Timeshare trap: 6 tips for avoiding a fractional ownership tragedy

by Steve Cousino on May 16, 2008

It’s a classic come-on. You’re on your Vegas vacations, ready to try your luck at the casino tables or catch Bette Midler’s show, when a clipboard-toting salesman materializes in front of you. How about a pair of free tickets, he asks. All you have to is sit through a 90-minute timeshare presentation. What could go wrong?

Everything, actually.

If you’re not prepared for what’s ahead, you might end up owning a the wrong timeshare. There’s no shortage of complaints about timeshare companies and their programs, meaning all too often people allow themselves to be caught up in the moment and get involved in timeshare ownership without being fully aware of the facts. If you know what you’re doing, and you take steps to prevent yourself from unscrupulous companies, you can avoid the emotional and financial hardship that some experience.

The timeshare business has been around in one form or another since the 1970’s. According to a 2007 ARDA International Foundation study, the domestic timeshare industry has grown from a $2.2 billion business in 1996 to $10 billion in 2006. At last count, there were 1,615 resorts across the United States representing 176,232 units.

Timeshare properties are typically found in vacation hotspots like Branson, Cancun, Las Vegas, Myrtle Beach and Orlando. Many of the companies that promote timeshares are legitimate. But if you don’t know how timeshare presentations and the incentives offered work, you stand a chance of being scammed or persuaded into purchasing something with your guard down — a decision you may later regret.

Timeshare complaints are generally made to the Federal Trade Commission (FTC) and the Better Business Bureau of the state in which the company operates. A quick search can yield dozens of complaints for various reasons, and in fact, the FTC’s 2007 list of top consumer fraud complaints puts timeshare and related operations in 9th place, representing two percent of the agency’s complaints.

A good number of travelers are faced with the option of attending a timeshare presentation while on vacation or they’re enticed to take the vacation in the first place in order to attend the presentation. All too often, they get caught up in the emotion of the moment and make a purchase they later regret, and have little to no recourse to get out of it. Here are some tips to help you avoid timeshare scams while on vacation:

1. Don’t buy on emotion. No matter what arrangement you are presented with, dom’t commit to purchase a timeshare while at the presentation unless you have already researched the pros and cons of timeshare ownership. It’s certainly not for everyone, and the financial investment must be considered carefully. If you can, take the material home and take the time to read through it and fully understand what you’ll be agreeing to.

2. Freebies are not always free. Prizes and incentives offered as part of a presentation may have “fine print restrictions.” Know what they are before you accept them. Also, many timeshares come with a period of time, from three to five days, where the purchase can be canceled with no penalties (a ‘rescission’ period). These recession periods are governed by state law. To find out what your state’s requirements are, call the Attorney General’s office or visit the department’s Web site. If you take advantage of a benefit of being a timeshare owner during this recession period, you void any right to cancellation. A benefit can be something as simple as discounted show tickets. A good rule of thumb: if you are asked to pay for anything, say, “no, thank you.”

3. Read what you’re signing. Read the timeshare contract and have it reviewed by an attorney. If the sales person promised you something that’s not in the contract, don’t sign the contract. Some timeshare companies provide a ‘verification officer’ to go over details of the contract with you. Pay careful attention during this time, and make sure you read every word of the contract. You never know what you’re agreeing to if you don’t read it. Note: some companies do not allow you to leave the presentation with a copy of an unsigned contract. If this happens, it’s a clear signal that something isn’t right, and you should leave as quickly as possible. Outside the United States, especially in Mexico, it is important that the attorney you enlist for help is familiar with the laws governing timeshares in that country. Travel agency owner John Frenaye of Travels With Fred in Annapolis, Md., had a client who thought he was purchasing a timeshare for 30,000 pesos when it was actually $30,000. The contract he signed was in Spanish, and after some investigation he ended up chalking the experience up as a bad decision.

