Timeshare, as most people know, has been plagued by fraud and malpractice for a long time. This is incredibly sad to see, as we know that the original idea of timeshare was meant to be a positive thing, offering people the chance for great holidays every year. But we are more than aware, unfortunately, that things have turned sour, with countless people falling victim to fraudsters and unscrupulous timeshare companies who have turned the dream of a place in the sun into a nightmare.

We hear from unhappy timeshare holders every day who have been conned, lied to or cheated. These people are stressed, sad, angry and often suffering from mental or physical illness brought on by the strain of their timeshare hell.

Skip to key sections:

 

Our entire ethos is around helping people out of these kinds of situations. With that comes the pressing need to inform and educate as many people as possible about the dangers of timeshare fraud and mis-selling. That is why we have put together this extensive guide, to help you understand all you need to know about the dark underbelly of the timeshare industry, how to spot a scam, and how to avoid falling victim.

Let’s begin by outlining the main types of timeshare fraud that we come across.

 

Timeshare, as most people know, has been plagued by fraud and malpractice for a long time. This is incredibly sad to see, as we know that the original idea of timeshare was meant to be a positive thing, offering people the chance for great holidays every year. But we are more than aware, unfortunately, that things have turned sour, with countless people falling victim to fraudsters and unscrupulous timeshare companies who have turned the dream of a place in the sun into a nightmare.

We hear from unhappy timeshare holders every day who have been conned, lied to or cheated. These people are stressed, sad, angry and often suffering from mental or physical illness brought on by the strain of their timeshare hell.

Our entire ethos is around helping people out of these kinds of situations. With that comes the pressing need to inform and educate as many people as possible about the dangers of timeshare fraud and mis-selling. That is why we have put together this extensive guide, to help you understand all you need to know about the dark underbelly of the timeshare industry, how to spot a scam, and how to avoid falling victim.

Let’s begin by outlining the main types of timeshare fraud that we come across.

The Main Types Of Timeshare Fraud

Cold Calling

When a company contacts you without you having expressly requested it, this is known as ‘cold calling’. It not only refers to unsolicited telephone calls, but also letters in the post, by email, or by a knock at the door.

Those who are approached by cold callers are usually existing timeshare holders, approached on one of these possible fronts:

The first comes in the guise of an offer to sell your timeshare for you. The cold caller often states that they have a ready buyer for your timeshare, and that all you need to do is to pay them a sum of money to be rid of your timeshare for good. It is likely that the sum they are offering is very high, which makes it all the more tempting. However, once you pay that sum, the company will disappear, never to be heard of again…

…that is, until they reappear in another disguise. Having conned you out of money, sometimes the same fraudsters will return for a ‘double dip’ timeshare scam. They will contact you saying that they understand you were conned by a timeshare resale scam and that they are a legal firm wishing to recoup your lost money for you. All they require is, of course, an upfront payment. Again, they disappear into the ether, with another chunk of your hard earned money, never to be seen again.

To avoid falling victim to a cold-calling timeshare scam, remember that no legitimate company will ever contact you out of the blue. Though it is often the case that a timeshare lawyer will ask for an upfront fee to cover costs, never hand over money to someone who calls you without you requesting it. Never forget: if it sounds too good to be true, it probably is.

Resale & Exit Scams

These are similar scams to those we’ve mentioned above, but will not necessarily materialise via a cold-calling scam. There are fraudsters operating online as legitimate timeshare exit or resale specialists, and they may have a professional looking website to go with it.

Rather than disappearing once money has been handed over, however, victims report being furnished with an official-looking document confirming that they have been relinquished of their timeshare and exited from their contract. They think all is well and that they are free, only discovering the fraud when their next maintenance bill arrives and finding that no such exit has taken place.

Cyber Fraud

Fraudsters operating online as legitimate timeshare companies, exit specialists and resale agents all come under the heading of cyber fraud. Sometimes they have fake websites cloned from big brand sites with very similar web addresses. In the guise of timeshare companies or travel sites, they lure people in with unbelievable discounts, only to disappear with all the money you hand over..

This can apply as much to normal holidays as to timeshare. Many people have been fooled into paying for a holiday that simply doesn’t exist, arriving at the airport to find they have no flight, or even arriving in their destination and finding no accommodation.

Extra Week Scams

A company masquerading as your timeshare company gets in touch, usually via email or post, telling you that you have been selected for an extra week at your timeshare. This may be presented as a great sounding discount offer, and arrive bearing all the hallmarks of a legitimate letter from your timeshare company. They will have copied all the branding of your actual timeshare company.

