“We understand that you have a timeshare. Do you want to rent it or sell it? – we are the experts” says the smoothie on the phone. You like what you hear so the conversation moves forward “But we will need your card number/pin number/account number/mothers maiden name etc. to be able to pay you when the deal is done”. You, being a sucker, fall for this and are surprised to get a call from your card company/bank a few weeks later saying that an attempt to remove a large amount from your account is being held pending your confirmation.
A friendly voice on the ‘phone offers to help you get back the money promised by a cash back scheme. The friendly voice says that their “legal expert” will ensure that you get back all the money – but to meet him you must go to Tenerife. But they will happily arrange for you to be put up for a weeks holiday at their expense. On Tenerife you find that the “legal expert” is a salesman who wants you to buy a timeshare – with the promise of all the cash back money back in a few years, which is no better than when you srtated, and you’re a few thousand down for a timeshare you don’t want.
The charming person on the telephone tells you that you can have a 7 day stay in a luxury apartment in a hotel or resort in Spain/Canaries/UK/Bali etc. etc. All you have to pay is a very modest sum. You pay. You pay for the flights. You pay for the taxi to the resort and present yourself at reception. “We do have a record of your booking and we are full. Sorry, you must go elsewhere”.
How do you get a fine for a motoring offence when you were not where the offence is alleged to have been committed and you don’t drive? By being on a list – stolen of course – of timeshare owners. Numerous owners have received demands for €129 as a fine for an offence said to have been committed when they were on holiday in the Canaries or mainland Spain. Pay it and that’s another €129 you are down to the fraudsters.
Stealing ownership of a good, resaleable, week is one of the latest scams. You don’t receive a management fee invoice one year , think nothing of it, then a few weeks later get a letter saying “you haven’t paid, we are repossessing”. Or, if the week isn’t that good, the letter says “pay us lots of £££ and we will re-instate your membership”.
“We are processing your paperwork” is the latest scam to avoid the law – a new variation on “The Thumb” (see below). When you sign to buy a timeshare you are “distracted” from the written statement on the agreement that you have a 14 day cooling off period. When you arrive home you find that your copy of the agreement is missing. You ask the seller for a copy and get the response “Certainly, we’ll get it to you shortly as we are processing it”. It arrives on day 15 – too late to cancel!
Suddenly there are half a dozen web sites offering low cost holidays in the US – or they phone with very tempting offers. All the offers come from the US – usually Florida – at prices which are very tempting. Butnobody gets their holiday and the fraudsters take approx. £500 a time. Check the company on www.bbb.org to see what their local authorities think of them! You do have the right to cancel within 30 days if the company is based in Florida – if they will not return you money ask the Florida State Department to help, and tell your card company that you have been defrauded.
With sales getting more difficult some operators are trying to “lock in” their owners to keep income from management fees flowing. How? By making it almost impossible to sell by imposing a massive “transfer fee” if the owner does attempt to sell – a fee often greater than the value of the week being sold.
An offer that you can’t refuse – but should. A holiday in the US, or New Zealand, or some other far distant shore, including flights and two or three weeks accommodation. All for around £500. You send the £500, they send you …… nothing.
Yet another resale fraud – this time in the UK. Crooked resale brokers are pretending to sell a really good week to a buyer for a very modest price – the problem being that the buyer pays the money and gets nothing in return except, perhaps, a photocopy of an ownership certificate in the name of someone else. Some of these certificates are forgeries.
You buy a timeshare for £10,000 with the promise that, if you don’t want to use it, the operator will rent it out on your behalf and you will receive over £1,000. A quick calculation says that you will get all your money back in under 10 years and thereafter will have a steady income of £1,000 for life. Too good to be true? Yes, this is one of the newer scams whereby the operator changes name or simply disappears after a couple of years.
The fraudsters are getting cheekier. When a victim questions the reason for sending money to the fraudsters, they fabricate some very convincing documents to give the impression that the payment is approved or required by a responsible authority. So any letters headed “Abogado” (lawyer); “Auytamiento” (Town Hall);”Mercantil” (Companies House) etc. should be treated with the contempt they deserve.
A number of traders carry the logo of a trade body in order to give themselves credibility. The trade body concerned only exists as a few words on a piece of paper and no reliance should be given to such traders.
When RCI is not RCI. “RCI” cold call offering bonus weeks at tempting prices. And exactly the week you want! You give the caller your credit card number and …………. nothing. The real RCI say that they are investigating what appears to be a fraud using their name.