4. Remember, you DON’T have to take it. Most timeshare presentations involve high-pressure sales tactics. If you don’t think you can handle it, don’t go. Also, if the presentation makes you uncomfortable for any reason, get up and leave politely. Don’t let the salesmen argue with you or convince you to stay. Some clients of travel agents I know have left, only to have the salesmen follow them out, and every once in a while salesmen have been known to yell at the departing customers, and even getting rather crude with their statements. It pays to research the company hosting the presentation to find out if they have issues like this with their sales staff.

5. Research! Research! Research! A timeshare is a real estate investment. It’s important to treat it the same as if you were buying a home. Don’t purchase one blindly. Do the research, and know what you are purchasing.

6. Save it for another day. If you decide to attend a presentation, refrain from doing so on a honeymoon or other special occasion type of vacation. While on vacation, your guard is down, but on a honeymoon or other special getaway, your guard is down even more. Besides, who wants to waste three hours in a presentation on their honeymoon? Laura Frazier, of Bliss Honeymoons in Columbus, Ohio, frequently encounters brides who are lured in by a “free honeymoon” as an incentive for attending a company’s product demonstration. The fulfillment company for the ‘free’ honeymoons has a poor reputation with the Better Business Bureau, and many of their practices raise red flags.

Timeshare ownership has many benefits as well as drawbacks, and should be carefully thought out by the potential buyer. When you’re on vacation, or if you’re unprepared about what to expect, the entire experience can result in disaster. If you leave emotion out of the purchase, know what you’re signing, and are prepared as much as you can be, you can successfully skirt a timeshare tragedy.

Steve Cousino is an independent travel agent based in Branson, Mo.

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  • mindy

    Every client I send to Mexico gets the following in his/her travel documents:

    REAL ESTATE AND TIME-SHARES: U.S. citizens should be aware of the risks inherent in purchasing real estate in Mexico, and should exercise extreme caution before entering into any form of commitment to invest in property there. Investors should hire competent Mexican legal counsel when contemplating any real estate investment. Mexican laws and practices regarding real estate differ substantially from those in the United States. Foreigners who purchase property in Mexico may find that property disputes with Mexican citizens may not be treated evenhandedly by Mexican criminal justice authorities and in the courts. Time-share companies cannot be sued in U.S. courts unless they have an office or other business presence in the U.S. Consumers should contact a Mexican attorney, the Mexican consumer protection agency PROFECO at http://www.profeco.gob.mx/ or other consumer information agency for information on companies that operate outside of the U.S.

    http://travel.state.gov/travel/cis_p…s/cis_970.html

    This is from the uS State Department website per above.

  • http://notravelmlms.blogspot.com John F

    I have yet to see a time share presentation that on the surface looked like a “fair deal”. They all looked too good to be true.

    And it has been proven out time and time again, when something seems too good to be true, it likely is.

    A friend of mine has a time share through “RCS”(?) I am not sure of the name but it is initials. She made a res for CUN at the Xpu Ha Palace for mid June Sat- Sat. Well, the airfare was essentially not available on those dates (lowest price was $1200 per person) so she tried to move it to Sun-Sun (airfares were down under $400) and the time share company (that claimed you could use the properties “anytime” you wanted to vacation, told her that the increase in the price was $1950 for the week.

    Now she already paid $1500 for the trip in addition to her annual fees. So this trip is gonna cost her $3900 if she goes Sat-Sat and $4200 if she goes Sun-Sun.

    I can buy that same trip through a tour operator for $3584. So where is the bargain? Granted, I cannot get airfare for her dates because they are close in, but that rate is for late June.

  • Jim

    Timeshares are a total and complete rip-off! I don’t know of any decent financial counselor that will tell he/she made money on a timeshare.

    Just do what I did – attend the presentation for 1 hour, take the free tickets, say no, and leave. Worked for me. That was 20 years ago. Nowadays, I wouldn’t even waste the time.

