Don't Get Taken In A Timeshare Tax-Deduction Scam

The timeshare related fraudsters hell bent on separating you from your hard earned money do not take a break and seem to come up with ever more clever ways of taking advantage of you.

With tax season here, I've heard from an increasing number of consumers who have been promised a tax deduction of upwards of $25,000 if they “donate” their unwanted timeshare…for a hefty fee of up to $5,000 of course.

Legitimately donating a timeshare is almost impossible and trying it usually results in an IRS audit and fines.

Here are some tips and things to remember before doing business with anyone claiming to “help” you donate your timeshare:

*  If you donate anything else such as a car, clothing or money, there is no “fee” to do so.  Why then, would there be a fee to donate your timeshare?

*  The timeshare owners I've heard from were contacted by a third party, NOT the purported charity. The Red Cross, Disabled Veterans of America, Goodwill, the United way, etc. do not work with third parties.

*  All of the companies initiated contact.  No legitimate company will ever initiate contact.  This goes for resale, rental, listing, transferring, "getting out of" and donations.

*  A charity cannot accept a donation if it comes with an ongoing liability and annual maintenance fees are an ongoing liability

Your timeshare does NOT have a $25,000 value, or a $15,000 value, or in most cases, even a $7,000 value.  Timeshare is not an investment and the value of it does not increase over the years.  Here is a definition of Fair Market Value that should clear things up: Fair market value is the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts.

If the legitimate charity receives anything (doubtful in most cases), it will be a nominal amount of no more than a few hundred dollars which comes directly from the fee the company is charging you, NOT from the value of your timeshare, which as stated above, the charity does not want and cannot take

If you own a timeshare that you no longer need or want, here are some tips:

*  Seek out unbiased information on how to use it better, including alternate exchange companies or renting it.

*  Call the resort and inquire if they will buy it back from you.

*  If you decide to sell it, only work with those organizations that you contact first and that do not require an upfront fee or give you any promises about selling

Bottom line is don't do anything before checking with an unbiased source of information.   That source of information is NOT the one trying to convince you of anything.

The Return of the Vacation Education Series

Back in 2008, the timeshare exchange company Dial An Exchange invited me and a few others within the timeshare community to speak on all matters of timeshare issues at their Vacation Education Series in Phoenix.  I had a great time and the nearly 250 timeshare owners provided great questions and subsequent feedback about these no-cost, no-selling informative meetings.

Dial An Exchange repeated this again a few years later in Orlando and again, timeshare owners appreciated the information provided by myself and the other guest speakers.

Flash forward to 2015 and Dial An Exchange is once again on the road with their VES.  This time, they begin in San Diego on March 22nd.  Although I was not invited to speak this time, I sat down with Susan Friedline, Business Development Manager with DAE to ask her some questions:

Q.        Can you tell our readers a bit about the genesis of these sessions?

DAE has offered similar education sessions several years ago.  As a consumer focused company, we feel strongly about offering on-going education to Timeshare/Vacation owners.  There have been so many changes that have occurred since the early years when Timeshare was first sold.  We are confident that by offering resources, information, and a forum to answer many of the questions, we can help the industry, and ultimately owners  find the value and satisfaction in what they purchased, and own.

Q.        What factors were involved in deciding who in the timeshare community to involve as co-sponsors and/or speakers? 

The VES has been established to be a forum for owners to learn, and ask questions.  It was important to DAE, that the co-sponsors and moderators also feel strongly about the educational need for owners, as well as to offer a vast amount of resources, rather than ‘selling’ their products. 

Q.        Who is your target audience?  Timeshare owners, prospective owners, people who are just curious?

Our target audience is focused on anyone who is a Timeshare/Vacation owner.  We welcome a new owner, but find that most of the questions are coming from owners with 5, 10, 15+ years of experience.  The San Diego location was chosen based on the large percentage of owners who reside within a 20 mile radius.   We will be traveling to locations were owners live, rather than where they own their vacation property

Q         How will the sessions be structured?

We are focusing on 5 key Topics. The structure will be arranged in a ‘round table’ format.  All attendees will get an opportunity to meet with an industry ‘moderator’, covering each of the most urgent issues today.

Q         Since there’s no cost to the timeshare owner, what does DAE and the co-sponsors hope to gain from the sessions? 

We feel strongly that an educated owner will be more satisfied with their ownership, educate their families/friends,  stay engaged with their resort, and continue to enjoy ‘what they own’.  We hope to offer resources to them for any on-going questions and/or needs they may in the years to come. 

Q         Are the sessions really “no-sell”…no one is going to try to sell anyone anything?

The Vacation Education Series has been created to maintain a neutral environment for owners to learn, and ask questions.  Each sponsor will have a table, and an opportunity to explain what they do,  the knowledge they can offer, and answer any direct questions an owner may have; whether it is concerning scams, title transfers, re-sales, how to understand the resort financials, etc….. The information during the 3 ½ hour session is based on current concerns, and providing resources and answers.

