Helping You Avoid Life's Financial Mistakes

3 Big Internet Scams To Watch Out For

January 7, 2011 By 2 Comments

Lately I’ve been doing some research on the internet and have come across several internet scams that have been going on for some time now.  These scams have been ripping people off and taking advantage of those that are the most valunarable.  In this article I will cover three of these scams.

Debt Relief Scams

The first scam to watch out for is the debt releif scams.  The truth is thier are legit debt relief companies out there and their are some downplayed on the internet as scams which are not such as the Debtmerica Relief Scam.  Then their are some debt relief websites that portray debt relief companies on the internet but are not.

Instead what some of them will do is get you to sign up for their program and once you’ve paid their up front fees they vanish.  This type of scam is what is plaguing the industry and ripping people.  However if you’re still interested in working with a debt negotiation company check out my previous article on how to spot legit debt relief companies.

Timeshare Scams

The next scam you have to watch out for on the internet is the timeshare scams.  If you own a timeshare and you’ve been looking to sell it you may have come across several timeshare resale companies who are offering to list your timeshare on their website, for a fee of course.

The problem is once you’ve paid the fee, usually $500 to $600, they will collect the payments and disappear never to be seen or heard from again.  If you would like to learn more about this scam read my previous article on timeshare resale companies.

PayPal Scams

The final scam is for those who use PayPal.  This scam is by far one of the hardest to spot.  In fact to prove my point I almost fell for this one myself when I recieve in email a few years back from what I thought was PayPal who wanted me to varify my account info.

These scammers went as far as to set up a fake PayPal website that looked identical to the real PayPal site.  However before I did this I contacted PayPal about the situation and they explained to me that it was a scam and that I should discard the message.

To learn more about this scam read my previous article on 5 red flags you should look for on PayPal scams.

Share Your Story

Have you ever been hit up by an internet scam? Share your comments and stories below.

Filed Under: Scams Tagged With: , , , ,

Timeshare Scam Companies: 10 Things You Should Know

May 10, 2010 By 22 Comments

timeshare_scam_companiesAre you in the market to buy a timeshare?  Today timeshares are everywhere, eBay, Craig’s list, and hundreds of other sites around the web and abroad.  In this article I’m going to be covering 10 things you should know about timeshare scam companies before you buy one.

They Use Hard Sales Tactics

The first thing you got to know is that timeshare resorts will use about any hard selling tactic they can to get you to buy.  When I was looking at buying a timeshare we were crammed into a room for over four hours.

They basically they wanted to keep you in their till you cracked and that’s exactly what they do.  In that time they will say anything to get you interested.  If you’ve ever seen the movie Boiler Room you’ll know exactly what I’m talking about.

They Will Give You Anything To Get You To Buy

Next, a timeshare scam company will give you anything to get you to say yes.  First off, they will wine you and dine you.  They will take you out to eat at their resort restaurant to show how great their resort is.

Second, they will give you a free vacation usually for just checking them out.  This is actually the only benefit I could find to going to a timeshare meeting.  However, you may want to read the fine print beforehand.

The resort I got my free vacation from was real but had a restriction that we had to be 25 years of age to use the voucher.  We of course couldn’t use it since we were only 23 at the time, how covenant for them.

High Interest Rates

Third, one of the biggest timeshare scams is that resorts will give you a high interest rate on the loan you take out for your timeshare.   A typical timeshare ranges in $5000 to $20,000 or more and will charge ridiculously high rates.

In fact my loan on the timeshare I bought was right at 16% and the resort claimed I could get it refinanced once I got back home.  However, instead of refinancing the loan I decide to just pay it off and avoid all the refinance fees.

Maintenance Fees

Fourth, every timeshare has maintenance fees.  The reason resorts charge this fee is because once you sign on the dotted line you will in a sense become a part owner of the resort.

The resort will then charge a maintenance fee to cover the cost to run the resort.  However, this doesn’t mean it’s cheap, at my resort I paid around $350 a year and the fee increased as much as 10% every year.

Club Fees

Fifth, once you by a timeshare you will have to pay a club fee in order to bank or exchange your timeshare.  I’m not sure if this required or not but the resort I bought mine from said we had to have it.  The first year of the service is usually free but after that it will cost you.

A typical annual fee runs around $60 to $100.  However if you buy for a longer term you will usually get a cheaper rate.  If would like to learn more about these company check out Interval International.

