How to avoid timeshare scams: A guide

Fraudsters prey on seniors; here's how to hold onto your money and credit cards

Madison Blancaflor
Content writer
Specializes in in-depth guides and resource content for readers

How to avoid timeshare scams

The FTC named timeshare scams one of the top frauds of 2017, making it one of the largest threats to travel security in the U.S. People are drawn in with the promise of a free vacation or “great deal on a slice of paradise,” only to be stuck with a condo you’re only allowed to use one week out of the year and no way to get rid of it. 

What is a timeshare? 

The timeshare industry was born in the 1970s, and according to the American Resort Development Association, it has grown into a $9.2 billion industry. The idea was that a condo developer could sell one unit to multiple people based on time. 

Buyers could own part of a luxury condo at a popular vacation destination, much like shareholders could buy portions of a public company. Rather than paying full-price and having to manage the property, buyers could pay for a portion of the property, sharing the costs and fees with other buyers. 

On the surface, timeshares can seem like the best of both worlds: You get a vacation home to visit with family or friends without the hassle of managing the property year-round. 

Like any purchase, there are pros and cons to owning a timeshare. Thousands of timeshare owners are happy with their getaway home-away-from-home, but others can feel like they get trapped into buying. 

Unfortunately, many of those targeted with timeshare offers are unsuspecting seniors who get drawn into a scam. 

Timeshare scams 

One of the most common (and costly) timeshare scams targets those who might be looking to resell their timeshare. According to AARP, the Federal Trade Commission filed almost 191 cases against timeshare resale companies in 2013 alone. 

While there are reputable timeshare companies out there, not all are legitimate. The market is filled with scams that manipulate buyers into payments they can’t afford with no way out, luring potential buyers into a sales pitch presentation with the promise of a free vacation, cash rebate or luxury prize, only for buyers to find out that those gifts aren’t what they seem. 

How resale scams work 

Once the recession hit in 2007, the timeshare market stalled. People didn’t have the money to spend on vacation homes, and many who had timeshares and vacation homes looked to sell. 

With a surplus of those desperate to get rid of their timeshare obligations and a shortage of buyers, timeshare resale scams began flourishing. 

Today, thousands of timeshare owners looking to sell are targeted each year by companies claiming they have a buyer lined up. They con unsuspecting victims with the promise of an immediate sell and a high resale value, asking for hundreds or even thousands of dollars in upfront “closing costs” that will be refunded to them after the sale ends.  

For those desperate to get rid of their timeshare, $1,000 in upfront costs for a $25,000 sale sounds like a dream come true. Once a victim accepts the offer and gives their credit card or bank information over the phone, the company and its fake buyer disappear. 

These scams have become more sophisticated over the years to combat protection measures that have been put into place by credit card companies and law enforcement agencies. 

Some scammers will coach victims through a phony “verification call” that tricks them into acknowledging that there is no buyer. Other scammers will stall the fake sale for up to 120 days to ensure victims will have a hard time filing a dispute with their bank.

Long-term effects of timeshare resale scams 

The short-term consequences of timeshare scams are obvious: Victims lose hundreds or thousands of dollars with little hope of getting their money back. Unfortunately, there are also some long-term financial effects that might be caused by falling for one of these scams. 

Many people assume they’ll get the money they put up for the “closing costs” refunded to them after the sale, meaning they may be willing to pay money they can’t really afford to lose in the long run. 

For those who depend on the lost money for retirement or other financial responsibilities, falling victim to a scam could be detrimental. 

Timeshare scams also can open you up to be victimized for other types of fraud or scams. 

Giving your credit card or bank information over the phone puts all your financial information at risk. These fraudulent companies are under no obligation to securely store your information once you give it to them, making your financial security vulnerable for resale or data leaks. 

Why target seniors? 

Seniors are one of the most heavily targeted demographics for telemarketing fraud, including timeshare and timeshare resale scams. But why do these scams target those over the age of 65 more heavily than others?

1. Seniors are more likely to have disposable income. 

Whether from retirement savings or just a lifetime of building up wealth, seniors are more likely to have the money scammers are seeking. 

Seniors also are more likely to have an empty nest, whereas middle-aged families typically have kids and other financial priorities. 

2. Seniors are less likely to know how to handle the fraud. 

Many scammers depend on the assumption that seniors are the least tech-savvy demographic. 

For a long time, seniors were the least likely to know how to file a complaint online with their credit card company, check their financial records online for fraud or do any online research before buying into a company’s promises. 

This makes seniors a perfect target for scammers. 

3. Seniors are more trusting.

Another stereotype that scammers depend on is that seniors are less skeptical and more trusting. 

According to A Consumer Credit, “Because of the technological hesitancy of seniors, and as a matter of integrity, many Americans over the age of 70 are vulnerable to expert psychological and high-pressure sales tactics used by the timeshare industry.”

This leads to more seniors trusting in a scam that others may be skeptical toward.

See related: First-time fraud victims likely to be hit again

Ways to spot a timeshare scam

Timeshare scams can often be spotted before you’re victimized. Here are a few red flags to watch out for: 

Unprompted initial contact

Very few legitimate companies will reach out to potential customers without having first been contacted by you.

If a company you’ve never heard of initiates contact by phone, fax, email or even direct mail, assume that it’s suspicious activity.

Outlandish promises

Many scammers will promise large rewards or high sale prices if you agree to their offers (whether during the buying or selling process). If something sounds like it’s too good to be true, it most likely is.

Upfront fees

If any company asks you to pay out money upfront, run. This is one of the staples of a timeshare resale scam.

Any legitimate company that will help you sell your property won’t ask for hundreds or thousands of dollars before the sale goes through.

Emotional tactics

No respectable sales company resorts to using guilt or other emotional tactics to get you to agree to an offer.

If you’re feeling manipulated in any way, don’t feel as if you have to give in or agree to what they’re asking.

Tips for financial security

With so many scams and fraudulent companies out there looking to capitalize on travelers’ vulnerabilities, it can be hard to keep your finances safe. Here are a few tips to make sure you’re taking every precaution when traveling as a senior.

Never give personal or financial information over the phone

This applies to any and all personal information: your account passwords, date of birth, Social Security number, bank information and credit card information. Legitimate companies will never ask you to give financial information over the phone.

Keep a tab on your accounts

Most banks and credit card issuers have a way to check your account activity online or through an online app. If you have a smartphone, consider downloading these apps and checking your accounts regularly.

Use your travel credit card

Charge all your travel expenses and any large expenses to a credit card.

When you use a bank account, funds are automatically withdrawn from your account. This makes it difficult to ever recover money if you’re victim to a scam.

Credit cards have protections in place that allow you to dispute a charge if you catch a fraudulent charge or scam within a certain amount of time.

Use trusted companies and resources

Whether you’re simply booking a vacation online or trying to sell your timeshare, use companies you know you can trust.

Most resort companies have resale programs, and many travel accommodations have rewards programs for those who book directly through their sites. This way, you can earn and use rewards to your advantage while keeping your financial information safe.

Do your research

When buying a timeshare or trying to get rid of one, do your research.

Talk to other buyers or sellers. Do a search online for the company you’re thinking about working with to make sure they are a member of the Better Business Bureau.

The more you know going in, the less likely you’ll fall prey to the tactics of scammers.

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See related: Don’t be fooled into falling for these 8 scams


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Updated: 09-25-2018