Timeshare presentations promise dream vacations at bargain prices. But many attendees leave with buyer's remorse and decades of financial obligations. Learning about timeshare presentation warning signs before you attend any sales pitch is extremely important. High-pressure tactics, misleading investment claims, and hidden maintenance fees are just a few red flags that signal potential timeshare scams.
This article discusses five warning signs to watch for during timeshare presentations, helping you recognize deceptive sales tactics and protect yourself from costly contracts. Whether you're tempted by free vacation incentives or curious about timeshare ownership, knowing these red flags can save you thousands of dollars and years of regret.
So, if you’re thinking about buying a timeshare, joining a vacation club, or planning on attending a presentation to get a free hotel stay or another gift, go into the presentation with your eyes open. Be prepared to face some pressure. Do your homework, prepare for the sales talk, and watch for hard-sell tactics and misrepresentations in the presentation itself.
Get Ready for the Hard Sell
When you think about timeshares, it might conjure up the image of a pushy salesperson who pressures you endlessly to make a purchase. But maybe you're willing to put up with the presentation to get a free night at a hotel or another prize.
On the other hand, perhaps you visualize having a yearly vacation at an upscale resort in a tropical location or a ski town, and you don't mind having a salesperson tell you all about it.
Many people who attend timeshare sales presentations end up as timeshare owners whether they intended to buy one or not. To avoid this situation, you should go into the presentation fully prepared so that you can make a rational decision about whether buying a timeshare is right for you.
Before You Attend the Presentation, Do Some Research
Before entering the presentation, you should evaluate the resort developer or vacation club. Even if you think you won’t be tempted to sign up at the presentation, it's a good idea to investigate the developer or program ahead of time. You never know, the salesperson might be able to sway you. You should be prepared to bring up and discuss any issues you've discovered.
Look Online
Check the Better Business Bureau website and run a Google search to find out if other people have made complaints against the resort or vacation club. Timeshare owners who have difficulty dealing with the company after buying a timeshare often post their experiences and warnings online.
Check Out the Resort
If you're interested in a specific resort, take some time to look around the grounds and visit the facilities, like the pool, tennis courts, clubhouse, and gym. Speak with current timeshare owners about their experiences. Ask current owners about how easy or difficult it is to book vacation stays and about their experiences dealing with the timeshare company.
Five Claims to Watch Out for at the Timeshare Presentation
Timeshare salespeople sometimes use hard-sell tactics and misrepresentations to get you to make a snap decision about buying a timeshare. Here are five claims a salesperson might make that you should be on the lookout for:
1. “The sales presentation is only about 60 to 90 minutes.”
The presentation will probably be at least two hours, more if you ask questions, which you should do if you’re interested in the deal. By the end of the presentation, most people feel pressured and worn down by the sales pitch. As a result, you might be tempted to sign a purchase contract even though you had no intention of buying a timeshare when you first walked into the meeting.
2. “Purchasing a timeshare is a great investment. You can always resell it later (at a profit!) if you decide you don’t want it anymore.”
In reality, timeshares have little to no resale value. You’ll probably lose money on the deal even if you find a buyer. And, if you can’t find a buyer, not only are you stuck with a timeshare you don’t want, but you might be on the hook for mortgage payments (if you took out a loan to purchase the timeshare) and yearly maintenance fees, even if you don’t use the timeshare. If you have a deeded timeshare, you could potentially face a foreclosure if you default on the mortgage payments or yearly fees.
Additionally, if you eventually decide that you do want to resell your timeshare, you’ll need to watch out for scammers who will try to take advantage of your situation.
3. “Paying for a hotel costs more than having a timeshare.”
When comparing hotel costs to purchasing a timeshare, getting a hotel room might initially appear more expensive. But most of the time, when salespeople make this comparison, they don’t include yearly maintenance or other costs in the comparison.
When you evaluate the total expense of owning a timeshare, your analysis should consider any loan payments, purchase costs, annual maintenance fees, dues, and taxes. These costs can add up quickly and can easily exceed the expense of staying in a hotel with similar amenities in the same location at the same time of year.