The “Rescue” Scam. Yet another cold call – this time the promise is “we will get back all the money that you were cheated out of by those crooks in Spain”. Just send us £160/£185. You might even recognise the voice of the character who originally cheated you!
Now its the timeshare owner in the firing line: One UK resort developer projects a 30% loss of owners in year 2000 as a result of increased management fees – which will put the fees up again causing yet a further loss of owners, which will put ……. Another UK developer gave owners 37 days in which to pay an unlawful management fee – or they would be repossessed. Yet another UK developer invited owners to hand back their ownership certificates if they disputed a massive levy – many did.
Credit Card money going the wrong way. The charming character on the ‘phone says “Let me have your credit card number so that we can send you the proceeds from the sale of your week that we have just made”. And you give it. And your next statement shows 100,000Ptas deducted FROM your account! Moral: Never give your card number to ANYONE unless you really intend to make a payment.
If the promise is not in writing – then it won’t happen!
Have you ever wondered where the accommodation for a Holicon comes from? If, as an owner, you have agreed to forego use of your week for one year at the request of the resort because of “major refurbishment” or “ use as a show apartment” or some similar excuse – check whether it is not actually being used by someone else, perhaps from a holiday club? A highly profitable switch for the operator.
“Phantom accommodation”. For £3,000 you purchase the password to access an Internet site which lists thousands of weeks of timeshare available for rent. But what the operators conveniently omit to say is that few, if any, of these thousands of weeks of timeshare actually exist. Sounds just like a Holiday Club, on the Internet.
“Fly-buy”. One well established marketing technique is to persuade punters to visit a resort – perhaps on the promise of a low cost holiday – in order to sell them a timeshare. But a new variant of this “Fly-Buy” scheme has surfaced. The telephoner says that they have a buyer for your timeshare at a price you never dreamt was possible – “just come over to Tenerife/Costa del Sol at our expense to complete the deal.”. You arrive to find that there has been a slight hiccup in the deal -“but while you are here, why not buy one of our lovely ….” . If you fall for it you become the owner of two timeshares.
Points Clubs. With a plethora of Points Clubs, and more appearing out of the woodwork every month, it is timely to issue a warning. Points Clubs fall into three categories.
- Outright scams, where consumers pay more money for less benefits. The only winner is the operator.
- 2. Clubs designed to rescue a failing timeshare operator from his own incompetence. Both operator and consumer will eventually be the losers.
- Clubs run by larger, professional, organisations. The only safe ones to consider. Choose with care, or you could be badly hurt.
The “Show Apartment” scam (common in Portugal).”Sorry” says the tout “but the apartment I’m trying to sell you is occupied. But take a look at this apartment, it’s just the same”. It’s exactly the luxury and space you wanted. You sign up, pay, and go home. Until you come to bank you newly acquired treasure with an exchange company – “Sorry (a word you’ve heard before!) but you only own a pig-sty which limits your exchanges into other pig-stys.”
Stolen Ownership Certificate. You get the usual telephone call: “We’ve sold your timeshare week for £££££££”. A lot more than your expected – in fact, four times more than you expected. “Just send us your Ownership Certificate and the ££££££££ will be sent to you in 14 days”. You wait …. and wait ……….. and wait ………….. until eventually you call them – a dead telephone !
If it sounds too good to be true, then it’s probably a Euro Certificate from Reclaim Ltd ! The tout offering this cash-back scheme may have said “You are guaranteed a payment of £15,000 in 51 months time”. But the Reclaim small print actually says ” Reclaim Limited makes no promise nor gives any undertaking to redeem the maximum amount …… or indeed any amount” . Some guarantee? And Reclaim promotional literature gets ten out of ten for presentation – but nil out of ten for honesty. Investigations in Gibraltar have established that some statements made in the Reclaim literature are not true, which must raise serious questions about the “cash-back” payment prospects for holders of Euro Certificates. It has also proved impossible to obtain confirmation that their claims in their latest promotional literature are true. And the fact that their “Chairman” will not confirm his position further contributes to a feeling of doubt. Our advice. Stick to the National Lottery…
So you don’t believe the tout when he says “You could have won £1,000”? Easy; the tout shows you a photograph of the last winner of the £1,000 and you’re convinced. Or are you ? Keep your eyes open when you are doing the “timeshare tour” – you might just recognise the happy couple in the photograph as the Sales Manager and his girlfriend!
