They may not always break the law but timeshare scams can mislead and cause you stress: Internet Scambusters #439
Overseas travelers and even visitors to some US resorts will soon face the annual ritual of timeshare scams.
As many soon discover, sales reps don't necessarily have to step outside the boundaries of the law to assail their victims. And the pressure to buy can be impossible to resist.
In this special issue, we have a first-hand report of the ordeal from a Scambusters team member, plus some additional insights into what to look out for on your vacation.
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Let's get started...
Watch Out for "Legal" Vacation Timeshare Scams
As we head into summer and the vacation season, one thing we can be sure of is that timeshare scams will be in full swing at airports, hotels and resorts around the world.
Trouble is, as many vacationers often discover, the tricks many timeshare operators use to lure victims into their web often are not illegal, though they may be misleading.
And, once you're "trapped," by which we mean enticed into a presentation, it can be difficult for all but the strong-willed to emerge without buying.
We've already explained how timeshare works and some of the most common scams in an earlier Scambusters report, Timeshare Scams.
So, in this special issue, we're looking not so much at crooked timeshare scams as the legal but perhaps dubious "tricks of the trade" you should be on the lookout for when vacationing.
Let's start with a report from the frontline -- when one of the Scambusters team took a winter trip to Los Cabos in Baja California, Mexico.
Of course, since he was taking it easy while the rest of us were working, he doesn't expect sympathy! Here's his report:
"We booked an all-inclusive resort, including airport transfers, with a leading travel agency, who warned us to beware of the timeshare reps at the airport.
"We've encountered them in airport concourses before but weren't ready to be hijacked right next to the baggage claim and customs area where someone who appeared to be either an airport official or taxi marshal stopped us, asked the name of our hotel and directed us to a desk, supposedly for that hotel, where a clerk said he would summon our taxi.
"He appeared to make a phone call and said the taxi would be along in a few minutes. While we were waiting, he thought it would be a good idea to tell us about another hotel in town, and began a spiel that quickly revealed him as a timeshare rep -- including offers of $250, free breakfast and a pick-up just to make this visit.
"We escaped him, ran the gauntlet of other more traditional solicitors, and found our taxi outside, where it had been all the time. There had been no call from any clerk.
"Arriving at our hotel, we headed towards the check-in but were redirected by a doorman to our 'personal concierge' who sat at a nearby desk. He told us his job was to ensure we had a trouble-free stay.
"He ran through the hotel's facilities, telling us what was included in the price and what wasn't. The non-included items included gala dinners, car rentals and special excursions.
"But, hey, he could arrange for all of these for free if we would spare him a maximum of 90-minutes to tour the hotel and learn about a special accommodation deal.
"And, no, he assured us, this wasn't timeshare. It was a membership program that would allow us to stay at this and other hotels for next to nothing, for the next 20 years. And it wouldn't be a presentation, just a tour and a chat.
"All I had to do was agree that if I was persuaded to take membership, I had no financial impediment to doing so. Oh, and did I have my credit card with me?
"Well, I wanted a free car rental, and how bad could 90 minutes under the grill be?
"I won't go into all the details but when, a couple days later, we did the tour, we were then taken to a room where other people were undergoing a similar ordeal, all of us being told there were only 100 club memberships on offer, while a 'counter' on the wall told us they were up to Number 92.
"Another colleague joined our 'concierge' to bamboozle us with an array of numbers that supposedly proved what a great deal we were being offered, for just $10,000. Well, he said, he could throw in a few more incentives if we weren't convinced.
"Meanwhile some kind of fanfare sounded repeatedly as people supposedly signed up for the deal and others -- what were they doing there? -- stood up to deliver personal testimonials about what a great club it was.
"Finally, we were subjected to a high-pressure sales talk, the implied bottom line of which seemed to be: Why would you not want to do this? Are you some kind of idiot?
"At this point, three hours after the start of the tour, my wife and I got up and walked out, much to the consternation of our 'concierge' who we hardly ever saw again.
"I did, however, get my free car rental.
"Later, my wife discovered online that these so-called memberships were being offered as resale timeshares by earlier victims for a mere 30% of the price we were asked to pay.
"We also learned from others that when timeshare hotels offer you cash as a presentation incentive, what you probably will get are vouchers you have to spend at that hotel. They're worth only a fraction of their face value.
"Finally, others who had been members of the hotel 'club' for some time, later told us that it was virtually impossible for them to reserve rooms, either at this hotel or through an exchange program, at other locations during peak seasons like school vacation weeks."
Resale Timeshares Glut
Some interesting lessons there, but note that nothing illegal seemed to take place. Would a reasonable person conclude this experience fit a definition of timeshare scams? You be the judge.
And the fact that memberships were being advertised online as resale timeshares at huge discounts suggests others who couldn't resist the pressure later regretted their decisions.
In fact, the glut in resale timeshares has spawned another questionable tactic in this marketplace: companies charging an upfront fee of as much as $5,000 to find a buyer.
Often, the crooks behind these timeshare scams claim to have a buyer already lined up and that the money is for a supposed processing fee.
They want payment by credit card or wired cash, after which they're never heard from again.
According to the financial website MoneyWatch.com, complaints about this type of resale timeshare scam have rocketed 40% in the past year.
The Federal Trade Commission (FTC) has published a guide to using timeshare resellers: Selling a Timeshare Through a Reseller: Contract Caveats.
Some important conclusions from this week's report:
Timeshare isn't just about buying a stake in a condo or an apartment; increasingly these days it involves buying an entitlement to a hotel room.
Timeshare sales people are paid mainly by commission; some of them will use every trick in the book, including pretending to be someone they're not, to get you to a presentation.
The resale timeshare market is a quagmire, with more sellers than buyers and consequently more desperation to sell -- just what the scammers want.
And from our intrepid Scambuster reporter: "The free car rental wasn't worth the stress we went through. We were lucky to escape with our credit card intact."
So before you say "yes" to an invitation, realize what's going to happen, go into it with your eyes open and a clear idea of whether or not this is something you're really interested in.
If it is, fine. If not, make sure you've read our earlier report on timeshare scams and think twice about how badly you need those "free" deals.
Time to conclude for today -- have a great week!