Watch Out for “Legal” Vacation Timeshare Scams

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

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, 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!