Once you have accepted the offer and paid the discounted price for your extra timeshare week, you will find that your resort knows nothing about it and that you do not have the extra week you thought you’d paid for.

Ponzi Schemes

Ponzi schemes are similar to pyramid schemes, which offer a ‘get rich quick’ solution where you have been ‘specially selected’ for ‘elite membership’. There is a lot to be said about these…

You have been hearing about a fail-safe investment that will make amazing returns on your money in short period time. You know people who have already received great returns from the same investment and who encourage you to invest, so you are considering handing over thousands of pounds before you miss out on the opportunity. Despite what your friends say, it is better to walk away. It is probably a Ponzi scheme. But what is a Ponzi scheme?

Read more about Ponzi Schemes: Caribbean Ponzi Scheme ‘Investment Opportunity’ Settled In Court

What is a Ponzi Scheme?

A Ponzi Scheme is a ‘get rich quick’ investment scam which promises a high return rate with little risk to investors. However, there is no real investment and the fraudsters steal the funds for themselves. Timeshare Ponzi scheme fraud is still occurring now with devastating consequences. When it comes to the timeshare industry, investment in holiday accommodation, such as hotel and apartment developments for timeshare, are the most common vehicles for Ponzi scams. It is important to know what a timeshare Ponzi scheme is, how to spot if you are a victim of this fraud and what to do if you think you have been targeted.

How They Do It

The scammers use various techniques such as advertisements, phone calls, letters, or emails, informing of an investment that offers amazing returns in a short period of time. Investors then pay money into the scheme after falling for the scam in hopes to later reap the rewards, but because the investment vehicle does not exist, there are no profits to be made. The first investors receive their ‘returns’ not from the investment, but from the money paid in by later investors. News starts to spread that the returns are successful, which in turn gives the scheme credibility and encourages more investors to part with their money. Typically the fraudsters will eventually vanish with the money meaning the later investors receive nothing and lose their initial investment.

Are you a victim of a Ponzi scheme?

Whilst Ponzi schemes are not limited to timeshares, all have similar traits to look out for.

  • Offering the opportunity to take part in a new investment scheme, or to attend a presentation about a scheme that promises high returns on investment.
  • Promises of guaranteed returns with little to no risk
  • Investments are not registered with the regulatory body for the industry
  • Details of the investment strategy are not explained or ‘secret’
  • Official paperwork for the investment is not available to the ‘investor’
  • Removing money from the scheme is difficult

What should you do if you are a victim of a Ponzi scheme?

If you think you are actively participating in a Ponzi scheme, break off contact with the fraudsters immediately and do not invest any more money.

If you have given your bank account details, alert your bank immediately.

Keep any written communications you have received from the Ponzi scheme. They may help you give evidence to the authorities.

As with any timeshare that turns bad, it is important to seek legal advice as a matter of urgency. Fraudsters who run timeshare Ponzi schemes make a lot of money by cheating people out of their own money.

If you are concerned you may have been a victim of a Ponzi scheme please get in touch as soon as possible. We’ll be able to help you proceed in the right direction, and offer you all the facts and advice you’ll need to get the result you are looking for.

Malpractice

When a timeshare company employs dubious practices to bring in new members, this is malpractice. In some cases, the level of malpractice can be actively fraudulent or simply illegal. Malpractice in timeshare can take many forms.

Misrepresentation

By their very nature, salespeople are driven to sell. Their drive is likely to be incentivised by bonuses and rewards, as the salesperson seeks to further their own commission by closing a sale. This need to close, when it comes to timeshare, often leads to misrepresentation. Unfair terms in a contract may be glossed over, and the consumer may find themselves put under undue pressure to accept the terms at face value and sign an unfair timeshare contract.

All consumers have the right to rely upon the representations they are given as part of the sales process and, furthermore, to apply those representations as silent riders in the contract.

The difficulty with this, however, is proving what was said during the sales pitch. Unless these were also set out in writing, either in an email, letter or in notes taken on the day and signed off by the salesperson, it is a case of he-said-she-said that is difficult to prove. If you have witnesses who were there and can corroborate these misrepresentations, that helps. If you can find other members who were told the same, even better.

As ever, the best advice is to find a timeshare expert to ascertain whether or not your timeshare contract is unfair, and listen to your complaint of misrepresentation. They will be able to advise you as to what a probable outcome might be, and what your next steps are.

Common Timeshare Misrepresentation Lies

“This is not a timeshare!”

