Is Your Timeshare or Travel Club Legit?

Ed Perkins tells how to separate honest suppliers from outright scams.

By
<a href="http://www.smartertravel.com/all/?content_type=column&author=ed" target="external">ED PERKINS</a><br/><a href="http://www.smartertravel.com/" target="external">SmarterTravel</a> Contributing Editor
March 25, 2010, 11:35 AM ET
4 min read

Aug. 13, 2010— -- Everywhere you turn, someone is trying to sell you something. Often, the pitch is that spending some money with them now will "save" you lots more later. When even the honest suppliers are as hungry as they are in today's economy, it isn't easy to separate honest over-the-top sales pitches from the outright scams. And travel "clubs" are among the most problematic "opportunities" dangled in front of you. A reader who was considering a pitch asked:

"How can I tell if this travel club offer is legitimate?"

Clearly, if someone could hand you a reliable "scam-meter," you'd have no problem. Sadly, nobody has such a meter, and so you often find it hard to tell the difference. Although I can't provide a foolproof answer, either, you can at least ask some questions.

What Kind of Travel Club Is It?

That's not as easy to answer, you might think—travel "clubs" come in a range of sizes and styles:

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  • Many are nothing more than benign—if a bit overblown—sales techniques. That gamut ranges from resorts that call themselves "Club something" for a bit of snob appeal to the many online sales operations that require you to "register" and "become a member" before you can buy a ticket or arrange a room. Membership fees, if any, are nominal. Many of those, of course, are perfectly good places to go/shop, ranging from Club Med to Sam's Club. Here, "club" is nothing more than harmless marketing hype.
  • Also benign are those clubs and associations that bundle together a mix of programs for travelers, including AAA, AARP, the several oil company highway clubs, single-matching services, and others. Many offer hotel and other travel discounts, in addition to their core services. The discounts they claim may be no better than you could get through open discount sources, but they're usually not worse, either.

    • Timeshare and Vacation Club Scams

    The problem club operations are those that ask for big bucks in up-front "membership" fees, on the promise that "members" will get great deals in the future.

  • Among these, the more benign subset consists mainly of timeshare promotions in disguise—presumably to avoid the "timeshare" label, widely viewed as flawed.
  • But not all of these are benign, and that's the problem. All too often, say law enforcement officials, the promised "discounts" and "savings" never materialize: The promoters provide prices that are no better than travelers can buy openly, through a wide range of discount sources, and the promised "dream" vacations never seem to become available.

    • What Do I Get for the Money?

    In a base timeshare proposition, what you actually buy is a one-week "interval" (or set of intervals) at a specified resort, usually with automatic membership in an exchange operation that allows you to exchange your interval with others of equivalent value or classification. Check the fine print on the exchange, especially for limitations on how you can use your exchange "points." In other promotions, all you get is a glowing promise of really great prices—which may remain nothing but glowing promises.

    What Is My Ongoing Obligation?

    In most timeshare-based clubs, your buy-in is only the start. You're also on the hook for various monthly/yearly "maintenance" payments and assessments. And the operator typically reserves the right to increase these payments without your approval or right of refusal.

    Is There an Escape Clause or Resell Limitation?

    Timeshare promoters seldom agree to accept a return, even for a reduced price, and some may limit your ability to resell. The travel literature is full of horror stories of people who just want to get rid of ongoing timeshare payments, even if it means giving the interest back to the promoter with no return.

    What to Look for in a Timeshare

    Is There Any Asset Value?

    Some very high-end vacation clubs actually own a string of vacation properties; members share in the ownership of these properties, and the club operator agrees to repurchase for a reasonable price. Most mass-market timeshares, however, offer no asset value to back up your initial "investment." At best, you own your "membership" and can sell it or pass it along to your heirs. However, some timeshare deals are for the term of your life only and revert to the owner on your death.

    Are the Claimed Discounts Real?

    Beyond the resort aspects, challenge all claimed "discount" deals. Don't be gullible: Ask about the specifics of a few available discount deals, and check them out before you accept any broad claim of great prices.

    What Do Other Travelers Say?

    The club's promotional materials probably highlight a bunch of gushing testimonials. Don't take them at face value—promoters can easily satisfy enough travelers to show a few actual deals. Instead, Google the promotion or club and check with a few of the gripe sites to see if the operation has generated any serious complaints—or, even worse, law enforcement actions.

    What Else Can I Do?

    Beyond asking these questions, check the promotion for some of the more obvious additional clues to a possible scam:

  • Scam clue number 1: A promotion claiming that you have "won" something or have been "specially selected" for something. If you didn't knowingly sign up for a sweepstakes run by some outfit you know, just about any other "winner notification" is almost surely a scam. Ignore it.
  • Scam clue number 2: A promotion demanding that you "act now" or lose the deal. If a deal is honest, it will still be there after you take a day or two to check it. The only time it's even remotely safe to sign on the spot is when you live in a state with a "cooling off period" law for such deals.

    • Ed Perkins is a contributing editor to SmarterTravel and a respected commentator on all aspects of the travel industry, including passenger comfort and rights, travel insurance, the best credit cards for travelers, and car rental fees. SmarterTravel provides expert, unbiased information on timely travel deals, the best value destinations, and money-saving travel tips.