What is Timeshare Fraud?

High Pressure SalesVacation timeshare sales are a booming business. More than 3 million Americans own a piece of a time share vacation resort, and many of them were lied to during the sales process. The chances that you were a victim of timeshare fraud are great.

The timeshare industry is permeated with unethical salespeople — known as “heat merchants” — that vacationers need to be wary.

These hard-selling salespeople used high-pressure tactics to sell overpriced time shares — aided by misrepresentations and even outright lies.

How do vacationers end up in these salespitches? Typically they’ve responded to a mailing promising them a cheap travel package — usually including hotel stay and a short cruise. Or in many vacation areas, so-called tourist information storefronts bring in travelers, and then convince them to visit a nearby resort for a sales presentation in exchange for a freebie of some kind — tickets to a local attraction, for instance, or dinner at a nearby restaurant.

When you buy a time share you’re getting a week of time at a vacation resort, which you have the right to use year after year. You can return that same week each year, or you may be able to exchange it and stay at a different resort at another destination.

Heres some of the lies you may have been part of:

It won’t take long:

Claim: “The sales presentation will only last about 90 minutes.” Reality: Possibly true, as long as you sit like a deaf mute and don’t say a word. Plan on being there for at least two hours, three if you make the mistake of asking many questions. They know that the longer the pitch lasts, the more likely you are to break down and open up your checkbook.

Time shares are a good investment:

Claim: “I know this stuff has doubled in the last five years — oceanfront — cause there’s none left … You know a time share is not sold as an investment opportunity … but think about it … we’ve gone up $2,100 in seven months, where do you think we’re gonna be in 10 years?” Reality: As a financial investment, many time shares are just about as bad as it gets. In fact it’s like buying a new car — the moment you drive it off the lot, it’s worth much less. Industry sources say that the majority of time shares immediately drop in value by at least 20 percent to 30 percent One big reason for that is that the marketing costs to sell the unit to you run as high as 50 percent of the sales price.

Timeshares are EASY to sell:

Claim: “Why don’t you try it at least one time? If it doesn’t work, sell the darn thing. What do you have to lose?” Reality: You could have a lot to lose if you don’t like it. Time shares are notoriously difficult to resell. If you slash your price to far less than what you paid, you might eventually find a buyer, but chances are you’ll lose money. And in the meantime, you still have to pay off your loan plus the annual maintenance fees (which run into the hundreds of dollars) no matter what.

It’s easy to rent out:

Claim: “If you can’t use it one year, you could rent it out.” Reality: Renting is also notoriously tough to pull off. Many who try end up losing even more money, since they pay advance fees to rental agencies who often don’t find any interested parties.

Time shares are a tremendous value:

Claim: “Paying for hotels while on vacation is a waste. Over the next 10 years of weekly vacations, you’ll spend thousands more than if you bought a time share here.” Reality: A big expense is sometimes left out of this equation. When doing this time share vs. hotel price comparison, they may point out, for example, that 10 years of hotel rooms will cost you about $18,000 after inflation. Meanwhile the time share costs a few thousand less over that same period of time. But make sure interest on the time share loan — and hundreds of dollars in annual maintenance fees — are included when they do the math. Suddenly a much different picture may emerge.

Use your time share to travel anywhere:

Claim: “You can exchange your time share week here for one at any resort you want … and visit Hawaii in the winter, Paris in the spring, anywhere, anytime.” Reality: Exchanging your time share week for one at another resort, anywhere in the world, is one of the biggest attractions of time sharing — and potentially the source of its biggest disappointments. That’s because many people find that the “anywhere, anytime” claim is an exaggeration. Top vacation spots such as Hawaii can be very hard to exchange into, especially if the week you own is not during high season and in a top property. But if you’re willing to be flexible about dates and locations, you could do very well for yourself.

We have a special price for you:

Claim: “The value of a one-bedroom-for-one-week time share is $28,250. We’ll give you a $4,000 discount.” Reality: Typically you’ll first be quoted a false high price, which is then dropped automatically. That way buyers are led to believe they are getting a bargain, when the truth is the salesperson doesn’t really expect anyone to pay that inflated first price. If you keep bargaining though, you can usually get them down much further.

It’s now or never:

Claim: “If you don’t buy today, you’ll have to pay full price.” Reality: Insiders say that if you come back the next day, chances are you can still get the same deal. Still, this is one of the most common misrepresentations. In fact, some South Carolina resorts go so far as to have you sign a piece of paper warning that, according to state law, the offer is only good that day. But this is just another bogus pressure ploy — the state Real Estate Commission says no such law exists.


These are just a few of the hundreds of different lies that most people hear while at a timeshare sales seminar. We can help you break your timeshare mortgage if you were a victim of fraud and the inducement.