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Everything You Should Know About Timeshares and Vacation Clubs

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If you’re someone that loves to vacation and travel you may be considering purchasing a timeshare or joining a vacation club. But what exactly should you know before making that purchase? Check out this blog that covers the presentation, agreements, and the associated scams so you are armed with knowledge and able to make an informed decision. This information is for anyone that is looking to buy a timeshare, join a vacation club membership, or that is trying to sell their timeshare.

The Pitch

Promotors use various tactics to get consumers to attend their sales presentations. You may receive free vacation offers by mail, text message, or email inviting you to attend a free presentation to learn about timeshares or vacation clubs. They also offer prizes and packages to get you in the door. They show beautiful photos of the vacation spots and accommodations to entice you to sign up and purchase.

Many promotors use high-pressure sales tactics such as long presentations designed to wear you down and sign up, or they may claim the “great” deal they are offering today won’t be available tomorrow.

Here’s some tips to help you through the presentations:

Before you agree to attend the presentation, do your own research. Look up the company to check their reputation and look for complaints or reviews about the business. Look up both the resort developer and the management company putting on the presentation.

Don’t give in to high-pressure sales tactics. If you feel like you’re being rushed to make a commitment, or you are uncomfortable with the sales presentation, walk away. If they tell you the offer is only available that day, ask them why since they are the ones that set the rates. They should be able to make the offer later. This is mainly a tactic to get you to commit to a long-term agreement before you get the clear details behind the offer.

Discuss cancellation terms and get them in writing. Ask about the “cool-off period” or time you can cancel the deal after you sign a contract. Make sure to send any cancellation letters by certified mail with a return receipt request.

Review all paperwork. Each verbal offer should be in writing. If it is not, don’t sign. If you are buying a timeshare in an undeveloped property, you have the right to get a public offering statement. Keep a record of all paperwork.

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The Rundown on Timeshares and Vacation Clubs

With timeshare agreements, you are purchasing the right to use vacation properties. Some timeshares allow you to book a stay at the property for a specific length of time/frequency or they may be point-based where you use your accumulated points at different properties throughout the year. You can expect to pay an initial agreement fee and regular maintenance or other recurring fees. There are usually blackout dates where you can’t book a stay during the blackout period.

Deeded timeshares (timeshares that let you buy a specific unit for a specific week each year) are legally considered real property that your heirs may inherit. For points-based timeshares, your points may expire each year. Also, the number of points needed to book a stay vary by property, location, length of stay, and the time of year.

Each state has specific laws governing timeshare purchases. Check the state to know your rights. Know that timeshares often come with costly ongoing and recurring fees.

Similar to timeshares, vacation clubs allow you to pay to stay at select resorts. The main difference with vacation club memberships is they allow you to pay more or less for how often you want to visit, while timeshares are usually for a set amount of time. Vacation clubs offer access to a variety of destinations and may offer discounts on travel, excursions, entertainment, and other amenities during your stay. Vacation clubs usually have annual dues or maintenance fees and some memberships have blackout dates.

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What to Consider Before You Pay

Both timeshare ownership and vacation club memberships are a long-term investment that often come with a hefty price. There are serious things to consider before making a commitment, such as the following:

  • How much will it truly cost? Take into consideration all the costs, including the initial payment, fees, taxes, travel costs, annual charges, and the money you will spend while at the destination for food, entertainment, etc. Is this amount something you are comfortable spending each year?
  • Is there an exchange program? The timeshare or vacation club may claim you can exchange your points or weeks to vacations at different properties. Ask if there are any fees for doing so and consider whether this is truly a deal.
  • How does the point system work? For point-based systems, typically the number of points needed for a stay depend on the length of your stay, type of lodging you’re booking, the location of the resort, and when you want to visit. If you are allowed to buy points, make sure to ask how much it will cost and the terms of purchase.
  • Factor in future costs, such as increasing fees. Maintenance and other fees, as well as taxes, may increase annually with inflation. Will you be able to afford these fluctuations? These fees and taxes are due even if you don’t book any stays.
  • What happens if you want out? Getting out of a timeshare agreement or vacation club membership is often difficult and stressful. Check to see if they offer an exit program and how it works. Ask about cancelling your vacation club membership and make sure to get it in writing.

Watch Out for Scams

Scammers use many tactics to defraud timeshare owners. Here are a few to look out for:

  • The Resale Scam - Scammers and unscrupulous companies talk owners into paying them to sell their timeshares. They often ask for upfront fees and lie about their ability to sell your timeshare. In addition to the upfront fees, they typically ask for more money for unexpected expenses. After they are paid, they do little or nothing at all.
  • Timeshare Exit Scams - Scammers use public records to contact timeshare owners, offering to help get them out of their agreement. They often guarantee results and may even say they can help you make money by selling. They ask for payment in advance and once they receive it, they do nothing. Some may simply contact your timeshare on your behalf with no results. They may encourage owners to stop paying timeshare mortgages and fees.

Before you agree to any service, be aware it is very difficult to sell timeshares. The market is oversaturated and it is often impossible to sell. First contact the timeshare developer or the resort’s management company for assistance. Look at your contract agreement paperwork or use the American Resort Development Association’s (ARDA) tool to help you identify the company that you need to contact.

Always check out the reseller and their reputation. Confirm that they are properly licensed with the real estate licensing agency in the state where the timeshare is located. Ask about fees and don’t pay until the timeshare is sold. Ask for and verify references of previous clients. Ask the business how they will advertise your timeshare. Get all promises, terms, and guarantees in writing. Go over the agreement carefully with someone you trust and that is knowledgeable on the subject. Ask about cancellation procedures should you no longer want to engage their services. Most importantly, report scammers by filing a complaint with BCA, the state attorney general, and the Federal Trade Commission (FTC).

Follow BCA on Facebook to stay updated on scam alerts, consumer tips, and trending industry topics.

About Business Consumer Alliance Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.