Scams Targeting Timeshare Owners

The FBI is reporting that it has seen a rise in scams targeting timeshare owners. Older adults, in particular, are being targeted, and victims have lost more than $300 million to these scams over the past five years.

“Timeshare fraudsters aim to suck their victims dry, with devastating consequences to victims’ financial futures, relationships, and physical and emotional health,” FBI Assistant Special Agent in Charge Paul Roberts said in a written statement.

Many of these timeshare scams involve properties in Mexico and are run by Mexican cartels, according to the FBI. The agency is working to detect and prevent these scams but is warning timeshare owners to be aware of how these schemes work and what to do to avoid them.

How timeshare scams work

According to the FBI, timeshare scams happen in three phases. 

Phase 1: Scammers pretending to be U.S. or Mexican-based timeshare brokers or sales representatives call or email and tell timeshare owners that they need to exit their timeshare, rent it out or invest in share certificates for their timeshare. Then, they tell timeshare owners that they must pay fees or taxes to secure these deals.

The scammers appear legitimate because they are fluent in English, create fake company websites, draft contracts and offer bank documentation to bolster their claims. And they will ask for more and more fees until victims run out of money or refuse to pay.

Phase 2:  After time has passed, scammers reach out again to victims and claim to work with a law firm that wants to help them recoup their money. They say that the initial scammers have been charged with fraud and that their victims are owed restitution from a settlement. To collect their money, though, victims are told they must pay an advance fee.

Phase 3: The scammers then claim to be officials from the Mexican government’s Financial Intelligence Unit, OFAC, or with an international police organization such as Interpol. They either tell victims that they want to help them recoup the money they’ve lost or that their payments to the scammers were linked to money laundering or terrorist operations and must pay to avoid prison.  Again, the goal is to get victims to pay more money.

[ See: Watch Out for Online Hotel Booking Scams ]

Warning signs of timeshare scams

Legitimate timeshare brokers and foreign government officials won’t contact you and ask you to do any of the following:

• Pay upfront fees or taxes to secure timeshare-related deals;
• Request you to provide or sign power of attorney forms;
• Ask for payments to receive a settlement;
• Threaten to subpoena you to appear in court outside the U.S.; or
• Threaten to prosecute or arrest you if money isn’t paid.

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How to avoid timeshare scams

Take these steps to protect yourself against timeshare scams and other scams.

• Do not answer calls from numbers you don’t recognize. Let calls go to voicemail to screen them. If someone claims to be calling about your timeshare, call the number of your timeshare company directly rather than any number left in a phone message. 
• Do not make any upfront payments if you receive a call or email from someone claiming to be a timeshare broker or foreign government official. 
• Do not sign or send any power of attorney documents requested by someone claiming to be a timeshare broker or government official.

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If you’ve been targeted by timeshare scammers, file a complaint with the FBI’s Internet Crime Complaint Center at ic3.gov.

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