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FTC vs. Timeshare Scams: Case Studies

Timeshare scams cost Americans millions annually, but the FTC is fighting back. Through legal actions, partnerships with law enforcement, and consumer education, the FTC has exposed fraudulent schemes, recovered assets, and issued refunds to victims. Key takeaways include:

  • Common Scams: Fake buyer promises, high-pressure tactics, and upfront fees disguised as taxes or closing costs.
  • Notable Cases:
    • Pro Timeshare Resales LLC scammed owners out of $15M; victims received partial refunds averaging $332.
    • Information Management Forum Inc. defrauded consumers via telemarketing, with refunds averaging $945.
  • Consumer Tips: Avoid upfront fees, verify credentials, and research companies before committing.
  • Legal Help: Law firms, like Aaronson Law Firm, specialize in timeshare contract cancellations and can protect your rights.

The FTC’s efforts show that scams can be stopped, but prevention and swift action are key. Stay vigilant and seek professional help if needed.

Major FTC Cases Against Timeshare Scams

The Federal Trade Commission (FTC) has taken strong action against timeshare scams, exposing fraudulent schemes that have cost consumers millions. Two key cases illustrate how these scams operate and the consequences for those involved.

Case Study: Pro Timeshare Resales LLC

Pro Timeshare Resales LLC

From November 2011 to December 2016, Pro Timeshare Resales LLC orchestrated a large-scale scam, defrauding timeshare owners out of at least $15 million. The company preyed on individuals desperate to sell their timeshares, claiming they had buyers or renters ready and promising quick sales. Victims were charged upfront fees as high as $2,500.

Once the fees were paid, the company demanded more money for fake closing costs, and refund requests were routinely denied.

"Con artists take advantage of timeshare owners who have been in tough financial straits and are desperate to sell their timeshares", said Charles A. Harwood, Acting Director of the FTC’s Bureau of Consumer Protection.

The FTC’s legal action led to strict penalties. Pro Timeshare Resales LLC and its principals were permanently banned from providing timeshare resale services and telemarketing. They were also forced to surrender valuable assets, including homes, vehicles, a Rolex watch, silver coins, and a diamond ring. These assets were used to compensate victims.

The FTC distributed 8,088 refund checks totaling nearly $2.7 million. Each refund averaged $332, which, while helpful, represented only a small portion of the victims’ total losses. This case underscores the FTC’s determination to combat timeshare fraud and recover funds for affected consumers.

Case Study: Information Management Forum Inc.

Information Management Forum Inc

Information Management Forum Inc., also known as Vacation Property Marketing, ran a smaller but equally deceptive scam targeting timeshare owners. Led by Edward Lee Windsor, the operation charged victims between $500 and $2,000 in fraudulent fees.

In July 2012, the FTC, in collaboration with the Florida Attorney General, filed a lawsuit against the company and Windsor. Through unsolicited telemarketing calls, they falsely claimed to have buyers or renters ready to purchase timeshares. Their actions violated the FTC Act, the Telemarketing Sales Rule, and Florida’s Deceptive and Unfair Trade Practices Act.

The scam was particularly insidious as it targeted individuals listed on the Do Not Call registry. Victims were tricked into paying "registration fees" based on false promises.

A federal court swiftly intervened, halting the operation and freezing the defendants’ assets. By 2013, the court permanently banned Windsor and his company from selling timeshare resale services and engaging in telemarketing.

In June 2017, the FTC sent 338 refund checks totaling more than $319,000 to victims, with an average refund of $945. The higher average refund compared to the Pro Timeshare Resales case reflected the smaller number of victims and the successful recovery of assets.

Both cases highlight the FTC’s unwavering commitment to holding scammers accountable. The bans and asset seizures serve as a warning to others, reinforcing that exploiting vulnerable timeshare owners comes with severe consequences.

Common Timeshare Scam Tactics

Cases brought by the FTC against Pro Timeshare Resales LLC and Information Management Forum Inc. highlight the deceptive strategies at the core of timeshare scams. These methods are designed to mislead and exploit, making it crucial for consumers to recognize them to avoid falling victim.

Timeshare scammers often initiate contact through unsolicited calls, emails, or texts. They may exploit public records to impersonate brokers, real estate agents, or even government officials, creating an illusion of legitimacy. Some go as far as pretending to be law firm staff or government representatives to gain trust. Once they establish contact, they lure victims with false buyer claims designed to spark urgency and quick decisions.

These fabricated buyer claims are a hallmark of timeshare fraud. Scammers promise quick sales and large payouts, often using enticing but baseless statements like:

"The market is ‘hot,’ so we’ll sell your unit fast." – Timeshare Resale Ad
"We have lots of buyers ready to purchase your timeshare." – Timeshare Resale Ad
"We guarantee you’ll get big returns on your resale." – Timeshare Resale Ad

Such promises prey on timeshare owners eager to escape rising maintenance fees or burdensome contracts, pushing them toward hasty decisions.

