Tuesday, June 20, 2006
Buy Time With Care, Do Not Enter The Timeshare Scam Of The Year]
EVER entered a lottery at the supermarket and days later you receive a call? You've won. Well, sort of. There's a catch.
"If you could just come in and watch a 90-minute promotional video..." the operator says.
Or have you heard the latest radio ads? If you have $100,000 equity in your home then, wow, you could own a luxury holiday destination for no cost. It's all part of the hard sell for timeshare scams.
Timeshare scams are just that, buying shared time. Usually they are sold as accommodation at a holiday resort or unit or credits in a club which can be redeemed as a holiday. Potential buyers are often pressured into signing on the spot with "sign-up" discounts. But there are laws and strict regulations governing the sellers of timeshare arrangements.
Under the Corporations Law, timeshare scams are regarded as "managed investments" where money is pooled from lots of different investors to buy shares in an asset. With timeshare, the asset you are buying is time.
The Corporations Law says those selling the scheme, the operator, must hold an Australian financial services licence and provide you with a product disclosure document. It should set out features of the arrangement, fees, benefits and risks, commission and information about the complaint process.
Before signing there are key points to consider.
It is crucial that you find out when you can use the timeshare property. If you think you are going to use it once a year for your annual four-week Christmas break you will be disappointed. Often timeshare is restricted to twice a year, and to only a couple of days at a time.
Remember, you are not buying property. Operators can trap the unwary by selling it as "investment" in property. It is neither an investment nor property.
There really is no re-sale market – so you won't make money from it – and you aren't buying the property, you are buying into a trust which you then use as time. Most importantly, you are entitled to a 10-day cooling off period. It may not be a timeshare scam, but it is not what you think.
EVER entered a lottery at the supermarket and days later you receive a call? You've won. Well, sort of. There's a catch.
"If you could just come in and watch a 90-minute promotional video..." the operator says.
Or have you heard the latest radio ads? If you have $100,000 equity in your home then, wow, you could own a luxury holiday destination for no cost. It's all part of the hard sell for timeshare scams.
Timeshare scams are just that, buying shared time. Usually they are sold as accommodation at a holiday resort or unit or credits in a club which can be redeemed as a holiday. Potential buyers are often pressured into signing on the spot with "sign-up" discounts. But there are laws and strict regulations governing the sellers of timeshare arrangements.
Under the Corporations Law, timeshare scams are regarded as "managed investments" where money is pooled from lots of different investors to buy shares in an asset. With timeshare, the asset you are buying is time.
The Corporations Law says those selling the scheme, the operator, must hold an Australian financial services licence and provide you with a product disclosure document. It should set out features of the arrangement, fees, benefits and risks, commission and information about the complaint process.
Before signing there are key points to consider.
It is crucial that you find out when you can use the timeshare property. If you think you are going to use it once a year for your annual four-week Christmas break you will be disappointed. Often timeshare is restricted to twice a year, and to only a couple of days at a time.
Remember, you are not buying property. Operators can trap the unwary by selling it as "investment" in property. It is neither an investment nor property.
There really is no re-sale market – so you won't make money from it – and you aren't buying the property, you are buying into a trust which you then use as time. Most importantly, you are entitled to a 10-day cooling off period. It may not be a timeshare scam, but it is not what you think.
# posted by John @ 4:37 AM 