Exchange Fees

Once you own a timeshare you may not want to go the same resort all the time.  If that is the case you will be able exchange it using companies like Interval International.

However this will also come as a fee as well.  The typical fee to exchange a timeshare with another resort will run around $100.

Impossible To Sell

Seven, timeshares are next to impossible to sell.  I tried selling mine and it took over 4 years to get rid of it.  In fact I recently got an email from someone who said they were in desperate need to sell their timeshare.  This almost a regular occurrence for me to get one or two emails like this every month.

I really feel sorry for these people, especially when I hear that they still have a loan out and can’t get even one offer on the property.

Timeshare Resale Companies Don’t Work

Eight, one of the things people will do in order to sell their timeshare is get in touch with a timeshare resale company.  The short and sweet of it is they just don’t work.

I bought into two different timeshare resale companies and never received one offer in the two years that I had the ads out.  I even called these companies and they claimed they were busy at work trying to sell my timeshare.

The typical fee with a company like this is around $600 and the worst part is they offer no refund at all.  My best advice for you here is to just avoid this timeshare scam altogether.

Timeshares Don’t Increase In Value

One thing I learned the hard way with timeshares was the fact that timeshares do not increase in value.  This was probably the biggest lie I’ve ever heard a timeshare salesman say.

The reason they don’t increase in value is because when you buy a timeshare you aren’t buying an actually piece of land but rather just a piece of time, one week to be exact.

Since time itself doesn’t increase in value the value of your week doesn’t increase at all.  In fact, in most cases they actually are worth a lot less when go to sell, which brings me to my final point.

No Return On Investment

Finally, the worst thing about a timeshare is the fact that you will not get back the money you originally paid for the timeshare.  However there is always that outside chance that it might happen and if it does please leave a comment I would love to hear your story.

In my situation I bought my timeshare for $4500 and ended up selling it back to the resort for $400.  The reality after 4 years of trying to sell the timeshare I couldn’t even find even one buyer.

Your Turn

Now that I’ve educated you a little more on buying a timeshare are you still going to buy one?  I don’t want to scare you away from this if you have your heart set on it but my goal in this article is to point out some of the major pitfalls that go along with a timeshare.

In the end I hope I’ve educated you enough to help you avoid the timeshare scam companies and not get ripped off like I did.

Chris

This article was recently released on the Carnival Of Personal Finance by The Canadian Finance Blog

Filed Under: Timeshares Tagged With: , , , , , ,

Why Timeshare Resale Scams Don’t Deliver

June 29, 2009 By 125 Comments

Have You Fallen For A Timeshare Resale Scam?

Chances are that if you are reading this article you have or are weighing the consequences of signing up for one of these scam programs.  In this article I will be taking you through the ins and outs of these resale programs.

I will be showing why this kind timeshare scam will cost you thousands like it did for me and the best way for you to sell your timeshare.  So if you are looking to resell your timeshare read on.

What is a Timeshare Resale Company?

A timeshare resale company is basically a listing site that advertises you timeshare on their network, for a fee of course.

Back over a few years ago,  I was desperate to sell my timeshare.  Then one day I heard an ad on the radio talking about Timeshares Resale Company.  So I called and talked to them about selling my timeshare.  They informed me that the fee would be $600.  A bit high but after long consideration I decided to do it anyways.

My Results With Signing Up To Timeshare Resale Company

After signing up I figured within 3 to 6 months I would easily have my timeshare sold or at least a few offers on the table.  After 6 months I didn’t even have so much as a phone call.  I hadn’t heard a word out of them.

So I decided to call and get some answers.  This was a task in itself.  The company explained to me that they just advertised my timeshare in their database and were not actually real estate agents.   They did nothing to help sell my timeshare property.

Why Timeshare Resale Companies Are A Scam

The reason why timeshare resale companies are a scam is because once they get you to pay their big upfront fee they don’t have any kind of reason to deliver a result you.  Think about it.  If a real estate agent was selling your home and he couldn’t sell it would he get paid? Not a chance,  but with timeshare resale companies they collect the fee upfront because even they know that they can’t even sell your property.  This is a lesson I learned only after I fell for this scam a second time.

