Sunday, April 20, 2014

Timeshare Rentals: The Biggest Lie of Them All?

South Carolina timeshare law prohibits timeshare sales people from lying to potential purchasers, or marks. However, that does not stop timeshare sales people from making fraudulent statements to marks or targets. Specifically, South Carolina timeshare law prohibits timeshare sales people from telling targets that the timeshare is an investment or that the target will somehow profit from rental income. A simple Google search will reveal more reports of these lies told by timeshare sales people in South Carolina and on Hilton Head Island that anyone reasonably has time to review.

Telling folks that their timeshare purchase will be an investment, something that will make the buyer money, is wrong. Promising folks that they will profit from their purchase through rental income is also wrong. These two lies are particularly abhorrent because, not only does the person buying the timeshare lose when they exchange their money for a timeshare (I have seen Hilton Head Island timeshares sell for $1.00 on eBay), but the person also loses out on the promised rental income from the timeshare.

The timeshare company may mislead the purchaser into believing that the timeshare company will actually rent out or sell the purchaser's timeshare on the purchaser's behalf. It makes no sense, of course. If the timeshare company could rent out someone's timeshare week for a profit above and beyond the purchase price, why would they sell them to people instead of renting out the weeks for themselves? Regardless, this lie is told, and you can find it reported time and time again about timeshare companies and sales people in South Carolina and on Hilton Head Island for over a decade.

The keys to the scam include putting off the purchaser until the rescission period has expired and then telling the purchaser that he or she must contact the sales person directly in order to list the timeshare week for rental/sale. After the rescission period, the sales person simply stops answering his or her phone, returning your calls, and responding to your e-mails. When you call the office, the sales person is not available or no longer works there, of course. You may even make an appointment to see the sales person, and when you arrive, you discover that the sales person will not be attending the scheduled meeting because, well, you can make up the reason.

But the most effective key to the scam is using phantom discounts to the purchase price to con the purchaser into believing he or she is receiving some rental monies upfront and that they are being applied to the purchase price as a discount at purchase. For instance, if the purchaser is promised $2,000.00 a year in rental income for the annual timeshare week, the sales person may reduce the initial purchase price from $20,000.00 to $14,000.00, telling you that the timeshare company is going ahead and paying you the $2,000.00 rental income for the first three years as the basis for the $6,000.00 discount.

Of course, this is a lie. And what the mark does not know is that the sales person has the discretion to reduce the sales price and is simply making the reduction in price and telling you that the reduction represents the first three years' rental income. This could put you off for three years or more before you might inquire further about the rental income. Not only does that get you past the rescission period, but some statutes of limitations are three years. Are you still waiting for the check in the mail from the timeshare sales person for the rental or sale of your timeshare week?