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Timeshare scams multiply in poor economy

April 10, 2012|By Claudia Buck

SACRAMENTO — Hey, buddy. Wanna sell your timeshare?

That pitch is increasingly hitting thousands of timeshare owners trying to unload their unused or unwanted properties. Frequently, they're getting swindled, part of a recurring scam that takes $2,000 or more in upfront fees for timeshare sales that never happen, say local, state and federal officials.

Doug and Armelita Stoddard are among them. The Yuba City, Calif., couple spent about $15,000 for a one-bedroom, one-week timeshare in Napa Valley years ago. They've rarely used it.

So last summer, when Doug was laid off from his home health nursing job, he started looking online for a place to sell his Napa timeshare. Stoddard figured the $10,000 or so he'd likely get would help with the couple's bills and mortgage payments while he looked for a new job.

After searching online, he got a call from AAA Timeshare Inc., an Orlando, Fla., company. Within weeks, a company salesman announced he'd found a buyer but needed $3,000 — in two cashier's checks — to cover "paperwork and processing fees."

Stoddard sent the checks by overnight delivery. "They were so convincing," recalls the 58-year-old nurse.

"They had an answer for every skeptical question I had."

But as soon as the checks went out, the company essentially disappeared. The salesman stopped answering emails or calls. Repeated phone messages to the company went unreturned. The company's website was unresponsive.

"Absolutely, we've been scammed," said Armelita, who said they've been unable to contact anyone at AAA for months. On top of their losses, the couple still pay about $800 in annual timeshare fees.

(The company has an "F" rating from the Better Business Bureau. Efforts to reach AAA Timeshare Inc. by phone were unsuccessful.)

Timeshare scams aren't new, but they flare up during economic downturns, said Tom Pool, spokesman for the California Department of Real Estate, who remembers similar scams in the 1980s. "Just like with loan modification scams, there's a targeted market of potential victims," Pool said.

When times are tough, many timeshare owners are stuck with vacation properties they can't afford to use and annual fees they can't afford to pay. Eager to sell, they can easily fall victim to scam artists posing as timeshare resellers who take upfront fees — as much as $5,000 in some cases — but fail to provide anything in return.

"The minute [con artists] figured out timeshares were worthless, up sprang these companies offering to 'Find You a Buyer,'" said Gary Almond, president of the Northeast California Better Business Bureau.

Many claim they have immediate, interested buyers. Or that your timeshare location is a "hot" market. Or that the potential buyer is a corporation or foreign investor.

If you get such promises — by mail, email or phone — act carefully.

"The biggest red flag is the minute they want you to send money before the transaction," said Pool.

To avoid being scammed, be clear about what's being offered.

If a company is not a licensed real estate broker, it can only help advertise your timeshare, not sell it. To sell a timeshare, a broker must be licensed in the state where the timeshare is located.

Get all promises in writing. Never pay fees upfront. Don't be pressured into sending money or giving financial account numbers over the phone.

The safest route to a resale is to start with your resort or timeshare company. Check if they have a resale or buyback program.

Also talk with other timeshare owners. If the owners association or management group has a newsletter, email list or even a bulletin board, you can try posting a "For Sale" notice.

The American Resort Development Assn. has a list of approved timeshare resellers on its website, http://www.arda.org.

Another option is using a "resale advertiser," which takes a small fee to post your timeshare ad on its website. Sites such as RedWeek.com, which calls itself a "do-it-yourself" reseller, charge a $15 annual membership and a $60-a-year posting fee for each ad.

Some individuals post classified ads or try selling their unwanted units on EBay or Craigslist.

There are legitimate companies that do timeshare resales, but "in this economy, you're looking at getting cents on the dollar," Pool said.

Buck writes for the Sacramento Bee/McClatchy.

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