The Need For More Consumer Protection
While federal and state regulation of the timeshare industry has existed for decades, specific rules concerning the resell market still need to provide the buyer with additional consumer protections.
High-Pressure Sales Tactics
Timeshare resort companies are legally prohibited from using high-pressure sales tactics to force you to buy a timeshare membership.
Timeshare companies will sometimes misrepresent and overstate the value of a Timeshare through intimidation and sometimes even make fraudulent claims, all of which are illegal and, therefore, under contract law, can result in the recission of, or the voiding of the consumer’s timeshare contract.
Beware of Common Unlawful Sales Tactics
- Enticing you into attending a timeshare presentation by offering free meals, gifts, or trips.
- Telling you that your timeshare membership will increase in value over time.
- Representing that you can sell or rent your timeshare whenever you wish and effectively without limits.
- Saying that the seller will repurchase your timeshare from you should you be dissatisfied with your membership.
Recent Timeshare Fraud Development – November 2022
In a recent November 2022 development, the Department of Justice (DOJ), working with the Federal Trade Commission (FTC), won a recent victory against timeshare defendants for violating Consumer Protection Laws.
The Justice Department sued five individuals and 11 firms allegedly behind a timeshare fraud scheme that scored more than $90 million from victims.
The defendants, in this case, targeted potential consumers who had already purchased a timeshare and wanted to be legally relieved of any further payment obligations under their timeshare contracts.
Retired Senior Citizens Most Targeted
The defendant companies targeted consumers, primarily senior citizens, by mailing invitations to attend a timeshare cancellation seminar. During the seminar, the defendants represented themselves as one of only a few legally authorized timeshare cancellation companies.
At the seminar, the defendants said they could cancel their existing timeshare contracts for a one-time fee. If not, the company would refund them back their one-time fee.
The defendants were almost always unsuccessful in canceling the consumer’s timeshare contracts and rarely, if ever, refunded the fees back to the consumer.
Beware of Timeshare Resellers – Consider These Consumer Safeguards:
- Use caution with an unknown person contacts you by phone, mail, or email offering to help you sell your timeshare.
- If you receive an offer from a resale company to resell your timeshare, never let them pressure you to decide without performing your due diligence first. This begins with getting as much information as you can from the resale company: their company name, address, phone number, and their business identification number.
- Call your state attorney general and provide them with the above-referenced information. They will check to see if there are prior complaints against the company.
- Always be skeptical of deals that are too good to be true. Stay away from sellers that offer money-back guarantees or use intimidation to get money from you.
- Ask questions and research information regarding the company’s background, history of resale or rental success, and who at the company, if anyone, will handle the closing and at what cost.
- Ask if the company holds a real estate broker’s license in its home state. Check with the state real estate licensing agency or www.arello.com to verify the information.
- Understand that, despite what some salespeople may tell you, there are no guarantees that your timeshare interest can be resold or rented at a particular price or within a certain period. The resale of property is not an overnight process.
- If you have listed your timeshare with a resale advertiser (rather than a licensed broker or salesperson), any buyer or renter inquiries will usually come directly to you.
- You should never pay upfront for a title search or comparative analysis/appraisal. It’s rarely needed need it, and it’s another way for companies to collect advance fees or appear more legitimate.
- Don’t believe solicitors who tell you it’s easy to resell your timeshare at a high price, especially in an unstable and underperforming real estate market. There are plenty of inexpensive timeshares on the market.
- Always resist paying by money order, cashier’s check, or bank transfer. If a company is not legitimate, your money will probably be gone forever.
Fears Of Financial Desperation
Fraudulent Timeshare Sellers Feed on Fear
With financial desperation comes the emergence of unscrupulous companies and individuals that financially prey on people’s financial fears and vulnerabilities, especially the elderly. Consider learning more about financial elder abuse and the financial remedies available to elderly victims of fraud.
Help From Consumer Rights Lawyers
These above examples of illegal sales tactics can also be legally challenged under the laws of fraud and undue influence. Under some circumstances, your attorney may even be able to claim and prove financial elder abuse.
For more information, consider consulting directly with an online Consumer Rights Lawyer and an Elder Abuse Lawyer.
