Timeshare exit scams are on the rise. Ever-escalating fees and changing vacation habits leave many owners wanting to ditch their timeshares. Scammers have caught on and are using that desire to separate their victims from their money.
Timeshare contracts typically contain perpetuity clauses that tie owners to their timeshares for life. It’s difficult and sometimes impossible to return, sell, or even give away a timeshare you don’t want.
There are legitimate timeshare exit companies. They can’t guarantee success, but they’ll give you a straight story. There are also scammers. They’ll take your money and give you nothing, leaving you a victim of timeshare exit scams.
Frustrated owners often become easy prey for timeshare exit scam companies. These companies offer to help owners dispose of their timeshares, asking large upfront sums. They don’t deliver, and owners often find themselves deeper in debt, with their credit trashed and potentially facing lawsuits.
Victims have been complaining to the Better Business Bureau (BBB) about getting robbed by a timeshare exit scam. Between 2017 and 2019, the St. Louis BBB got around 350 customer complaints, all directed towards several timeshare exit businesses that had fleeced hapless victims of more than $2.2 million.
How can you avoid being the victim of a timeshare exit company scam? For starters, you can learn what typical timeshare exit scams look like and what the most notable red flags look like.
👉 Learn more: For those entangled in timeshare agreements, this post sheds light on how to step out legally and smoothly.
How Does a Timeshare Exit Scam Work?
Even though there might be slight differences from one case to another, the broad strokes are usually the same. So, timeshare exit scams more or less look like this:
1. Initial Contact
There are two methods that timeshare exit scam companies will use to initiate contact. Both of them should raise immediate red flags.
They Call You 📞
Many timeshare exit scams start with a call from a representative working at the exit company. The representative will not only know that you own a timeshare but will also be aware of when you bought it, which company sold it to you, and several other details that might surprise you.
How does the representative know all of this?
Odds are one of two things happened:
- The representative has found you by going through real estate records.
- You posted somewhere online that you wanted to sell your timeshare, and the company found you through that.
In either case, the representative reaches out to you and makes an appealing offer.
🚩 The red flag: No legitimate timeshare exit company will call you. They will wait for you to initiate contact.
They Bait You Into Calling Them 📞
Advertising is a normal business tactic, and legitimate timeshare exit companies do advertise. So do scammers. So what’s the difference?
An ad from a legitimate company will not guarantee results. They may tell you that your case will only be accepted if you meet certain criteria or that they will only work with certain resorts.
A scammer will promise the moon and assure you that they can solve your problem before they even know the details of your contract.
🚩 The red flag: If it sounds too good to be true, it’s probably not true.
2. The Sales Pitch
Once a salesperson has you on the phone – and scammers prefer to use the phone – you’ll hear a persuasive and compelling sales pitch. They are professionals, and they know how to persuade.
Scammers use several pitches.
- Contract cancellation. This is a legitimate tactic, but no legitimate company will promise success without examining the details of your contract and case history. If they tell you that they can get any contract canceled, it’s a scam.
- Easy sale. Many scammers promise that they can sell your timeshare for an attractive price. They may even say they have willing buyers. It’s not true: most timeshares have near-zero resale values.
- Other tricks. Scammers may promise to donate your timeshare to a charity, sell it to a dummy LLC, or some other gimmick. All of these have one thing in common: they don’t work.
Scammers may try to woo you by offering you dinner or promising a free iPad for attending a presentation. This is a warning sign. If they are truly offering you a valuable service, they shouldn’t be buying you dinner or giving you free stuff (in most cases, the tablet will be a cheap knockoff).
If the carrot doesn’t work, then the representative might try the stick. For starters, they will throw a ton of statistics and numbers to scare you. But many of their figures are inaccurate and misleading.
Guilt is a popular maneuver. Timeshare exit scammers may tell you that your children will be forced to inherit your timeshare (not true) if you don’t act quickly to get rid of it.
👉 Learn more: For a clearer understanding of identity theft scams and protective measures, this post might be a good starting point.
3. You Will Be Asked to Pay an Upfront Fee
Feeling that he has you on the hook, the representative will ask for an upfront fee that could reach thousands of dollars, if not tens of thousands. He’ll promise you that as soon as you pay the money, the company will get to work for you, and you’ll get rid of the timeshare in no time.
4. Reality Bites
Since you’ve already bought into the importance of hiring the timeshare exit company, you will pay whatever they ask you to, hoping they will get you a decent sale price. In return, the representative may advise you to stop paying your maintenance fees and that they’ve got this covered.
The problem is that in most timeshare exit scams, the company does nothing.
When you stop paying your regular fees, you won’t be helping the exit company. You’ll be defaulting on a contractual obligation. Your credit will take a hit, you’ll face collection actions, and the resort could even sue you.
And to add insult to injury, the timeshare exit company might have the gall to ask you for more fees to finalize a few more details and finally rid you of your timeshare. By now, you’ve probably figured that they’ll never really rid you of the thing, but some people keep paying.
