Timeshares and Travel Clubs: How to Avoid a Scam

Follow these tips to avoid making a timeshare or travel-club purchase you’ll regret.

The idea of owning a little slice of heaven—or getting deep discounts on future trips—can be intoxicating, especially when you’re promised free gifts or free travel just for attending a “short informational meeting.” But sometimes those sales pitches can lead to a travel club- or timeshare-induced hangover, leaving you not quite sure how a fast-talking salesman got you to part with thousands of dollars for a product you might not fully understand.

Of course, not all timeshares and travel clubs are bad news. Although the word “timeshare” is perhaps rivaled only by “used car” for its association with historically sleazy sales tactics, the truth is that owner satisfaction rates hover around 80 percent. And while travel clubs that require thousands of dollars in upfront dues should be eyed skeptically, one of the most trusted organizations in the U.S. is actually a travel club of sorts. It’s called AAA.

Follow these tips to avoid making a purchase you’ll regret—or, worse, watching a scam artist walk away with your money without providing anything in return.

Beware the ‘Vacation Feeling’

Timeshare marketers often target people who are already on vacation. This makes sense, of course, because if you’re traveling to Myrtle Beach this year, there’s a chance you’ll be interested in returning to a timeshare next year (and the years after that, too). But the practice also means that consumers have their guard down when they’re hit with the sales pitch.

“You’re on vacation. It’s that first day, and you sort of have that euphoric feeling,” says Mark Huffman, a writer for ConsumerAffairs.com who has covered timeshares extensively. “What happens all too often is that people who end up buying timeshares have never even thought about buying a timeshare until they were pulled off the street, find themselves in a very high-pressure sales situation, and all of a sudden, they’ve bought a timeshare.”

Be especially wary if you’re offered free alcohol. You wouldn’t buy a car while tipsy from piña coladas. Don’t buy a timeshare that way, either.

RELATED: 7 Reasons Why Timeshares Are Criminal

Ignore Talk About ‘Financial Investment’

Howard Nusbaum, president of the American Resort Development Association—a timeshare industry group—calls timeshares “a better way to vacation.” He favorably compares the properties, which typically include kitchens and multiple bedrooms, to a scenario where an entire family shares one hotel room and is forced to eat take-out pizza off of beds. But even Nusbaum cautions against thinking of timeshares as part of an investment portfolio.

“Timeshares are not financial investments. They’re vacation investments,” Nusbaum says. “If someone said, ‘Should I buy this for it to appreciate in value?’ I would say, ‘No. You buy it to use it.'”

The resale market for timeshares is typically weak, with more sellers than interested buyers. Nusbaum says that, while the properties can help save families money by reducing the amount they spend on vacations, people shouldn’t count on being able to sell their timeshares for a profit, or even for what they paid.

If a salesperson is hyping up the prospect of a timeshare increasing in value, Nusbaum has two words of advice: “I’d run.”

Read the Fine Print

A salesperson can say anything during a presentation—from promising that you’ll easily be able to trade your timeshare allotment for Christmas week at a Hawaii resort to claiming that current owners are renting out their timeshares at a large profit—but none of it means anything if it’s not in your contract.

“It’s the fine print that kills you, normally,” says Christopher Elliott, the consumer advocate, travel guru, and author of Scammed. “People think they’ll have a certain number of days, they’ll be able to trade their allotment, and it ends up where there’s nothing available. People get hit with really high maintenance fees that they weren’t expecting. The fine print has all that.”

RELATED: 8 Timeshare Gotchas (and Where to Get Solid Advice)

Sleep On It

At the end of your life, when you list your greatest regrets, buying that timeshare or travel club membership one day too late is unlikely to be among them. So give yourself a 24-hour cooling-off period—after the sales presentation, but before you’ve signed anything—to make sure you really want to buy.

This also gives you the opportunity to research the timeshare or travel club. A simple Google search with the company’s name—along with the words “scam” or “fraud” —may tell you all you need to know.

“The Internet has really tipped the balance of power back to the consumer,” says Huffman. “Bad actors can’t survive very long if people do their research.”

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A sales staff might tell you that a specific offer is good for that day only. That may or may not be true, but either way, it’s not a good reason to make a five-figure impulse buy.

Give Travel Clubs Special Scrutiny

The term “travel club” usually refers to companies that claim to offer their members steep discounts on travel in exchange for a hefty upfront fee (sometimes ranging up to several thousand dollars) and ongoing dues. In reality, though, some of these companies offer only standard discounts that any consumer could get by booking through any online travel agency.

Elliott is blunt in his assessment. “The only legitimate travel club is AAA. Everything else is a scam.”

Nusbaum says he believes that some travel clubs are, in fact, reputable, but cautions that consumer protections are “modest.”

“Travel clubs are a little more uneven [than timeshares], and there’s a little more room for fraud,” Nusbaum says. “There are fewer consumer protections in place, and so you should do your due diligence.”

If the free gift you’re promised for attending a travel club sales presentation sounds too good to be true, it probably is. No one is going to give you a brand new car for listening to a sales pitch. And that “free” weeklong cruise? You might end up paying more in taxes and fees than a consumer paying retail.

RELATED: 10 Worst Travel Rip Offs … and How to Avoid Them

Shop Around

If you definitely know you want to come back to the same destination each year—or if you’ve found a points-based timeshare that you’re confident will allow you to book great accommodations all over the world—you may be ready to buy. But that doesn’t mean you have to buy from the first person you talk to.

There may be resale timeshares available in the location you’re seeking, or even the very same development where you’re considering buying, at a fraction of the price being asked by a developer or marketing agency. Or, if you like the idea of a timeshare but aren’t sure which operators are reputable and which aren’t, you might consider buying from a trusted name. Big hospitality companies like Marriott, Hilton, Starwood, and Disney have all entered the timeshare space in recent years. These companies have national reputations to maintain, making them more likely than fly-by-night operations to try to ensure their customers’ satisfaction.

Watch Out For Resale Scams

Some of the worst scam artists aren’t selling timeshares. They’re pretending to buy them. The scammers target timeshare owners who may be looking to sell, claiming to have a buyer already lined up. The catch? You just need to send an upfront payment to get the process moving.

In reality, the buyer doesn’t exist, and the supposed broker disappears with your money.

“If someone is calling you to buy your timeshare, and you didn’t solicit that call, hang up,” says Nusbaum.

Know Yourself

Are you the type of person who got guilted into inviting long-lost second cousins to your wedding? Are you incapable of trying a free sample at the grocery store without buying the product? If so, be honest with yourself about whether you think you can stand up to high-pressure sales tactics. And if the answer is no, simply don’t attend a sales presentation for a timeshare or travel club—no matter how much you want the free show tickets they’re offering.

“[Salespeople] have all types of psychological games they play,” says Huffman. “If people aren’t willing to buy right away, they pit them against each other, or they humiliate them. Most people can’t stand up to the psychological barrage, and they cave.”

Remember: No one can force you to sign anything, you can leave whenever you want, and you’re under no obligation to be polite to someone who is trying to sell you something.

For travelers feeling pressure, Elliott recommends repeating this mantra to indicate that you’re not interested: “I’m just here for the tickets.”

More from SmarterTravel:

• 8 Essential Rules for Vacation Rentals
• Beware of These Taxi Scams
• The Truth About Vacation Clubs

(Top photo: Silhoutte of Couple on the Beach via Shutterstock.com