink your purchase, cancel your timeshare, and take time to see if owning a timeshare is really the right thing for you. If yes, then go back and repurchase it.