Beware the Timeshare Resale Presentation.
The timeshare resale (or timeshare transfer) promise is tempting to many timeshare owners. As owners begin looking around to sell, they usually find that the ownership interest is of little or no resale value, and that the timeshare resale is an uphill battle. Burdened with regret, sometimes outright desperation, they find themselves looking or hoping for some way to dump that timeshare obligation.
Soon after investing, timeshare owners often realize that their purchase was not the bargain they imagined it would be. The cost of maintenance fees may outweigh the minimal benefits of timeshare ownership. Owners may rarely use the timeshare and then decide the price they paid was excessive.
Financial desperation is fertile breeding ground for countless scams that qualify as consumer protection violations. This is often the case with the increasingly common timeshare resale or timeshare transfer scam. Like other grifters, timeshare resale scammers are inspired by and feed off of such desperation and exploit this emotion in timeshare owners by selling a story they want to hear: that it is possible to quickly and easily get rid of a timeshare obligation for a nominal price.
Are timeshare resale and related timeshare exit operations legal and above board?
There are a few attorneys out there who do do the honest, sometimes difficult work of helping people get rid of timeshare interests. But in our experience, most of the companies and individuals offering a timeshare exit, transfer or resale routinely violate various state and federal statutes. For example:
- Many states require that a timeshare or timeshare related salesperson be licensed by the State where the transaction occurs. In the State of Washington, timeshare regulations are codified at RCW 64.36. RCW 64.36.07 requires timeshare salespeople to be either licensed as real estate brokers or to be registered with the State. As described below, many of the timeshare transfer employees travel from state to state and it is unlikely any are registered in each state in which they sell.
- Often, states impose a duty of good faith on both parties involved in a timeshare transaction. In Washington, this duty is codified at RCW 64.36.120.
- In Washington, RCW 64.36.200 criminalizes acts committed in the offer, sale or lease of a timeshare that are fraudulent or deceptive or designed to deceive. Such acts, as well as untrue or misleading statements or omissions of material facts, may be class c felonies when made in connection with a timeshare related offer.
What are timeshare transfer or timeshare resale scams and how do they work?
This isn’t to say that all people offering to help unburden timeshare owners of their unwanted timeshare are con men. We have found Mike Finn of Finn Law Group to be a great resource for people wanting to get rid of a timeshare obligation. He’s also generously offered his insights to us on several occasions, and his law firm’s learning center is a source of great information. Based in Florida, he helps consumers with unwanted timeshare interests.
Timeshare resale companies may go by any number of names:
- Timeshare exit teams
- Timeshare transfer companies
- Timeshare resale companies
Not surprisingly, they all share one common goal: to take your money. Often these companies have names that include words like “global” “vacations” “retreats” and vacations.” Many secure the names and contact information of deeded timeshare owners illegally by purchasing lists from unscrupulous timeshare company employees.
Timeshare transfer companies then call the timeshare owners and invite them to some sort of presentation, promising a free lunch or something and a no obligation presentation. Once there, timeshare owners are persuaded to pay a fee that may range from a few hundred dollars to tens of thousands of dollars. They then wander off, believing that they have finally unburdened themselves of this worry.
What happens after a timeshare resale company takes your money?
A common version of the timeshare transfer fraud involves the transfer of your deeded timeshare into a limited liability company. Those companies then hold the title and do nothing. They fail to pay all maintenance fees and eventually let the companies fold. For this reason, these companies are euphemistically referred to as Viking ships, in reference to the Viking practice of sending the dead to sea in ships. Eventually, the timeshare companies foreclose, and you’re left with the consequences.
In another scenario, presenters come through town and simply take your money and vanish. The timeshare is never transferred or sold, and you’re still left with the timeshare you wanted to be rid of, and out of money. Recently, one of our investigators witnessed a presentation at a Quality Inn in Federal Way, Washington. At the end of the presentation, the timeshare con men convince an elderly man with obvious cognitive impairment to pay out $15,000.00. Further investigation revealed that the owners of this company were burdened by an IRS tax lien in excess of a million dollars. Sadly, this likely means that the elderly victim may never see that money again.
In another version of the timeshare scam, timeshare resale salespeople call owners with the same offer of a free lunch and the chance to unburden themselves of an unwanted timeshare interest. When the owners show up, they are then presented with what appear to be documents purporting to transfer the timeshare interest, often on the letterhead of a third-party company the salespeople have no connection to whatsoever. This document is in fact just part of a larger set of documents which the owner signs. They then discover that not only did the company fail to complete a timeshare transfer, they also conned the signer into unwittingly purchasing yet another timeshare interest. These could be RCI Points, a bonafide deeded timeshare, Disney Vacation Club Points – anything.
Everyone is embarrassed after being scammed. Nobody should be.
When clients come to us with stories about being taken advantage of by organizations like timeshare transfer companies they are embarrassed and apologetic as they explain what happened. They shouldn’t be. At some point most people – consumer protection attorneys like us included – fall victim to some sort of business practice that qualifies as a consumer protection violation. The loss may be so small we may not be aware of it or may not care much, but it is happening all around us.
The Seattle-based consumer protection attorneys at Peterson Baker assist victims of consumer protection violations throughout the State of Washington. In many cases, we may even be able to provide resources to victims in other parts of the country, and we will always find time to talk to you. Don’t wait. The statute of limitations on civil cases can vary based on your case and location. If you’ve been taken advantage of by a timeshare resale or transfer company, been fleeced of money, or perhaps saddled with a new deeded timeshare or unwanted RCI Points, take action and contact one of the Washington consumer protection attorneys at Peterson Baker.