Fancy a flutter on the timeshare market? Invest between £15,000 and £40,000 in a number of timeshare weeks – anything from 6 to 20 weeks in all – on the promise that the salesman will sell these weeks, on your behalf over the next 12 months at an ” enormous ” profit. All you have to pay are a modest registration fee and the regular management fees. A year later you contact the resort to collect your profits and – whoops – only one week has been sold. But, of course, you can continue for another year. All you have to pay is a further registration fee and the management fees. Again ! What can you do ? The resort is holding on to your “Ownership Certificates” – ‘in case we make a quick sale’ – ; the management fees are rapidly eroding the profit and you are still the proud (embarrassed!) owner of more timeshare weeks than you need. And there is a nasty suspicion that some of these “investment” weeks have been sold to more than one investor !
Double whammy. A year ago you paid £295 to reseller “A” who had promised to sell your week “within 6 to 8 weeks”. Now reseller “B” comes on the ‘phone offering to sell your week “at a special promotion in America/Russia/Israel in only a couple of weeks time”. This time the fee is £330. You mention that you are already registered with reseller “A” – “no problem, we’ll get that £295 back for you” .promises reseller “B”. But a quick check on telephone numbers confirms that reseller “B” is really just reseller “A” having another bit at the cherry. Now you are £625 down and still own your timeshare week.
Bureau de Change or “How to lose the benefit of the Credit Card Company refund scheme”. Credit Card companies operate a voluntary scheme to refund payments made in Europe for timeshare if the card holder cancels (in writing) within ten days. This refund eventually comes out of the pocket of the timeshare company making the sale. To get around this enforced refund, timeshare companies in Spain are “persuading” punters to use their credit card to withdraw cash, at a Bureau de Change, and pay a deposit in cash. Now the poor credit card holder cannot get a refund from his bank if he cancels – and the timeshare company get to keep all the money. When a Free Holiday is neither Free nor a Holiday. You’ve won a “Free Holiday” – all you have to do is attend a presentation. Suspicious, you ask “is it timeshare?” “No, certainly not”, so you attend. And yes, its a 2 hour timeshare presentation. Whether or not you decide to buy a timeshare, you ask for your “Free Holiday”, only to find that:-
You will have to pay a fee ranging from £30 to over £150 – so its hardly free
The conditions for booking the holiday are so restrictive that it is very easy to miss the booking period – losing everything.
When you take the holiday, it will be at a timeshare resort. Where, if you didn’t buy at the first presentation, you get a further 4, 5 or even 6 hour high pressure selling – hardly a holiday. And if you actually get your holiday you’re one of the luck ones – lots of people promised “Free Holidays” simply didn’t get anything for their time, trouble and money – four companies have been closed down for not providing the promised holidays and others are being targeted. Black Hole? Additional charges on owners – “levies” – have become increasingly prevalent over the last couple of years. These levies have generally been justified on the grounds that they are necessary for “refurbishment” and “renewals” of the owners accommodation. But one group of owners, when they next stayed in their accommodation, were unable to identify where all their levy money had been spent, despite assurances that it had all been used to improve the owners accommodation. They suspect that some of the levy money had been diverted into other projects; projects of no interest or concern of the owners.
A veritable “Black Hole”. Can’t sell your timeshare? – how about converting it into a money-back guaranteed bond? Out of the blue someone calls to say that they can help you get your money back from your timeshare (how did they know you are an owner ?). Their offer is simple – give us your timeshare and £2,000 and, as if by magic, we will give you back the original price that you paid for your timeshare (perhaps £6,000) in xx months time. You hand over your Ownership Certificate and the money and you get an important looking bond. “Guaranteed repayment to Mr & Mrs Smith on 1st January 2003”. And what happens on 1st January 2003 ? – absolutely nothing. The crooks have long since gone with your money and your timeshare.
“The thumb”. Buyers are told that they have a cooling-off period – but are not told how many days this is. Almost in the same breath they are also told that they have “a full month to pay the outstanding amount”. When it comes to signing the Purchase Agreement, the tout points out that the date for payment as one month in the future, but he has his thumb firmly over the clause stating the cooling-off period is only 10 days. Mr & Mrs Punter happily cancel after 28 days – only to find that its too late. “The thumb” has struck again !
