Over the years timeshare companies have had more makeovers
than any other industry, be it due to changes in regulations or just bigger and
better money-making schemes, here we outline the most common practices you may fall
“Part 1 – Phoney
It is very important that you are aware of the scams these
people are operating. In some cases,
ex-timeshare sales people are setting up phoney legal firms. They claim to be seeking justice for the
consumer with regard to the mis-selling from the timeshare resorts. They make reference to the legal body of
lawyers in Tenerife or Spain in an attempt to appear credible, they may also
provide a CIF number on their web site, which is the Company Registration
number, however on further investigation you will find that they do not belong
to any professional body.
The normal format for these scams is that you will either
receive a letter informing you that your resort has been found to be guilty of
numerous timeshare irregularities and that they are handling the refunds to
clients. The ‘lawyer’ or ‘para legal’ may also call you (as a rule law firms do
not cold call for business). They will
tell you there is nothing to pay, you feel comfortable now, but further down
the conversation you are informed of the ‘legal costs’ required to cover their
part in the hearing, usually around €1200.
A small price to pay for the return of your life savings. A few weeks later they will call you back to
inform you that the case has been successful, and you have been awarded over
€30,000, THE CON – ALL YOU HAVE TO DO IS SEND €6000 TO PAY THE COURT FEES
These fraudulent companies are exploiting the fact that
consumers are now taking their timeshare companies to court and winning. Before you pay any money do your research!
“Part 2 – Double
Dip Timeshare Fraud”
This is where you are conned not once but twice by the same
fraudsters! Initially you could be
called by a company to help you out of your timeshare. Unfortunately, after having paid them money,
and realising that it hasn’t worked, you are then called by another company who
purport to be able to get the money you paid the first fraudsters back, for a
sum. However, they are really one in the
same company and you never hear from either of them again.
Then there is the timeshare company that closes and then
reopens new offices, with new names and new locations, one with fresh ideas and
lots of new and appealing “investment” opportunities and another helping to
relieve you of your onerous timeshare, all for a fee, a percentage of which
will go to the same people who got you into this mess in the first place!
“Part 2 – The
Timeshare Ponzi Scheme”
In short, this is an investment scam! The victims of this scheme are promised high
rates of return for very little or no risk and it is one of the most
sophisticated and potentially damaging forms of timeshare fraud, affecting many
people at once. It is similar to a
pyramid scheme which is supposed to benefit those who invested first and suck money
from those who join later, however in timeshare the only ones to benefit are
those that instigated the scam!
This may involve the buying & selling of multiple weeks,
on the market cheaply as the current owner has died or getting divorced, all
for a quick sale. They can then be
resold at a vastly inflated rate, unfortunately they never sell and nor are you
informed of the massive annual maintenance bill you will incur. The other investment scam is where you do
start to see a return on your ‘investment’, the returns may be small to start
with but it gives the consumer confidence, so they reinvest and then that’s
when it all goes wrong and the scheme sadly collapses and all the ‘investors’
lose their money, except those whose bank account your hard earned money has
been paid into and then no doubt moved off-shore!
“Part 3 – Timeshare
If you purchased your timeshare before 2011 then you may
have fallen prey to companies who fraudulently claimed they could sell your
timeshare for a vastly inflated price.
Usually the consumer was led to believe that there is
already a buyer for their week, sometimes this is the incentive used to
encourage them over to a meeting, along with a ‘free stay’. Of course, there is no buyer, usually the
consumer is met with a lengthy high-pressure selling presentation, where the salesperson
would have various options available:
- Upgrading their current ownership to a more
favourable unit or time of year
- Changing their ownership from 1 large unit to a
selection of smaller & cheaper units, so allegedly easier to sell.
- Introduction to a completely new product,
usually membership to an exclusive travel club in an attempt to circumvent the
need for a cooling off period and therefore take a large if not full payment on
the day, calling it payment for a “reservation”.
- And finally, the “Cashback” or “reclaim” scams,
where purchasers were told they would receive a generous return within a few
years just by returning the ‘certificate’ within a particular timescale. Unfortunately, the timescale was very
particular & if you missed the window of opportunity you got nothing; and
those who did, got only a fraction of what they were promised.
We encourage you to call us if you think any of the above
sounds familiar to you. Remember if
something seems too good to be true, it usually is.
Posted on: August 1, 2019
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 0203 519 3808 or email: info@TimeshareConsumerAssociation.org.uk