Hey, buddy. Wanna sell your time share?
That pitch is increasingly hitting thousands of time-share 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 time-share sales that never happen.
Doug and Armelita Stoddard are among them. The Yuba City, Calif., couple spent about $15,000 for a one-bedroom, one-week time share in Napa Valley in California years ago. They’ve rarely used it.
Last summer, when Doug Stoddard was laid off from his home health nursing job, he started looking online for a place to sell his Napa time share. He 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.-based 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.
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“Absolutely, we’ve been scammed,” said Armelita Stoddard, 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 time-share fees.
The company has an “F” rating from the BBB. Efforts to reach AAA Timeshare Inc. by phone were unsuccessful.
Time-share scams aren’t new, but they flare up during economic downturns, said Tom Pool, spokesman for the California Department of Real Estate.
“Just like with loan modification scams, there’s a targeted market of potential victims,” Pool said.
When times are tough, many time-share 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 time-share 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 time shares 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 time-share 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.
Consumer tips
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 time share, not sell it. To sell a time share, a broker must be licensed in the state where the time share 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.
Time shares, where you buy fractional rights to use a vacation or resort unit but don’t technically own the property itself, took off in the 1970s, particularly at resort destinations like Hawaii, Florida and the Caribbean. According to the American Resort Development Association, the peak year for time-share sales was 2007.
But when that idyllic destination is no longer appealing or affordable, getting rid of a time share isn’t so easy.
The safest route to a resale is to start with your resort or time-share company. Check if they have a resale or buyback program.
Also talk with other time-share 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.
ARDA has a list of approved time-share resellers on its website, arda.org.
Another option is using a “resale advertiser,” which takes a small fee to post your time-share ad on its website. Sites like 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 time-share resales, but “in this economy, you’re looking at getting cents on the dollar,” Pool said.
On the Web
Federal Trade Commission: Under the “Consumer Protection” tab, search for “Selling a Timeshare Through a Reseller: Contract Caveats.” ftc.gov
American Resort Development Association: Check under “Resale Guidelines.” arda.org
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Better Business Bureau: Find tips and reports on fraudulent time-share resellers. bbb.org