Q         Will the speakers change in each city?

This will depend a lot on the moderators choice, and schedule.  We are excited to continue to bring more information, and more knowledge based on feedback from each session.  This may mean trimming the sessions, or perhaps increasing the topic offerings.

Q         Should consumers come with specific questions?  Will they be able to get on-on-one time with speakers and co-sponsors?

We would expect owners to already have questions. At DAE, we are frequently fielding questions from member/owners.  Yes, owners will have a choice to visit with co-sponsors following the event.

Q         What do you want the take-away for consumers, timeshare owners or not, to be?

We would love for owners to leave the event feeling like they have answers and resources to call upon during the life of their ownership.  We want them to realize the industry is thriving; but changing,  and that ownership continues to offer  a  great value and an opportunity to continue enjoying vacations in condominium setting, creating life-long memories!

To register for the VES in San Diego, visit  http://tiny.c/learn1 or contact Penny Fulcher toll-free 877.822.1242 or by email: penny.fulcher@daelive.com.

You Can Talk About A Seismic Shift Or Cause It

At how many public symposiums, events, conferences, meetings, etc.  did Apple executives talk about the need to invent "a better portable music system" or a "game changing cellular phone"? How many press releases did they circulate saying that they understood that there was a need to change these things?

NONE.

They just did it and changed the world forever for the better.

There's a lesson in there.

Contrary to what everyone says, it doesn't take everyone to "be" a seismic shift.  It takes executives and leaders at one company to cause a seismic shift.  Not everyone at every other company has to get onboard at the outset, but if the shift is needed and results in a better way, there's really only two alternatives...help with the seismic shift or get buried by it.

The 11 Most Common Timeshare Mistakes

1)    Buying the first one you see

There are approximately 6,000 timeshare resorts out there and there is no such thing as the “best” one.  Don’t get caught in the trap of purchasing the first one you see or look at online.  Also, remember that if it sounds too good to be true, it generally is.

2)   Believing everything you hear, good or bad

This goes from the salesperson trying to sell you the timeshare, to your neighbor who says that all timeshares are crap.  It is YOUR money, it is YOUR vacation and it is YOUR decision.  Read reviews, talk to people, check out blogs and then make your own informed decision.

3)   Forgetting to bank your week

You’ll typically remember about 10% of what the salesperson or online company tells you about timeshare.  Then you’ll start planning your next vacation and find out that your week has “expired” because you didn’t bank it.  Send yourself a few reminders or voice mail messages in advance so you don’t forget next time and have a bad experience.

4)   Not reading the fine print

Yeah, we know that the documents are very long and typed in very small print.  Read them anyway.  All of them.  And remember that no matter what the salesperson told you, if it is NOT in the documents, you shouldn’t pay attention to it because the written documents are the only things that matter.

5)   Not showing up for the annual HOA meeting

If you can’t attend the meeting, then find out who will be representing you and other owners and make your voice heard.  There’s no excuse to complain when you haven’t exercised your vote.

6)   Not getting educated

Knowledge is power and hundreds of timeshare owners have lots of knowledge and lots of power.  Check this blog, online forums to start with or get other recommendations.

7)   Believing that RCI and II are your only exchange options

They aren’t…no matter what the salesperson said.  Joining a smaller exchange company such as Dial An Exchange, Trading Places International, Platinum Exchange and/or SFX (to name a few) offer you great benefits and usually lower fees than the big two.  Although these are not necessarily better than the big two, you should take advantage of as many options and benefits as you can.

8)   Not understanding the difference between points and weeks

BIG difference.  Location plays no part in trading power if you own points and it is everything if you own weeks.  If you own points and don’t pay attention to your “window of opportunity” you may find yourself out of luck for a decent vacation that year.

9)   Thinking that a brand name timeshare is somehow better than a non-branded timeshare

There is no such thing as the “best” timeshare for everyone.  The so-called “brand name” timeshares do offer some nice perks that piggy-back on some of their non-timeshare properties.  They are also generally more costly.  Look into all of your options, but pay attention to what is important to you.

10)  Buying at a resort that is NOT a member in good standing of ARDA (American Resort Development Association)

Among other things membership in ARDA does is provide and abide by a Code of Ethics.  This code is in effect to help you, the consumer.  Before you buy any timeshare, you should find out if they are a member in good standing.  You can find out more about ARDA, their code of ethics and find out if the resort you are interested in is a member by visiting ARDA.org and clicking on “Understand the Ethics Code.” 

11) Doing it all yourself

6,000 timeshare resorts, points and weeks, “new” timeshares vs. “used” timeshares, sales pitches and online sites with different information…how are you supposed to make the right choice?  We don't sell, rent, buy, broker, list, transfer any timeshare or get any kickbacks or commissions from anyone we may suggest you work with.  That way you can be assured that you're getting unbiased and independent information.

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