What are Timeshare Scams?

Mary McMahon

Timeshare scams are scams which revolve around the concept of the timeshare, using the timeshare as a hook to entrap unwary consumers. While timeshares can sometimes be a cost effective form of property ownership, there are a number of things to consider before getting involved in a timeshare, even when it isn't a scam. Timeshare scams, like many other scams, involve pushy sales pitches which are designed to force people into rapid decisionmaking, without giving them an opportunity to evaluate the facts.

Several individuals share ownership of a timeshare property.
Several individuals share ownership of a timeshare property.

It's important to distinguish between a true scam and unsavory business practices. If someone is sold a timeshare which doesn't exist, this is a scam. If someone is misled about the costs of timeshare ownership by a slick salesperson, this isn't very nice, but it's not a scam. True scams can be prosecuted by the government, and may expose the perpetrators to heavy penalties.

The simplest timeshare scam is one in which people are sold timeshares which don't exist. These types of timeshare scams rely on sales presentations with glossy photographs and elegant brochures. People may even be taken to a site which is allegedly the site of the timeshare. After paying, people realize that they have bought shares in something which doesn't exist.

Other timeshare scams can involve pre-sales. In this case, the timeshare company openly admits that a timeshare doesn't exist, because it hasn't been built yet. People are encouraged to buy in on the ground level, and may be pushed into making a purchase by a salesperson who assures them that the prime locations won't last. Once the developer has collected the money, it abandons the project and pockets the proceeds. Legitimate pre-sales do exist: people should make sure that their money is held in escrow when they make such purchases so that if the development falls through, they will get their money back.

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Timeshare scams can also involve a bait and switch. In these scams, consumers think they have bought a share in a timeshare, and the company swaps the share out with a lesser timeshare. Or, the timeshare contract comes with expensive maintenance fees and other fees which drive up the cost of ownership. Failure to disclose fees or to include an exit clause if a timeshare suddenly becomes unavailable is illegal. Other scams include a pledge to sell an existing timeshare to allow someone to buy a new one, or scams in which people are assured that if they change their minds about their timeshares, it will be easy to sell or lease them.

People have also fallen victims to timeshare scams in which they are asked to attend a “brief” sales presentation which turns into an extended pitch and a nightmare. Travel expenses may be paid, making people feel like they are obliged to go to sales presentations, and the pushy salespeople may try to force people into buying timeshares or other things. These scams can also include manipulative sales language, like grossly exaggerated demonstrations of how much people spend on vacationing which are used to trick people into thinking that timeshare ownership will be cheaper.

People can avoid timeshare scams by dealing with reputable business people. People who sell timeshares need licenses in good standing, as they are real estate agents, and its easy to check on this with government agencies. Furthermore, groups like the Better Business Bureau maintain records on businesses and individuals which can be used as a research resource to find out whether or not a company is legitimate.

Discussion Comments


I have friends who have a timeshare at Mayan Palace and seem to enjoy it. They know their best bet is to go back to their properties and avoid their sales presentations. I asked them recently if they believe it was a good investment for them and reply to me: "It's paid for, gotta use it. Right?"


Sometimes timeshares turn out to be scams, so for that reason it is important to know how they really work.

Maybe for families who are used to traveling a lot, they are good, but for families who only travel occasionally, they are are not good.

If you want to buy a timeshare, it is important to inquire about them, because they aren't always what they appear.


Another scam is calling people claiming they can transfer, donate or cancel the timeshare for an upfront fee. Never pay upfront in the timeshare industry for a service. If you do, you are spending more money and getting nothing in return. There is a company called Mexican Timeshare Solutions that works under a contingency basis and only collect their fee if the contract is canceled. Otherwise, no fee is charged.

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