Another common tactic is demanding upfront fees. After convincing victims of buyer interest, scammers ask for payments ranging from $500 to $4,000, disguised as legitimate expenses like listing fees, advertising costs, or taxes. These demands are often paired with high-pressure tactics, where scammers create a false sense of urgency. They claim offers are time-sensitive or that delays will result in losing a buyer or missing out on favorable market conditions, discouraging victims from researching the company or seeking advice.

The FTC tracks these schemes by analyzing consumer complaints submitted through platforms like ReportFraud.ftc.gov, monitoring ads, and collaborating with state attorneys general and law enforcement agencies. The FBI has also noted an increase in timeshare scams, particularly those targeting older, wealthier individuals. James Smith, assistant director of the FBI’s New York Field Office, emphasizes the sophistication of these scams:

"Though timeshare scams have been perpetrated for many years, the consequences on the victims remain real and serious. Many of the scammers who commit timeshare fraud are well-practiced in their abilities to defraud unsuspecting customers. When opportunities appear ‘too good to be true,’ it’s often because they are."

Geographic targeting is another strategy used by scammers. The FBI has reported a surge in scams targeting timeshare owners with properties in Mexico. Internationally, regions like Spain’s Costa del Sol have seen operations that have defrauded victims of millions. This global reach underscores the importance of vigilance no matter where the timeshare is located.

Adding to the challenge, scammers frequently operate under multiple aliases, making it harder for consumers to verify their legitimacy and for authorities to track them. This tactic, combined with a focus on older adults – who may be less familiar with scams or more vulnerable to high-pressure sales tactics – makes this group a frequent target. Scammers often exploit the frustration of owners dealing with rising fees and the difficulty of reselling their timeshares.

These deceptive practices highlight the importance of skepticism and due diligence when dealing with unsolicited offers or promises that seem too good to be true.

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Protecting yourself from timeshare scams is crucial, and recent Federal Trade Commission (FTC) cases highlight strategies to safeguard your interests. Here’s a breakdown of practical tips to avoid falling victim to scams and how Aaronson Law Firm can provide the legal help you might need.

How to Avoid Timeshare Scams

Do your homework before committing. Before attending any timeshare presentation, take time to research. Check for complaints online, verify the seller’s reputation with state and local consumer agencies, and ensure the resale company is properly licensed. Don’t hesitate to request client references for added peace of mind.

Don’t let anyone rush you. Scammers often use high-pressure tactics, but legitimate offers don’t expire overnight. If someone insists the deal is "only available today", question why. Take your time to review all documents independently and away from the sales pitch. Always get promises in writing.

Understanding your right of rescission is critical. This “cooling-off period” allows you to cancel a contract within a specific timeframe – usually 3 to 10 days depending on your state. Before signing anything, ask about this right and ensure the cancellation process is clearly outlined in writing.

Calculate the full costs upfront. Beyond the initial purchase price, factor in all fees, taxes, and ongoing expenses. Specifically, ask about annual maintenance fee increases and whether there’s a cap on those costs. These fees can escalate over time and catch many owners off guard.

If the timeshare includes an exchange program or points system, dig into the details. Understand how points are valued based on factors like unit type, location, time of year, and length of stay. Many buyers later discover that their points don’t go as far as they were led to believe.

Watch for resale scam red flags. Be cautious of unsolicited calls, emails, or texts offering to help sell your timeshare. Scammers often make bold claims like:

"Your timeshare will sell quickly", or "it will sell within months."

Legitimate resellers typically charge fees only after a sale is completed. Be wary of anyone asking for large upfront payments or advising you to stop paying your mortgage or maintenance fees – this can severely harm your credit.

Verify credentials and insist on written agreements. Any company you work with should provide a clear, written outline of services, fees, and timelines. If they refuse or try to rush you through the paperwork, walk away immediately.

Aaronson Law Firm

If preventive measures fall short, professional legal help can make all the difference. FTC cases show that timely legal intervention is often necessary when scams succeed. Aaronson Law Firm specializes in timeshare contract cancellations, offering targeted services for those caught in fraudulent schemes.

Why choose a law firm over exit companies? Unlike timeshare exit companies, Aaronson Law Firm is staffed by licensed attorneys who are legally bound to act in your best interest. As the firm explains:

"Unlike timeshare exit companies, we are actual attorneys. That means that we have a fiduciary and legal obligation to put our client’s interests first."

Licensed attorneys can negotiate directly with timeshare companies, represent you in court if needed, and take legal action against fraudulent practices – services that exit companies simply can’t provide.

The firm’s comprehensive legal services include timeshare contract cancellations, legal demand letters (also known as Rescission Predicate Correspondence), credit protection services, and litigation support. Their team focuses exclusively on timeshare-related cases, ensuring specialized expertise.

