If you're thinking about selling a timeshare, be on the lookout.
Some companies have no intentions of helping you sell. Investigators say they're crooks who are operating an elaborate scheme.
Katina Pendleton found out first hand. She lost thousands of dollars in a timeshare resale scam. A company promising quick results called Katina and asked her if they could sell her timeshare in St. Thomas. She agreed. Then, she got another call.
"She said, 'I have a buyer for your timeshare--she's sitting right here. Blah blah, would you like to talk to her?'"
Initially, Katina was thrilled. She was eager to sell her timeshare. The person posing as a sales agent then asked for money.
"'In order to get this transaction to go through, we would like you to wire me $1000 dollars,'" said Pendleton as she relayed the details of the call.
Katina went to the bank and wired the money for what she was told were closing costs. The scammers sent her a fake contract.
Postal inspectors say this scam is on the rise in a challenging economy.
"The timeshare resale scam is a fraud perpetrated on a lot of elderly people looking to sell and get rid of their timeshares," said Kathryn Scarles, U.S. Postal Inspector.
Thousands of people have lost everything to these scams.
"It's really hard when you see someone lose their life savings," said Scarles. "These scams are so convincing and they are so realistic-sounding and sound legitimate that a lot of smart people get duped."
Katina eventually sold her timeshare.
The best advice is to do your homework. Check out the company through the Better Business Bureau to make sure its an accredited timeshare reseller.
Here are some more tips:
Use a Business You can Trust – Make sure the timeshare reseller you use is a BBB Accredited Business or at the very least has a good rating with BBB. You can check out a business's BBB Reliability Report at bbb.org.
Confirm Licensing Requirements – Some timeshare resellers will use fake addresses or PO boxes in order to mislead timeshare owners. Confirm where the company is located and in what states it does business. Ask if the company's salespeople are licensed to sell real estate where your timeshare is located. If so, verify this with the state licensing board.
Get the Facts on the Figures – Find out if the business charges a commission. Do they handle the entire closing and provide escrow services? Do they charge an up-front listing or advertising fee? What does it cover and is it refundable?
Be Wary of Upfront Fees – Many complainants to BBB were burned by companies charging an advance "appraisal" fee for services or were told that they just had to pay closing costs and the timeshare would be taken off their hands. Consider opting for a company that offers to sell for a fee only after the timeshare is sold.
Don't Fall for the Hard Sell or an Offer that Sounds Too Good to Be True – Don't agree to anything over the phone but instead ask the salesperson to send you written materials; take the time to think it over and don't be pressured. Unscrupulous timeshare resellers may claim that your property is in demand and they can sell it immediately; unfortunately, these promises are often empty.