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Study: Trends in Timeshare Exit Fraud

Timeshare exit fraud is a growing problem, costing victims millions and leaving them emotionally and financially devastated. Scammers target frustrated timeshare owners, especially older adults, with fake promises to help them cancel contracts or resell properties. They use high-pressure tactics, demand upfront payments, and even impersonate government officials or legal professionals.

Key Takeaways:

  • Common scams: Fake resale offers, bogus cancellation services, and fraudulent tax demands.
  • Who’s targeted: Older Americans, middle-income families, and financially struggling timeshare owners.
  • Financial impact: Victims lose thousands, face credit damage, and remain stuck in contracts.
  • New tactics: Scammers use AI for fake voices, documents, and websites, making fraud harder to detect.
  • How to protect yourself: Avoid upfront fees, verify companies, and contact your resort directly for exit options.

Timeshare fraudsters exploit desperation, but understanding their methods and staying cautious can help you avoid becoming a victim.

Rising Fraud Cases and Geographic Hotspots

Fraud related to timeshare exits is spreading across the U.S., and the numbers are staggering. From 2019 to 2023, nearly 6,000 victims lost close to $300 million to timeshare resale scams alone, according to FBI data. And that’s just one slice of the problem – there’s no doubt the overall impact is far greater. These figures highlight not only the growing number of cases but also the increasingly sophisticated tactics scammers are using.

In 2024, the BBB ScamTracker flagged timeshare scams as one of the most troubling types of fraud, showing how these schemes are evolving and expanding. With 9.1 million U.S. households owning timeshares as of 2025, scammers have a massive pool of potential targets to exploit.

As these scams spread, fraudsters are sharpening their methods, making it harder than ever for victims to spot the red flags.

New Scam Methods

Today’s scammers are getting more creative – and more dangerous. They’re leveraging advanced technology like AI to manipulate victims more effectively. For example, AI-driven tools can spread misinformation or even fake voices, making fraudulent calls sound eerily convincing.

While old-school methods like cold calls and phishing emails are still in play, scammers are now using more elaborate tactics. They often operate under fake names and titles, sometimes claiming to represent government agencies or other trusted organizations. This false authority helps them build credibility before springing their traps.

Classic scams like bait-and-switch schemes are also evolving. Fraudsters might lure victims with what seems like a legitimate offer, only to upsell them on costly services later. Scare tactics are becoming more common, too – fraudsters create a sense of urgency by threatening legal trouble or financial penalties unless the victim acts immediately.

Another popular ploy is promising quick exits or lucrative resale deals, often requiring high upfront payments. Once the money is handed over, the scammers disappear. To appear legitimate, these operations often feature polished websites and professional-sounding business names.

Social media has become a key hunting ground for these scammers. Platforms allow them to target specific groups with tailored ads or direct messages, making it easier to connect with potential victims. This multi-channel approach makes avoiding these schemes increasingly difficult.

Who Scammers Target Most

Scammers don’t cast a wide net – they’re strategic about who they target. Vulnerable groups are their primary focus, with older Americans being hit the hardest. Individuals aged 60 and over filed 101,068 complaints and reported $3.4 billion in losses across all types of fraud, making them a prime target.

Why older Americans? They often have more disposable income, may be less familiar with modern scam tactics, and are more likely to trust a professional-sounding caller. Many of these individuals also own timeshares purchased decades ago, back when sales practices were less regulated, making them ripe for exploitation.

Scammers also prey on timeshare owners facing financial struggles or looking to sell their properties. Desperation can lead these individuals to overlook warning signs, making them easy targets for promises of quick exits.

A 2025 survey sheds light on the frustrations of timeshare owners:

Complaint % of Owners Affected
Rising Maintenance Fees 76%
Misrepresentation During Sale 64%
Booking Issues/Availability Problems 59%
Inability to Resell or Transfer 53%
Aggressive Sales/Upgrade Pressure 41%

Rising maintenance fees, which affect 76% of owners, are a major pain point. Scammers exploit this by monitoring online forums and social media for frustrated owners, then swooping in with offers of relief.

Middle-income families are also frequently targeted. Many feel trapped by timeshare agreements they can no longer afford and lack the resources to seek legitimate legal help. Fraudsters capitalize on this by offering low-cost, fraudulent “exit services” that seem like a lifeline.

