Investment Scams They Dont Want You to Know

I was poolside when my wife walked up with a mischievous grin. “Do you have plans tomorrow at 10:00?” she asked, after handing me a Long Island Iced Tea.

Um, no, but I have a feeling I do now.”

Well, we don’t have to go, but I signed us up for two more free nights,” she replied.

Now I understood the grin. How can I pass up two more nights? We were wrapping up a month in Mexico with a few days at the Presidente InterContinental Resort, and she was finagling a couple of more nights free.

I always recommend against timeshares because they usually cost more to unload then they are worth, but since I had never actually heard the pitch before, I was curious. The following morning we were held captive with the promised two free nights as our negotiated ransom.

Besides, we had some time to kill and two free nights at our favorite resort in Cancun seemed fair. Regardless, I always enjoy a good sales pitch, but unfortunately, this wasn’t one of them.

I walked into the presentation certain I wouldn’t buy anything, but I secretly hoped they were offering a good deal. We’ve spent about six weeks total during the past few years at this resort, so if the numbers made sense, I wouldn’t mind being able to return at a discount.

The problem was, neither my wife nor I, could understand their pitch. The salesman repeatedly showed us amazing photos of all of the places we could visit, but it was too complicated. Every time we asked how much it would cost to stay at these exotic places, he threw out random prices.

Maybe $39, $499, or $2900 a week,” he answered.

Well, which is it?” Heather asked.

No clear answer, and to make it worse, he couldn’t explain how many times a year we could take these trips with our membership. The only thing he was certain about was the $26,000 price tag, but that was only the sticker shock price. I’ve done enough in sales to know we would be going down from there.

Meanwhile, every ten minutes or so, the room full of other couples and their salesmen would stand up clapping and cheering. Apparently the celebration indicated another sale—I mean “member” as they referred to them.

These people can’t possibly understand what the hell they are buying, I kept thinking.

Predictably our salesman quickly shifted from the $26,000 and went to the monthly payment. I interrupted his pitch and asked what they were charging in interest.

Nineteen percent sir,” his answer was initially quite until he jumped back to the “affordable monthly payment.”

Even after I made it clear we wouldn’t finance anything at nineteen percent, he insisted on returning to the monthly payment.

After more cheering and celebrating, it struck me what these people were buying. They were buying the idea of the pictures. Even though they did not understand the terms, the monthly payment seemed affordable.

I began losing interest in the salesman and wondering how many people sit through similar pitches for automobiles, investments, real estate or other high ticket investments, and are just as confused as I was. It must happen hundreds of times a day, over and over again.

Rarely do people question salesman out of fear sounding stupid. However, if a salesman cannot explain his pitch so you understand, he is the one that is uniformed, or intentionally complicating things. Either way you should run the other way.

This “investment,” like most other bad investments, was extremely complicated. The more complicated the terms, generally the worse the investment is for the buyer, and the better it is for the seller.

If you don’t understand every aspect of what you’re getting into, and the salesman is unable or unwilling to explain, walk away.

Photo: Chuck Rylant

4 Replies to “Investment Scams They Dont Want You to Know”

  1. Funnily enough, I used my mom’s, which was paid in full, and I was forced to endure one of those presentations. Then I was asked to purchase, and pressured even when I had no money. As time wore on, I settled and purchased and now that I can’t afford the full monthly payment, I’m looking for ways out.

    I almost went with this company until they said they charged $2495 to give me documents to begin the dispute — and then said that paying the timeshare… would be unnecessary but that they could “help” me tell the Credit Bureaus my side as I fought the company.

    Right now, I just want out — without ruining my credit!

  2. Hi Lauryn, I’m sorry to hear about your story. I’ve heard this too many times. There was a lady that commented on my youtube video that says she helps people sell their time shares.

    I do not know anything at all about her, so I don’t have anything good or bad to say, but it may be a place to check out. Here is a link to the video and look for her comment:
    http://youtu.be/8GpmYtkJVGE

  3. Getting into a timeshare can be very easy, getting out, not so much. Many vacationers purchase timeshares with the intention to travel around the world, some others pretend to buy the vacation property as a financial investment (which is actually unwise move), while some of them were practically pushed into it. Whichever the reason is, the truth is that loads of timeshare owners regret their purchases.

  4. The timeshare industry has been into the lion’s mouth for the last couple of years, and it has generated lots of controversy and discussions in many forums and blogs on the web. However, since we’re living an economic downturn, anyone would expect that the timeshare sales collapse, but instead of that the sales seem to be increasing… but this comes with a trap: timeshare scams are increasing too. That leads us to the question: then, why keep people investing on timeshares?

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