4. “You can rent out the timeshare if you don’t use it.”
Renting out a timeshare or giving away vacation club points might be difficult. Often, there’s an abundant supply of timeshares for rent, and few people are interested in renting one. Or the terms of your deal might not allow you to rent out the property. To transfer vacation club points, the recipient might have to be a member of your vacation club or an affiliated club. Be sure to read the rules carefully.
5. “This special price is only good today. If you come back tomorrow, you’ll have to pay more for the same deal.”
This type of statement is designed to scare you into making a quick decision. In most cases, if you come back the next day or the next week, the price will be the same.
Special Considerations When Buying a Timeshare in a Foreign Country
If you’re considering buying a timeshare outside of the United States, you should definitely educate yourself beforehand. For starters, you should know that while many U.S. states have laws that strictly regulate timeshares, those laws don't apply to you if you purchase a timeshare in a foreign country. Instead, you'll be subject to the laws of the country where the timeshare is located.
Some Countries Restrict Ownership
Many foreign countries don’t allow, or if they do allow it, they restrict ownership of property within the country by non-residents. When this is the case, foreign purchasers can generally acquire a right-to-use (RTU) timeshare rather than a deeded timeshare.
As the name indicates, when you buy an RTU timeshare, you get the right to use the property at certain times, usually for a number of years, like 25 or 30 years.
So, which is better: a deeded or RTU timeshare? There are pros and cons (mostly cons) to each type of ownership for consumers. Ultimately, the real winner is the resort, which will make money regardless of whether the timeshare is deeded or RTU.
Will You Get a Right to Cancel?
If you enter into a timeshare contract and then have buyer’s remorse, depending on the local laws and the contract terms, you might get a short amount of time during which you may unilaterally cancel the contract and get your money back. Your purchase documents should indicate the length of the rescission period, if you get one, and describe the procedures you must follow to rescind the sale.
Usually, you’ll only have a few days to back out of the deal, so be sure you read your contract carefully. You might also want to speak to a local attorney who can advise you about the rescission period in that particular country.
Other Issues to Consider When Buying a Timeshare Abroad
If you’re thinking of buying a timeshare in a foreign country, you should also consider the following legal issues and find out the answers to the following questions:
- Regulations involved. Does the government regulate the timeshare industry? For example, do timeshare projects need to be registered? If so, is the timeshare you're considering purchasing part of a registered resort?
- Consumer protection laws and agencies. Does the country where you’re considering buying a timeshare have any laws or agencies protecting consumers? U.S. law won't protect you if you get scammed while purchasing a timeshare outside of the United States. Instead, you'll be subject to the laws of the country where the timeshare is found. If consumer protection laws exist, what are your rights as a timeshare buyer under those laws? Are there any protections if you get scammed in a timeshare deal? Is there a governmental agency that can help you? In Mexico, for example, the Procuraduría Federal del Consumidor (Office of the Federal Prosecutor for the Consumer), known as PROFECO, is a consumer protection agency designed to protect consumers against abuses or fraud by companies that operate in Mexico.
- Language. Are the purchase contract, declaration, and other vital disclosures written in your first language, or will they be written in a language you don’t understand? You might need to hire a local attorney to assist you in interpreting and understanding the legal documents.
- Payment options. Does the timeshare resort accept payments in U.S. currency? If you have to pay in a foreign currency, you’ll most likely incur currency-exchange fees, as well as fluctuations in exchange rates, which can increase your costs significantly.
- Taxes. What taxes will you have to pay on the timeshare? Are foreigners taxed differently than citizens of the country where the timeshare is located?
Talk to a Lawyer
If you’re thinking about buying a timeshare or joining a vacation club and need clarification about any of the terms or conditions of the deal, consider contacting a timeshare attorney or consumer law attorney.
If you've already signed a contract and want to learn about your cancellation rights, you should act quickly. If you get that right, the amount of time you get to cancel is probably quite short, usually three to fifteen days, depending on state law. So, it's best to get information about your specific rights as soon as possible.