The Timeshare Market Pro Scam

Once you sign up for one of these timeshare resale scam sites they all want in on a piece of the action.  To this day I still receive calls from these scammers asking me if I would like them to sell my timeshare, and I don’t even own it anymore. However, I got a call from a guy named Doug almost a year after I signed up with timeshare resale company.  He worked with another timeshare resale scam company called Timeshare Market Pro.  He proceeded to explain to me that my current timeshare resale company would never sell my timeshare and that their company could. He explained that they will bring in potential buyers to show off my timeshare to.  So I gave it a shot and signed up, again spending nearly $500 to get on this list.  Timeshare Market Pro also informed me that my timeshare market value was worth three to four times what I was trying to get out of it. Over the next 6 months I waited and again got nothing.  So again I called the company back was connected to their operator who informed me that one of their representatives would call me back and update me on the status of my timeshare. They never called back.  At this point I realized I had been ripped off again by another timeshare resale scam.

What I Learn About Timeshare Resale Companies

  • Never pay upfront fees. Altogether I paid around $1100 to fees to these companies and have seen nothing in return.  You could say that Timeshare Resale Companies are the biggest legal scam that I know of.
  • Don’t believe what they tell you. These companies will tell you anything just to get you to sign up.  As with the Timeshare Market Pro Scam I was told I would see several bids within a month.   They also promised a bunch of extra free stuff just for signing up.  I never saw either of these.
  • They use hard selling tactics to get you to buy. Most of these companies will also use hard selling tactics to get you to buy.  They will keep you on the phone as long as it takes to get you to buy.  Don’t fall for it, tell them you sold the timeshare and hang up the phone.  This way they won’t call you back.
  • They don’t REALLY sell your timeshare. Timeshare resale companies don’t really sell your timeshare for you; they just list it like an ad. Here’s the good news though you can sell it for a lot cheaper on other ad networks for next to nothing. I will explain in the next section.

How To Sell Your Timeshare Yourself

Follow these steps and you should be able to sell your timeshare.  You may not make what you got out of it originally but at least you won’t have to deal with those maintenance fees, interval fees and any other charges. In order to sell your timeshare you need to understand that your timeshare resale value will never be what you bought it for.  In most cases you will only get about 10 cents on the dollar of your original purchase price.  I know this is hard to accept but the quicker you can do that the quicker you will be able to sell your timeshare off. Last but not least before I start if you have a mortgage on your timeshare you will have a more difficult time in selling your timeshare.  If you can at least get out of your timeshare what you still owe on it I would take it.  You’ll be lucky to get more than that.

So if you’re ready and accept what I’ve told you read on.

  1. Call your timeshare resort. Tell them you want to sell your timeshare and would like the necessary paper work to do so.  At this point you can also ask them any questions about what you should do if you find a potential buyer.  This way you can make the transaction smooth and quick.
  2. Advertise your timeshare. I would start with Craig’s List and eBay.  Craig’s List is free so I would start there first.  Keep your price low so you can attract a lot of bidders.  If that doesn’t work try eBay.  You will have to pay to advertise your timeshare but it will be a lot cheaper than those timeshare resale scams I mentioned earlier.
  3. What if you can’t sell your timeshare. When you’re trying to sell your timeshare some locations will sell better than others.  For example Florida has a tough market to sell your timeshare in.  On the other hand Hawaii is much easier to sell in.  With limited supply and beautiful view it’s no wonder these resorts sell a lot easier.
  4. Ask for a buyback option. If you’ve made it to this point you may be desperate to sell your timeshare.  With no bids and the maintenance fee due soon, call your timeshare resort back and ask if they have a buyback option.  This is where the actual resort buys your timeshare back for a fraction of the price.  In my example I bought my timeshare for $4500 and did a buyback option 5 years later and got only $400 back for it.  It was a rip off but it was better than paying another year of maintenance fees.

Have You Ever Had Luck With Timeshare Resale Companies

I have never heard of anyone having any luck with any of these Timeshare Resale Companies like Timeshare Market Pro.  So I will challenge this, if you have ever had any luck with any of these companies leave a comment and tell me about it.  I would love to know if one of these timeshare resale scams have ever worked.

Chris


Filed Under: Timeshares Tagged With: , , , , , ,

Financial Money Traps: Why Timeshares Are A Trap And How To Get Out Of Them

December 15, 2008 By 23 Comments


Are you trying to sell your timeshare?  If you have fallen into this money trap you will want to read this post.  If you are interested in buying a timeshare and want to know all the pitfalls and money traps you will want to read this post as well.

