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SCAMS IN THE TIMESHARE INDUSTRY
Sadly, the time share industry is full of scams that target owners wishing to sell or rent property.
Be it known that all Century 21 real estate brokers dealing in timeshare property will lose their Century 21 status when their franchise comes up for renewal. Cendant (Century 21) is not renewing any Century 21 timeshare franchises. If you are spending money to sell your property through one of these offices, think carefully. They will not be there in the future.
One common scam is known as "open houses." The federal government has shut down several companies in the past for using this scam. Here’s how it works: Resorts spend thousands of dollars marketing its property to prospective buyers. The resort will not allow another company to come on its property and conduct an open house. The only "open house" that a buyer will see is the one that is provided by the resort. If a company says that it can conduct an open house for you, ask more questions. Most likely the company will have a small sign in front that states "open house". What good is it for a potential buyer to tour a place of business and not the resort? Another question to pose is how will the company get people to show this "open house" to? It is unrealistic and unlawful. Beware of this scam.
Another desperate measure being used to obtain clients is the worthless guarantee. Be aware of this! Many companies will tell you that your property is worth more than it is and will guarantee to sell it in a very limited time. Use your common sense and realize that these companies must have a crystal ball to tell the future. It is easy to determine the resale value of your resort, but no one can guarantee when it is going to sell. The guarantee is only as good as the company backing it. We believe that you know what to do.
The American Resort Development Association developed guidelines for this industry. The reason: the industry had complaints.
ARDA has developed guidelines on resale activities. These guidelines should be followed by ARDA members. The following key points on resale issues are provided for your information.
Appraisals
ARDA member guidelines provide that a firm engaging in time share resale activities shall not require an appraisal of the time share interest as a condition of accepting the listing. (Interpreting Guidelines Section IX)
Some resorts in the past had been known for unethical selling practices. The good news is most of them have cleaned up those practices.
The resale industry is a relatively new industry and scams exist here also. TimeShares-Quick-Sale has been an industry leader for many years. With ethical practices we have forced others to clean up their act in order to compete. Many have not followed. Unfortunately even a few well-known real estate companies that are great for selling homes, with names you know and trust, use unethical practices such as using appraisals, also referred to as a Comparative Market Analysis (CMA)to get you to advertise your time share with them. Those firms are trying to imply that there are no "up-front fees" involved, but you can not appraise a time share. It is not real estate.
Brokers, purported resellers of time shares, are requesting appraisals of CMA's prior to the listing of time shares. Some brokers are licensed and appear to use the appraisal or CMA to induce you to be more realistic in pricing or may use the referral fee from the appraiser as an implicit listing fee. In many instances, you can expect to pay for an appraisal or CMA and end up without an offer for the sale of your time share.
You don't need an appraisal or CMA to buy or sell time share interests and a qualified buyer or broker doesn't need an appraisal either. This is not a $700,000 house with a $600,000 home loan.
Your property was not appraised when you purchased it and does not need to be appraised to sell. If you hear the words appraisal, comparative market analysis, CMA, or anything concerning the value of your property that you must pay for, hang up the phone. Home buyers pay appraisals - not sellers! You are not selling a home. In fact, it is impossible to appraise time share property. The resorts will not even allow appraisers on their property. Call and ask them.
Many companies pop up in this industry and disappear quickly. You should reconsider doing business with any company that has been in the time share industry less than 5 years. And don't let them try and fool you by saying that they have personally been involved. Do your due diligence and research the company. You will often find a lot of misrepresented facts.
If you hear "We have a buyer waiting," … run!
If you have been cold called or telemarketed by a company you’ve never heard of before, call the Better Business Bureau and request a report on them. If there is no report listed on that company or it has a bad report, run!
If you hear "We can sell your property in six weeks or so," then obviously that company has a crystal ball. We believe you know what to do.
Any company that tries to force you to do something right away we strongly recommend caution.
Any company that says something like, "For $799.00 we can sell your property." Then all of a sudden it can do it for $699.00. Then the price drops again to $599.00 and more and more. All the way down to $199.00. We wonder. If it could market property for so little why didn’t it tell you that at the beginning?
Many companies may tell you that your property is worth far more than it actually is just to get you to list with them. Again we recommend caution.
You should also reconsider doing business with any company doing business using a P.O. Box for an address. These are usually very small organizations running out of a house. A reputable company will have a staff of employees working hard to sell your property, not a single individual working out of their living room.
This are some classic SCAMS!
The usual "nice lady" promises that you will receive a check in payment for the sale of your timeshare and asks that, when you have recieivd the check, you pay her the 10% commission for the sale. The bankers check arrives issued by a large bank in Spain which you send into your bank. A few days later the bank confirms that the money is in your account. The nice lady calls again to confirm that you have recived the cheque explaining that it will only take a couple of days to clear - would you please wait for about a week and then send them a cheque for the 10%. You send your check and some three of four weeks later the Spanish Bank check is sent back to you by your bank with the word "FORGERY" stamped on it and the bank removes the payment from your account.
"We understand that you have a timeshare. Do you want to rent it or sell it? - we are the experts" says the smoothie on the 'phone. You like what you hear so the conversation moves forward "But we will need your card number/pin number/account number/mothers maiden name etc. to be able to pay you when the deal is done". You, being a sucker, fall for this and are surprised to get a call from your card company/bank a few weeks later saying that an attempt to remove a large amount from your account is being held pending your confirmation.
This is "Indentity Fraud", using timeshare owners lists, which is growing even faster that timeshare fraud.
A friendly voice on the 'phone offers to help you get back the money promised by a cash back scheme. The friendly voice says that their "legal expert" will ensure that you get back all the money - but to meet him you must go to Tenerife. But they will happily arrange for you to be put up for a weeks holiday at their expense.
On Tenerife you find that the "legal expert" is a salesman who wants you to buy a timeshare - with the promise of all the cash back money back in a few years, which is no better than when you srtated, and you're a few thousand down for a timeshare you don't want.
The charming person on the telephone tells you that you can have a 7 day stay in a luxury apartment in a hotel or resort in Hawaii/Canaries/UK/Bali etc. etc. . All you have to pay is a very modest sum.
You pay.
You pay for the flights.
You pay for the taxi to the resort and present yourself at reception.
"We do have a record of your booking and we are full. Sorry, you must go elsewhere".
"We are processing your paperwork" is the latest scam to avoid the law - a new variation on "The Thumb" (see below)
When you sign to buy a timeshare you are "distracted" from the written statement on the agreement that you have a # day cooling off period.
When you arrive home you find that your copy of the agreement is missing. You ask the seller for a copy and get the response "Certainly, we'll get it to you shortly as we are processing it".
It arrives on day 15 - too late to cancel!
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