The advance payment scam. A timeshare reseller calls you or writes ( how did he know you owned ?) saying that he can sell your week (sometimes he says that he has already sold your week) for a figure three or four times more you know its worth. How marvelous – and all he wants is a small administration/registration fee – usually between £100 and £300. You send the fee and – a deafening silence. Weeks later you call the reseller, can’t get to talk to the person who originally called you, but the other salesman is quite blunt. “Could never sell it for that price, it isn’t worth a quarter of that – sorry mate, bye”. Variations: 1. “We are calling you from Spain [Bulgaria, Mongolia] and have a buyer waiting with his money to pay you the original purchase price. Just pop down to you bank and mail us 80,000 ptas [500 dollars], send us your Certificate, and we’ll have the money with you in a couple of weeks.”. Do as they ask and you could be 500 dollars poorer and lose your timeshare.
2. “We don’t want any advance payment – but just tell me your Credit Card number so that we can deduct our commission when we make the sale”. And guess what appears on your next Credit Card statement a few weeks later?? No sale having materialised.
3. “We have rented out your week for £600 – just send us £200 administration fee and we’ll send you the £600 two weeks before the week”.
A timeshare in all but name!
The ‘no-deposit’ rule has hit the touts badly – so they have dreamed up a new wheeze to lock a purchaser into the contract. They offer them a 35 month period of use of a timeshare – sorry, ‘holiday apartment’ (which falls outside the timeshare legislation) which converts on payment of a nominal sum into a full blown timeshare in month 36. For which you pay an amount roughly equal to the deposit the tout wanted in the first place.
Neat!. Doesn’t actually break the law, but forces the buyer to think very hard about canceling because he will not get the deposit – sorry, “holiday apartment use” money – back.
This scam operates under various guises – “Holiday Bond”, “Special Holiday Program” and other similar names. How to become the unwitting owner of two timeshares. On holiday enjoying your timeshare when a tout approaches you. At the presentation you tell him that you already own a timeshare – “no problem, we’ll sell your existing one provided you buy a nice new one from us”. Sounds great, and you hand over the money for the new one and go home to wait for the cheque for the sale of your ‘old’ one. Guess what never arrives? Now you own two – with two sets of Management fees and two sets of finance repayments – thanks to the Buy/Sell Scam.
Variation 1: You have contracted to buy a timeshare when another tout persuades you that you are making a big mistake – just buy into HIS resort and he will extract you from the legal obligations of the first contract. Except that he doesn’t! This one is known as the “Rescue scam” in the trade.
How to pay more for your mortgage. You are being put under pressure to buy a timeshare at a presentation – but can’t afford it (or trying to use “We can’t afford it” as your excuse to get away from the tout). No problem – he can arrange a replacement mortgage, with lower repayment terms than your existing mortgage, which includes the timeshare. The repayment figures given by the tout are tempting. You sign up for the timeshare and arrange to talk to the mortgage broker when you return to the UK. Great, you’ve got a reduced mortgage AND a holiday for life! But (how often that little word turns up) the mortgage provider says he knows nothing about the lower figures and the cost of the family home plus the timeshare turns out to be higher than your existing mortgage. Of course, you don’t have to take up the new mortgage – but you do have to pay for the timeshare, now well past the cancellation date.
When Blue equals Red or “Of course you can upgrade”. Timeshare weeks are divided into three colour bands throughout the year – Red for the most popular, with White and Blue for out-of-season weeks. A buyer who cannot afford a Red week is verbally promised that there will be “no difficulty” in having use of a Red week even though he is only buying a lower grade week. It is not until the new owner attempts to use a Red week that the resort denies any knowledge of the promise and the scam is exposed. And the resort denies everything the tout has promised – well, they would, wouldn’t they!
Question: What looks like timeshare, sounds like timeshare – but is just a rental scheme? With a really big up-front payment! Answer: A “Holidays for Life” club (and various other similar names). For £8,000 down and £250 a year you can have a holiday from a choice of resorts. You own nothing; you have no guarantee that the company providing the holidays will exist in 2 years time, let alone 20 years. And for that money you could get yourself a first class timeshare and a second car. But buyers are signing up for exactly this, often with the tempter of a “Money Back Bond” after only 5 years – and we all know how reliable those “bonds” are! Variation: Instead of paying to join the “Holiday for Life” club you are offered shares in a Company. But the incentives, benefits and risks are exactly the same.