Today’s post is all about financial money traps and in particular my personal biggest money trap that I’ve recently been through, timeshares and how to get out of them.  Then in the next post I’m going to talk about some of the smaller money traps I’ve faced and how to avoid them.

I was going to do just one article on all the money traps I’ve fallen into but felt this particular subject on timeshare needed it’s own space.

Why Are Timeshares Are A Bad Buy

With all the money I’ve invested into my timeshare and the little return I got back from it this has been my biggest stumbling block ever.  Personally though I am the only one to blame for the situation I am in.  I made the decision to buy it and as a result of poor education on the subject I paid the price, almost $7000.

Believe me though when I tell you sales reps for timeshares will literally tell you anything to get you to buy a timeshare.  In fact when I bought mine they took me out to lunch for a free meal and even gave a free trip to the virgin islands just for taking a look.  This may be the only good thing about the whole process.  However they’re a few things that you need to realize.

  • Timeshares aren’t an investment. When I bought my timeshare are sales rep informed us that it will grow in value as time goes on and you can sell it for more.  This is totally false.  Timeshares do not grow in value.  They are no more than just a time slot which you own at a resort not the actual real estate itself.
  • Timeshares are very hard to sell. If you wanted to sell your house you could put a for sale sign in the front yard but with a timeshare in say ARUBA, how would you sell it?
  • Timeshare loans have high interest rates. If you aren’t buying your timeshare straight up then you will have to take a loan on it.  My timeshare had a 16% interest rate on it.  You can bet I paid it off quickly.
  • Timeshare exchanges are expensive. To exchange your timeshare to another resort destination say Hawaii you will have to pay what is known as an exchange fee for around $100 to go to a different resort.
  • You have to pay for the maintenance at your timeshare. This can be costly when owning a timeshare.  Even when you have the timeshare paid completely off you still have to deal with maintenance fees.  Mine was over $600 every two years and that’s not all.  They usually increase it by 10% a year.
  • You have to pay for timeshare membership fees. Finally, once you do have a timeshare you have to pay membership fees to a timeshare network in order to use your timeshare or exchange it to go some place else.  These fees can usually range for about a few hundred dollars just to be a member.

As you can see even if you do buy a timeshare and own it free and clear it will still cost you.  Now am I saying all timeshares are bad.  No, I’m saying that timeshares have a lot of pitfalls that someone with no education on the subject can fall into a bad money trap like I did.  So how do you go about getting out of this money trap?

4 Ways To Sell Your Timeshare

When you are going about trying to sell your timeshare there are good ways to do it and some terrible and expensive pitfalls to watch out for.  Below are 4 ways to sell a timeshare, and only 3 of the 4 are recommended ways to do so.

  1. Listing Services. I don’t recommend this option.  A timeshare listing service is usually an online service where you pay them an up front fee of usually around $600 to list your timeshare with them.  Trust me when I tell you these services don’t work.  I have spent nearly $1200 with these services thinking they would send me some prospective buyers and I got zero offers form both companies I listed with.  Though if you or someone you know has had luck with these services let me know and leave a comment below.
  2. Timeshare broker. I’m not sure if this is a viable option but this would be like hiring a real estate agent to sell your property for you.  The reason why this would be better than going through a listing service is because the broker only gets paid unless they sell the property but do know that the broker will get paid a portion of the money you make when you sell the timeshare.  If you have more information about this option leave a comment below and let us know.
  3. Sell it yourself. With websites like eBay out there selling your timeshare, this may be a great option if you would like to do it yourself.  Though you should know you may or may not get the price you want out of it and if you do sell it yourself your timeshare could force you to pay a title transfer fee around $150 or more and the next years maintenance fees.
  4. The Buyback option. If you can’t find a buyer and just want to cut your ties with the timeshare call your timeshare and see if they have a buy back option.  Though you should know that you will only get about 10 cents on the dollar back out of it but at least it will be out of your hands.  The timeshare may also make you pay the next years maintenance fees as well.

Did the above information help?  I hope it did.  I know how much pain this has caused me and hope I can inform others so they don’t fall into this terrible trap.

Do you have a timeshare?  Are you considering buying one?  If you are leave a comment tell me about your situation.  Is it a money trap or do you like it?

Freatured in The Carnival Of Personal Finance #184: From The Land Down Under

If you like this post also read this post on Timeshare Resale Scams.

Filed Under: Timeshares Tagged With: , , ,