Aaronson Law Firm offers free initial consultations to review your case. During this session, they’ll examine your timeshare contract, determine whether your rights were violated, and craft a personalized strategy to resolve your situation.

The firm has a proven track record of success, including canceling a client’s timeshare agreement within just four months.

Financial relief is another key benefit. Aaronson Law Firm helps protect your credit score and can assist in halting payments and maintenance fees once the legal process begins, providing immediate financial breathing room.

Personal finance expert Suze Orman underscores the importance of professional legal help in these situations:

"As hard as it is to spend more money on this, a solid lawyer with experience in dealing with timeshares and real estate foreclosures is going to be a good investment for you right now."

Getting started is simple. Gather all relevant documents, including your timeshare contract, sales materials, account numbers, and any correspondence with the timeshare company. If you’re behind on payments, seek legal help immediately to minimize further financial harm.

Aaronson Law Firm understands that no two timeshare situations are the same. Their tailored legal strategies and exclusive focus on timeshare law ensure you receive the detailed attention needed to effectively cancel your contract and move forward.

Conclusion: Key Lessons from FTC Cases

The FTC’s actions against timeshare scams reveal just how sophisticated and damaging these schemes can be, often raking in millions before authorities step in. These cases highlight the importance of staying informed and acting quickly to protect yourself.

Take the Pro Timeshare Resales case, for example. It showed not only the scale of harm these scams can inflict but also how limited the financial recovery can be, even after enforcement. When the FTC issued refunds, victims only got back a small portion of what they had lost.

FTC Attorney Gideon Sinasohn summed up a key takeaway with a simple warning:

"Demanding a large fee in advance is a huge red flag."

The broader lesson from these cases is clear: staying vigilant and acting swiftly are your best defenses. Consumer awareness remains a powerful tool, as highlighted by earlier strategies like spotting warning signs and verifying credentials before making any commitments.

The numbers are staggering. According to the Better Business Bureau’s Scam Tracker, 9,403 travel, vacation, and timeshare scams were reported in 2025 alone. These scams persist because, as Michelle Corey, President and CEO of the St. Louis Better Business Bureau, points out:

"These companies know there is a vulnerable population of people to prey upon."

With the timeshare market projected to grow from $13.52 billion this year to $23.83 billion by 2034, more consumers are likely to encounter these challenges, making them prime targets for fraudulent schemes.

When prevention fails, seeking professional legal help can make all the difference. The FTC cases demonstrate that victims who worked with qualified attorneys often fared better than those who tried to handle the complex cancellation process on their own. Licensed lawyers can identify contract violations, negotiate with timeshare companies, and offer the expertise needed to untangle these legal issues.

The takeaway is simple: timely action matters. Whether it’s recognizing the warning signs before signing, using your right to cancel during the cooling-off period, or turning to legal experts like Aaronson Law Firm when trouble arises, these steps can minimize losses and protect your interests.

FAQs

How can I tell if a timeshare resale offer is legitimate or a scam?

To figure out if a timeshare resale offer is trustworthy, the first step is to check whether the reseller is a licensed real estate agent or broker in the state where the timeshare is located. Licensed agents must adhere to specific rules and regulations, which can offer some protection against fraud.

Be especially wary of unsolicited offers, particularly those that rely on high-pressure sales tactics or make promises of quick sales at prices that seem too good to be true. Stay away from companies that demand upfront fees or fail to provide clear and transparent contact details. If something doesn’t sit right, trust your gut and dig deeper.

Also, request references from previous clients and verify their experiences. Following these precautions can help you steer clear of scams and connect with a reseller you can trust.

What should I do if I think I’ve fallen victim to a timeshare scam?

If you think you’ve been caught up in a timeshare scam, it’s crucial to act quickly to shield yourself from further harm. Start by cutting off all communication with the suspected scammers. Then, secure any financial accounts they may have accessed to prevent additional losses. Gather every piece of evidence you can – contracts, emails, transaction records, and any other relevant documentation.

Next, report the scam to the proper authorities. Agencies like the Federal Trade Commission (FTC) or the FBI’s Internet Crime Complaint Center (IC3) are equipped to investigate and might even help stop others from becoming victims.

Finally, reach out to a legal professional who works with timeshare cases, such as Aaronson Law Firm, to explore your options for canceling the contract and protecting your finances. An experienced attorney can walk you through the process and help you steer clear of further troubles.

Why should I choose a law firm specializing in timeshare cancellations instead of a timeshare exit company?

When you work with a law firm that focuses on timeshare cancellations, you’re getting professional legal representation from licensed attorneys who adhere to strict ethical and professional guidelines. These firms can offer legally enforceable solutions to help you cancel your timeshare contract while safeguarding your rights.

On the other hand, many timeshare exit companies operate without the proper legal credentials. Their questionable methods might not only fail to resolve your issue but could also expose you to additional financial risks. By choosing a specialized law firm, you can rest assured that your case is being managed with skill and a commitment to your best interests.

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Jerrod Williams