"Timeshare fraudsters aim to suck their victims dry, with devastating consequences to victims’ financial futures, relationships, and physical and emotional health." – Paul Roberts, Assistant Special Agent in Charge, FBI New York

The emotional and financial strain faced by these groups creates an ideal environment for scammers to thrive, leaving victims deeply scarred – long before they even realize they’ve been conned.

How Timeshare Exit Fraud Affects Victims

Timeshare exit fraud leaves victims grappling with both financial devastation and emotional turmoil. It’s a one-two punch: they lose significant amounts of money while remaining stuck in their original timeshare contracts. The fallout affects everything from their finances to their mental well-being, creating a ripple effect that’s hard to escape.

Money Lost and Credit Problems

The financial toll of these scams is staggering. Timeshare scams are the second most costly travel scams in the U.S., with reported losses reaching $617,000. But the real damage goes beyond these numbers – individual stories reveal how deeply these schemes cut. Fraudulent exit companies often demand upfront fees ranging from $1,000 to over $30,000. For example, an elderly woman in Denver lost $14,000, while 300 Florida residents collectively lost a jaw-dropping $15 million to a single scam.

The financial damage doesn’t stop with the upfront losses. Many scammers advise victims to stop paying their timeshare mortgages and maintenance fees, a move that can wreak havoc on their credit. Steve Baker, a former Federal Trade Commission official, explains the risks:

"Timeshare owners who follow such advice run the risk of having the resort foreclose on their mortgage, as well as having their credit damaged and facing possible tax consequences."

  • Steve Baker, former Federal Trade Commission (FTC) official

This disastrous advice often leads to:

  • Foreclosures and plummeting credit scores
  • Relentless collection agency harassment
  • Tax issues, including liens or penalties from forgiven debt

Repairing the credit damage can take years, requiring victims to meticulously comb through reports from Experian, Equifax, and TransUnion to address issues like missed payments or defaults. But even as they work to recover financially, the emotional toll can be just as overwhelming.

Emotional Impact on Victims

The emotional fallout from timeshare scams is profound. Victims don’t just lose money – they lose their peace of mind, trust, and, often, their self-esteem. Many place their faith – and life savings – in these fraudulent companies, believing they’ve found a solution to their timeshare woes. Instead, they’re left with the crushing realization that they’ve been deceived, compounding their financial struggles with feelings of betrayal and despair.

FBI Assistant Special Agent in Charge Paul Roberts highlights the full extent of the harm:

"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

The emotional strain manifests in various ways:

  • Shame and anxiety over falling for the scam
  • Tension in family relationships, as financial stress creates rifts
  • Loss of trust in others, including legitimate businesses
  • Health problems, like chronic stress or related physical ailments

Older adults often bear the brunt of this emotional impact. For retirees, the financial losses can spell potential ruin, leaving them with little time or resources to recover. Family dynamics also take a hit – spouses may blame each other for trusting the scammers, while adult children worry about their parents’ future. These strains can linger for years, creating emotional scars that outlast any financial recovery.

ADIC Smith underscores the enduring nature of this suffering:

"Though timeshare scams have been perpetrated for many years, the consequences on the victims remain real and serious."

  • ADIC Smith

For many, the experience leaves lasting emotional wounds. Victims often become overly cautious, unable to trust even legitimate offers, and fearful of making financial decisions in the future. The damage isn’t just about the money – it’s about the loss of confidence and security that’s far harder to rebuild.

The serious harm caused by timeshare exit fraud has led to a strong response from both federal and state authorities. With victims facing significant financial and emotional losses, agencies are taking action to crack down on fraudulent companies while also introducing stronger protections for consumers. This two-pronged strategy combines tough enforcement with new safeguards, offering victims multiple ways to seek justice and recover their losses.

Government Actions and New Laws

Federal and state governments are stepping up to address the growing problem of timeshare exit fraud. Their efforts highlight the scale of the issue and their commitment to protecting consumers.

In November 2022, the Federal Trade Commission (FTC) and the Wisconsin Attorney General filed a lawsuit against Consumer Law Protection and its affiliated companies. These businesses allegedly scammed consumers – primarily older adults – out of more than $90 million through misleading claims and aggressive sales tactics. They promised timeshare exit services they never delivered, used scare tactics about heirs inheriting unwanted timeshares, and made false guarantees about refunds.