In any kind of arrangement that involves you sharing the use of accommodation, this is a timeshare. Whether the accommodation is a villa, club, apartment, or even a boat, where you use it for a short period of time on an annual or bi-annual basis, you are in a timeshare agreement.

“You can get a Bonus Week (or ‘extra week’) for both you and your friends, on an unlimited basis!”

You would actually be very lucky to even get one ‘bonus week’ a year. These are almost impossible to get, and definitely not available on an unlimited basis.

“This is ‘Gold Crown’ accommodation. That’s the highest quality rating in the exchange system! You will definitely want this for good quality accommodation.”

Many salespeople claim that a resort is ‘Gold Crown’, even though it’s not true.

“Your ‘sleeps 4’ accommodation can easily be exchanged for a ‘sleeps 6’ whenever you need it!”

This is absolutely not guaranteed.

“You can cancel any time, just by getting in touch!”

Once the cooling period has passed, they will definitely not accept a cancellation.

“This offer is only valid if you sign today!”

This is something they tell everybody, every single day. In fact, you could probably get all the same benefits elsewhere at a fraction of the price… they just don’t want you to have time to find this out.

“Your loan repayments will be just £300 a month!”

You’ll probably find this not to be the case when the loan details actually arrive.

“Your ownership will allow you to exchange for another destination anywhere in the world, whenever you like!”

This is almost never the case. Particularly if you buy a low season period, you will find that you are not eligible to exchange for a period in high season. If you buy into a points club, or a floating week system, this is all the more unlikely to be true.

“Don’t worry about reading the paperwork.”

If you aren’t given the opportunity to look over the paperwork, it’s probably because there is something in there which contradicts what they have told you.

“You’re not entitled to a cooling off period… but that’s okay!”

It is the law that you are entitled to a cooling off period. They are legally obliged to give you at least 14 days cooling off period time in which to cancel.

“You only have to pay the annual fees if you use the accommodation!”

Whether the accommodation is used or not, you absolutely will be eligible for annual fees. If your ownership is bi-annual (in the definition of every two years), it may be payable only on those years. But otherwise, those fees will be payable every year.

“The annual management fee is limited by control of the owners, and is limited to the rate of inflation!”

Many resorts have increased fees by three times the rate of inflation in recent years.

“This is a great investment, and will not lose value!”

The price of your timeshare accommodation will plummet at the very moment you sign the dotted line. This lie has left many timeshare owners feeling entirely helpless, as they cannot sell the timeshare at any price.

Illegal and Misleading Timeshare Contracts

In terms of the contract itself, it can be difficult to work out whether you have signed up to an illegal timeshare contract. Contracts are often put together by the resort itself, and designed in such a way as to deliberately obfuscate the true nature of the terms. Even when the contract is completely above board, the language used in legal contracts can be utterly baffling to the untrained eye. Though there are laws in place that say contracts should be written in ‘clear and honest language’, there are still many timeshare contracts that clearly don’t conform to these laws.

Usually, the writers of these contracts believe that what they are writing are reasonable terms, but this is not always the case. With so many contracts being ruled null and void and timeshare compensation being regularly awarded, it’s clear to see that these contracts are often not as reasonable as one might hope.

As a consumer, you have the right to dispute terms or clauses in any contract, or – indeed – the sales process, in front of the Court. The Court will then look into whether the terms of the sale or contract are ethical, fair and legal. The Court will analyse the contents of the terms and conditions of the contract to ascertain the purpose and consequences thereof.

If the Court finds those clauses to be erroneous, unfair and/or unethical in any way, then these clauses will be excluded from the contract. Thus, the resort will be prevented from raising any objection to the actions taken by the consumer in respect of those clauses. For example, if a contract has no end date or lasts for more than fifty years (an ‘in perpetuity’ contract) it is illegal. The consumer will therefore no longer be obliged to continue with the contract as it will be rendered null and void. Return of all sums paid on the contract is additionally a possibility.

Where a clause or series of clauses are found to be unfair and a judgement is recorded against them, this paves the way for future claimants to dispute their own contracts which contain those clauses. This is what is known as a legal precedent. As such, a raft of other claims could be made against any resort or timeshare company based on the ruling of that original case, putting a timeshare resorts entire business in jeopardy.

If any of the timeshare fraud or illegal timeshare practices sound familiar to you, it is vital that you seek legal advice at the earliest possible opportunity. The longer it goes on for, the more difficult it can be to assert your rights, not to mention the ongoing stress and financial strain you’ll be experiencing as a result of this mistreatment. To get impartial and obligation-free advice, get in touch with our team of timeshare experts who will be able to help you.

Pin It on Pinterest