Are you skeptical about entering into a timeshare agreement? Do you want to do your research before you either sell or buy a timeshare condo or property? Well, your skepticism is justified. According to numbers released by the FTC, timeshare scams ranked among the top-most frauds for the year 2017.
These frauds have been increasing over time, and now rank as the biggest threat to travel security within the US. Buyers are often subjected to the tyranny of these frauds, as they are drawn into the flawed promise of a shared paradise, which later turns out to be nothing less than an abhorrent scam. The ‘great slice of paradise’ that they were promised, turns out to be a vacation-spot that they can only go to for one week during the year.
What is a Timeshare?
Before we get into the depth of timeshare scams and how one can avert the risks involved, we will first provide an in-depth explanation to what timeshares really are. Not everyone is equipped with correct information regarding property lingo, which is why this explanation would clear the doubts, if any.
Timeshare industry started to rise back in the 1970s. What started as a way to assist wealthy homeowners with tourism, has now grown to a $9.2 billion booming industry, according to numbers revealed by the American Resort Development Association. The idea behind this new form of property exchange was to give condo developers an option to sell one unit to multiple individuals at one time.
Buyers were awe-struck with the possibilities of this deal and wanted to be a part of this venture. They could now own a part of a luxury condo, without having to splash much of the green inside their pockets. Rather than having to pay a full price and look after the property during the whole year, buyers could now buy a portion, much like it is with stock exchanges. Multiple buyers had shares inside the condo, and shared the fees and costs with each other.
Vacationers and tourists found timeshares to carry the best of both worlds. These properties gave them a chance to enjoy a secluded vacation, without having to visit or take care of the holiday-home all year round. In this air of joyous buying, no one suspected anything to go wrong. But, like every property purchase out there, timeshares to have their own pros and cons.
Over time people started realizing how they were trapped into buying, and their deserved amenities weren’t given to them. This led to the rise of timeshare scams, as providers let their hunger for more money take over the good of the service they were providing. Unsuspecting seniors were the first to be targeted, as they were easy victims. The list of victims has grown over time, and it is time enough now that people were made aware of how these horrendous scams can be averted.
Read on to find more about avoiding these scams.
Timeshare Resale Scams
Once the recession of 2007 hit buyers in the USA, the market for timeshare stalled. People didn’t have the money to invest in timeshare homes anymore, and those who were already left with timeshare vacation homes started looking for buyers to sell them to.
Hysteria soon ensued in the market, and sellers were left grappling for buyers to their timeshare properties. And, if financial history has ever told us something about financial scams, it is that these scams tend to rise during moments of hysterical selling.
Ever since then, individuals looking to sell a timeshare property have been targeted by companies who claim to have a list of buyers lined up. These companies charge an upfront cost for the quick process, which sellers are more often than not, very excited to pay. For someone looking to get rid of a $25,000 timeshare property, a $1,000 upfront cost is nothing. Once excitement takes over the sellers, they give their bank and credit card information over the phone, after which the company disappears with their fake list of buyers.
These scams have become sophisticated over time, to avoid the measures most credit card companies and banks have in place to avoid scams.
Senior/retired citizens from across the country are becoming victims to timeshare and timeshare resale scams. Although seniors are known to be unsuspicious, there are numerous other reasons as to why seniors tend to be the most targeted. Here are some of them, which can help any senior reading this article up their game, to be safe from these scams.
Disposable income is the ultimate goal that these scammers target. You’re worth nothing to them, until you have disposable income to spend on luxuries. Scammers know that seniors have just had their retirement funds given to them, and they have sufficient income to give to them. Thus, seniors become the gold standard for scamming victims.
Handling the Frauds
With the rapidly changing pace of technology, seniors come across as less likely to know how to handle frauds. Someone, like an energetic tech-savvy youth, would know how to handle any scam and would have the authorities alerted immediately. Seniors, on the contrary, are still not on track with these procedures. It took seniors a long time to know how to file a complaint with their card company and check their financial records among other things.
Another stereotype that scammers feed upon to target seniors is that they are usually more trusting than other members of the society.
A consumer credit report mentioned, “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.”
Thus, this attribute puts seniors as more trusting towards timeshare properties than a younger individual would be. Skepticism is not something that seniors can really boast of, and as we assume you probably know by now, skepticism can often be a good thing.