Minnesota has been particularly active in tackling these scams. In January 2025, Attorney General Keith Ellison announced settlements with three companies – Encore Law Inc., Last Resort Consulting, and Tradebloc. These firms violated Minnesota’s debt settlement laws by charging high upfront fees without proper licensing. The settlements resulted in $269,378 in refunds to affected consumers and required the companies to comply with state regulations moving forward.

"I hate to see unethical companies promise help to Minnesotans stuck in costly timeshare contracts, only to rip consumers off again. I’m glad to announce that three timeshare exit companies have agreed to refund consumers and comply with Minnesota law going forward. I hope these settlements put others on notice that if they do not follow the law, we will hold them accountable." – Attorney General Keith Ellison

The Department of Justice has taken a stronger stance on criminal cases as well. In May 2025, William O’Hanlon and Karen Stefanowski pled guilty to wire fraud and conspiracy for operating fraudulent companies – Williams Andrews & Burns and Ryan James & Daniels Corporation. Between 2016 and 2023, they scammed timeshare owners aged 55 and older by collecting upfront fees for services they never performed.

Financial institutions are also joining the fight. The Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Assets Control (OFAC), and the FBI issued a joint alert to financial organizations, helping them detect suspicious transactions and money laundering tied to timeshare fraud.

Some states have gone a step further, introducing new regulations to protect consumers. These laws require timeshare resellers to provide clear disclosures, prohibit false advertising, and prevent companies from collecting fees until the timeshare is successfully transferred. Additionally, many states now mandate that timeshare exit companies obtain licenses as debt settlement service providers, adding another layer of oversight.

As enforcement tightens and new laws take effect, victims have more opportunities to recover their losses and hold fraudulent companies accountable.

Victims of timeshare exit fraud have several legal paths to pursue justice and recover their money. Whether through lawsuits, demand letters, or government-backed restitution programs, quick action is essential to protect their rights.

Legal demand letters are often the first step. These formal notices inform timeshare companies of contract violations and initiate the cancellation process. When prepared by skilled attorneys, demand letters can successfully terminate contracts and stop debt collection harassment. For example, Aaronson Law Firm uses these letters as part of its strategy to cancel timeshare contracts and protect clients from further harassment.

For those scammed by fraudulent exit companies, direct lawsuits can help recover lost funds and address ongoing timeshare obligations. Attorneys can negotiate with timeshare developers to cancel contracts while pursuing restitution from the fraudulent companies. Government lawsuits can also lead to significant relief. In 2021, a Washington state lawsuit against a timeshare exit company resulted in a $2.61 million settlement, providing restitution to victims. Similarly, Arizona’s 2016 settlement with Diamond Resorts included $650,000 for consumer restitution, allowing misled consumers to relinquish their timeshares and avoid an estimated $25 million in future fees.

Victims should also file complaints with relevant agencies. The FBI’s Internet Crime Complaint Center gathers reports that can trigger federal investigations, while state attorneys general often have consumer protection units to address both individual and widespread cases. The Federal Trade Commission (FTC) maintains databases that help identify fraud patterns and coordinate large-scale enforcement efforts.

For victims whose credit has been damaged by fraudulent advice to stop paying timeshare fees, credit protection services are crucial. Specialized attorneys can work with credit bureaus – like Experian, Equifax, and TransUnion – to fix negative marks while negotiating with timeshare companies to resolve contracts. This approach helps prevent long-term credit damage, which often adds to the financial burden caused by fraud.

The legal landscape continues to evolve as courts and lawmakers recognize the complexity of these scams and the vulnerability of their victims. This shift has led to harsher penalties for fraudsters and larger financial recoveries for those affected.

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Future Fraud Threats and Predictions

As technology advances and enforcement efforts intensify, timeshare exit fraud is evolving in unsettling ways. Scammers are deploying increasingly advanced tools to exploit new vulnerabilities, making it more important than ever for consumers to stay alert. The shift is moving toward scams that are more convincing, leveraging modern technology and emerging trends in the market.