👉 Learn more: Weighing the pros and cons of investing in a timeshare? Here’s a deep dive into some of the concerns to be aware of.
Real-Life Stories of People Who Got Swindled
Now, if you feel that everything said so far is hyperbole, let me introduce you to Ed Roach, whose tragic story has made it all over the internet.
Ed got a phone call back in 2017. The caller claimed to work with a company affiliated with his original timeshare seller, Wyndham Resorts. Obviously, Ed was curious.
The caller invited Ed to a seminar on how timeshare policies had changed over the past few years, and Ed, the responsible timeshare owner that he was, agreed to attend. Besides, Ed had a free iPad to look forward to at the end of the seminar.
Once Ed showed up to the seminar, he was bombarded with every high-pressure sales tactic mentioned above, including, of course, the “your children will inherit this debt” line. Sadly, Ed caved to the pressure and agreed to have the exit company sell his timeshare for him.
What makes this story alarming is that the firm asked Ed to pay $25,000 upfront, and Ed, overcome with fear, relented.
However, after Ed forked over his hard-earned cash, nothing happened. He even waited a week before reaching out to the firm and was surprised to learn that no one over there even knew that he had signed a contract with them just a few days ago.
To make matters worse, the timeshare exit firm had no connection with Wyndham Resorts whatsoever, and they refused to refund his money, Ed becoming one of the many victims of timeshare exit scams.
Other Timeshare Horror Stories
While Ed’s story may seem extreme, it’s just one example of the many timeshare exit scams out there. Surprisingly, there are many more stories just like that on the internet. Here are a few just to get an idea of the scope:
- A group of timeshare exit companies, most of which were operating under the umbrella of a company called Consumer Law Protection, stole more than $90 million from senior citizens.
- Another company called Real Travel, Inc. was found guilty of fraud and charged a penalty of $500,000.
- In Las Vegas, a man was sent to jail for more than a year and a half for scamming more than 1,000 timeshare owners out of $780,000.
This is the tip of a large iceberg of timeshare exit scams. These companies are everywhere, promising relief to desperate timeshare owners and then fleecing them.
So, How Can You Avoid Falling Victim to One of These Scams?
You can protect yourself from timeshare exit scams. Here are some ways to do it.
Start by Looking Out for Any Red Flags
Several telltale signs could indicate that something is not on the level.
For starters, legitimate timeshare exit companies will never call you out of the blue. You have to initiate contact first. If the representative knows intimate details about you and your timeshare without you sharing any of them, the hairs on the back of your neck should be up at attention.
Also, be careful if anything sounds too good to be true. If someone calls you up and tells you they already have a buyer lined up, they’re probably fibbing. Similarly, if they swear that they’ll sell it for you at a profit, you should hang up quickly because that’s not how the timeshare market works.
If you see an ad that promises relief for all cases, no matter what, don’t call.
Watch out for misguided advice. For example, although timeshare exit companies might tell you differently, you should never stop paying your maintenance fees until you are certain that you are no longer the owner of the timeshare. There will be consequences.
The biggest red flag is being asked to pay excessive fees upfront. Additionally, you need to make sure that the timeshare company is clear about its processes and what it will be doing for you. Any opacity on their part is a bad sign.
👉 Learn more: When we talk about scams, it would not hurt to learn more about personal loan scams—here’s a guide to spotting the signs.
Be Active and Vigilant
While looking for red flags is a must, there is plenty you can still do to protect yourself even further.
To begin with, if you’re the one approaching the timeshare exit company, then you should do your research first. This includes looking up the company on the Better Business Bureau website and assessing the company’s reputation for yourself. You might also want to double-check and make sure that the firm in question is both licensed and accredited. And be extra cautious with a company that just changed its name or address as there might be something unseemly there.
Another thing you can do to ensure that everything is on the level is to check with the company that originally sold you the timeshare. They will let you know whether the exit company is affiliated with them in any way. Better yet, some companies that sell timeshares also have exit programs, so it could definitely be worth your time to look into that before reaching out to a third party.
If you do end up dealing with a timeshare exit company, be sure to get everything in writing. This includes any promises or agreements the company makes to you. And this is not to mention how important it is to carefully read every single document you are asked to sign.
🚗 Learn more: Car loans can come with their pitfalls; being aware of the notorious auto loan scam is just good due diligence.
Putting It All Together…
Even though timeshares are notoriously hard to get rid of, it is not impossible. Ideally, before you even buy a timeshare, you should ask the company selling it to you about their exit options. The bigger names in the industry will usually give you the option of returning your timeshare, provided all your maintenance fees and dues are paid.
If you need to toss a timeshare monkey off of your back but don’t know how then you need to be vigilant with the exit companies you interact with. Many of them will prey on your fear and try to wrangle as much cash as they can out of you.
Understanding how timeshare contracts work and knowing the real and effective ways to get rid of a timeshare can protect you from timeshare exit scams and get that burden off your back at the same time.