Ways to Spot a Timeshare Scam
Now that we have covered all the facets related to timeshare scams and have discussed everything necessary for prompting you to action, we will now get towards discussing how you can spot a timeshare scam.
As much as scammers try to hide the scam, there are always a few red flags that give the game away. The earlier you spot these red flags, the more will be the chances of you avoiding the scam. Go through some of these warning signs, and cut off contact in case they do happen.
Unprompted Initial Contact
Very few, we repeat, very few financial companies reach out to you themselves, without you having contacted them first. If you get such an unprompted initial contact, then chances are that the company in question is not one that can be trusted.
Moreover, be aware of what you’re stepping into. Do not reach a final conclusion until or unless you have researched about the organization and are sure of their legitimacy. There are many resources that help individuals find about the service that a financial company is providing, and how their customers have reviewed them. Do not fall for company that has no online presence, because the writing is clearly on the wall with them.
The biggest giveaway of a scammer is that they give outlandish promises to try and cash on your greed. Any company representative talking about high returns and good sale prices during the first call is not to be trusted. Many a time, buyers are given unbelievably low buying rates and sellers given unbelievable high selling rates.
The opportunity to save some or gain some bucks pulls these buyers into the scam. Try to do some research on your own end, and find out if the figures they are quoting for a timeshare property are possible or not. If their offers and bargains sound too good to be true, then they most likely are. Remember to not fall for any outlandish promises.
Getting to the most important point, no respectable company would ask for upfront fees to either sell your timeshare property, or buy you one. Upfront payments should come across as a warning sign for you.
No company selling your property or buying you one would ask for hundreds or thousands of dollars upfront, before the sale or purchase has even materialized. Don’t let yourself be blown away by the concreteness in their promises, because some of these salesmen can surely sell you a fig for a thousand bucks. Be aware of their shrewdness and don’t fall for it.
Finally, if you have not shown any signs of falling for their tactics, the scammer would try to draw you in through emotional means. They will resort to using emotional tactics and call to actions involving guilt. Don’t let yourself fall over for these emotional tactics and try to remain steadfast on what you consider as best for yourself.
If you feel that you’re being emotionally manipulated in one way or the other, then back out of the process at the earliest. Don’t let the sale linger on, if you feel that way.
Tips for Financial Security
Having given the tips on how to identify a shaky deal, we will get to mentioning tips on how to ensure your financial security at all costs during a timeshare deal. These financial security tips can be followed at all different financial transactions, including a timeshare as well.
Never Give Financial or Personal Information over the Phone
This applies to all kinds of personal and financial information. Never give any private information to someone over the phone. Your account passwords, social security number, date of birth, credit card information and bank information should all be safeguarded. Moreover, legitimate financial companies would never ask you for your financial information over a call. They respect the privacy of your financial information, and realize that asking for such information over the phone can be an infringement of that privacy.
Keep a Check on your Account
Keep tabs on your accounts and always keep look out for any discrepancies. By keeping tabs we mean that you should always check account statements and other account activity both online and offline. See, if anybody has incorrectly taken funds from you. Report the discrepancy to the card issuing agency at the earliest in the case of a fault.
Use Trusted Companies
Moving on, I guess we need to establish the fact that you should only deal with companies that can be trusted. Do not deal with agencies that sound bogus or cannot be trusted in any way. Whenever you are buying or selling a timeshare, try to go for trusted companies only.
How to find out whether a company is trusted? Go looking around for referrals from friends and family, and see if anyone of them has ever had such a transaction before. Research the internet and only go for options that have multiple positive reviews. Do not be won through one positive review, and look for more than 5 to 10 positive reviews. Make your decision on facts, rather than intuition.
Consider Timeshares like any other Real-Estate Investment
Finally, one reason why most sellers/buyers succumb to scams and other external forces is because they don’t treat timeshares like they would treat any other property. The reason why we have more scams in timeshare than any other kind of property is because users display a certain kind of complacency. Put it on excitement or any other factor, but such hysteria can lead to catastrophic results. Never get blown away by the excitement and take proper legal procedures and other research into consideration before buying or selling any timeshare property. Scammers are afraid of legal processes, which is why staying on the right side of things from the word go is advised.
With the information from this article up your sleeves now, you can save your interests in a better manner, and protect yourself from scams of all sorts. Implement the tips in your daily life, and keep scammers of all sorts at bay.