  • Hgarden

    Years ago I bought a timeshare from a couple that simply wanted to get out of paying the annual maintenance fees, so I offered them $1,000 (they were asking $6,500) and they took it.  Fees started out at $299/year, which was great for a gulf of mexico resort, and I traded it easily for trips all over.  15 years later maintenance fees are over $1,000, which is more than it would cost for me to rent a condo for a week in many areas.  I’m having trouble giving it away myself, have listed it for sale as best offer, and am tired of the maintenance fees and special assessments.  It was great for about the first 10 years but never would I do it again.

  • http://www.timesharerelief.co.uk/ cancel timeshare

     Thanks for this tips. This is what timeshare buyers need. It will be their guide in buying. There are timeshare deals that fall into scams, so it is better to be aware of this matter.

  • http://www.timesharerelief.co.uk/ cancel timeshare

     Thanks for this tips. This is what timeshare buyers need. It will be their guide in buying. There are timeshare deals that fall into scams, so it is better to be aware of this matter.

  • http://www.facebook.com/AltarEarth Thomas Bowman Jr

    Wow! I agree and disagree. Personally I wouldn’t attend a presentation for “show tickets”. But to save $1500 and stay at a 5 star resort, I would. There is a huge difference in professionals offering a timeshare presentation along with a major resort chain.

    Most of the lies and cheating are from low end sales people that get NO benefits or even paycheck if they don’t send people. These are subcontractors and are promoters from a third party like a marketing company. This is part of the reason why there are so many complaints.

    Plus if you sign a contract that is in Spanish and you don’t know Spanish… Please don’t sign things without reading them. The person handing you that contract and knowing that it is false, should be reported.

    Also, are there no requirements on these presentations? My company promotes some of the top timeshare promos in Mexico and soon the Caribbean. Are customers save up to $2000 on their vacations for attending a presentation. And we have a forum where they can report how their vacation went. Plus they have to qualify for the promotion by meeting 4 major criteria.

    It’s not a handout or a free vacation! Our customers are “PROSPECTS” and they are treated that way. Our resorts know about these complaints and set rules for the promotion of these offers. If you attend a resort through us we will back YOU! We will not tolerate a 5 star resort misbehaving!

    We have sincerely set out to change the way these offers are promoted and please don’t think that there are no good offers in this market. If timeshares were really completely bad, Americans would not own over 8 million interval weeks. And there wouldn’t be world timeshare banks where consumer trade, bank, or sell weeks. There are reputable companies and ones that hurt us all!

    We are All Inclusive Vacation & Travel and we are on 50 social networks, have a forum, and can be found just about anytime for comments or questions! A quick search will reveal us to you!

  • Charles Berger

    Timeshares have always been a bad buy. But for those who really feel they need one I make some recommendations: Never buy from the developer, and know how to buy a timeshare. Always wait for timeshares to appear on the secondary market, usually at half-price. People like you get excited at the new developments and jump right in, only to become disillusioned later and dump the property onto the secondary market, at a loss, for a patient, informed buyer to take advantage of.

  • http://www.timesharescam.com/ Harriet Mendler

    Over the last years, and due to the increasing number of complaints and scams perpetuated in the industry, timeshares are often related to touristic frauds. Unlike traditional rentals or hotel reservations, where the customer has the option to choose where to stay at and how much to pay, timeshares require a big initial payment.
    Timeshares are also very criticized for being overpriced and for the ever increasing maintenance fees, add to that the fact that timeshare reselling is almost impossible. Nevertheless, what has injured the industry the most are the aggressive sales practices. Timeshare presentations are high-pressure, long lasting and deceitful. During a timeshare presentation, it is not recommendable to trust on the verbal promises told by the timeshare salesperson, because those promises don’t really answer the question, how do timeshares work?

  • http://www.timesharescam.com/ Harriet Mendler

    Unfortunately, the grand majority of the timeshare sales are made under high-pressure sales tactics, and that is one of the biggest complaints timeshare scam victims have. Figure it out, why would a timeshare company give you fantastic gifts and free meals just to attend to a timeshare presentation? Very simple, they will do everything that is possible to sell you a timeshare during a 4 hours
    presentation. Is the free breakfast
    worth it?
    Think about it.

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