AI and Technology in Fraud Schemes

Artificial intelligence is reshaping the way fraud is carried out. A recent survey revealed that 92% of financial institutions are encountering generative AI in fraud, with 44% identifying deepfakes and 60% highlighting voice cloning as major challenges. Scammers are using AI to create fake documents, videos, and even chatbots that mimic human interactions, enabling them to launch highly targeted and convincing attacks.

One alarming example of this comes from March 2025, when Forbes reported a case in France where a woman was tricked into sending over $850,000 to someone she thought was actor "Brad." The scammer used AI-generated images and voice recordings to create a convincing facade. As Anusha Parisutham, Senior Director of Product and AI at Feedzai, explains:

"Today’s scams don’t come with typos and obvious red flags – they come with perfect grammar, realistic cloned voices, and videos of people who’ve never existed."

The financial toll of such scams is staggering. In 2023 alone, fraud losses exceeded $10 billion, marking a 14% increase from the previous year. AI-driven impersonation fraud now accounts for 82% of all fraud attempts. In just the first quarter of 2024, government impersonation scams involving cash payments cost consumers $20 million.

For timeshare owners, the risks are escalating. Scammers are using AI to produce deepfake videos and forged documents, making it harder to distinguish between legitimate offers and fraudulent schemes. Financial institutions are also struggling to adapt, with 97% reporting difficulties in verifying identities. Social engineering tactics powered by AI are a growing concern, with 56% of professionals identifying them as a major threat. These scams often misuse personal data to craft tailored schemes targeting timeshare contracts, family finances, and more.

But AI is not the only tool transforming the timeshare fraud landscape.

More Fake Resale Platforms

The timeshare resale market has become a breeding ground for increasingly elaborate scams. Fraudsters are setting up fake companies with professional-looking websites, fabricated testimonials, and even fake staff profiles to appear legitimate. These platforms lure victims with promises of guaranteed rental income or unusually high returns, preying on timeshare owners desperate to exit their contracts.

The tactics are becoming more sophisticated. In the past, scammers might have simply collected upfront fees and disappeared. Now, they employ layered schemes, offering initial services to build trust before demanding additional fees for "unexpected complications" or extra steps. Steve Baker, a former FTC official, explains:

"What some of these exit companies do is get you to pay them several thousand dollars and transfer the time-share to the company. Then the exit company simply calls the resort and says, ‘I’ve got this time-share, can you let me out?’ The resort company agrees, and you just paid somebody a lot of money for something you could have done yourself."

New trends in timeshare ownership, like fractional ownership and alternative models, are also creating opportunities for fraud. Scammers are targeting owners with promises of converting traditional timeshares into more flexible arrangements or offering so-called "upgrades" that claim to reduce fees or improve contracts. These schemes exploit those already struggling with the financial burden of their timeshare agreements.

The threat is expanding geographically, too. Scammers are increasingly targeting owners in Mexico and other international markets. In some cases, these schemes have even been linked to cartels, adding a layer of physical danger to the financial risks.

Technology is making these fake platforms more convincing than ever. Scammers use AI to generate fake reviews, create professional websites, and even produce fraudulent video testimonials from supposed satisfied customers. They also rely on data analysis to identify vulnerable targets, such as elderly individuals or those under financial strain.

The consequences for victims often go beyond the initial scam fee. Many find their credit damaged after following fraudulent advice to stop paying timeshare fees. Others face tax complications from improperly handled transfers or remain legally tied to their original contracts, even after paying thousands to fake exit companies.

These trends highlight the importance of staying informed and cautious. Fraudsters are constantly refining their tactics, making it critical for consumers to verify every claim and scrutinize any service offering quick fixes or unusually high returns.

"The biggest tip I would give clients to avoid pretty much any financial-related scam is to never feel pressured to act immediately and absolutely never provide funds to anyone until you have done extensive research to confirm the validity of the group you are speaking with." – Rand Millwood, CFP®, CIMA®, AIF®

As scams grow more sophisticated, the line between legitimate and fraudulent services becomes increasingly blurred. Staying vigilant and conducting thorough research are essential to avoid falling victim to these evolving schemes.

How to Protect Yourself from Timeshare Exit Fraud

Protecting yourself from timeshare exit fraud starts with recognizing warning signs and thoroughly verifying any offers before sharing your money or personal information.

Spot the Red Flags

Understanding the tactics scammers use is key to staying safe. One of the biggest red flags is unsolicited contact – legitimate companies won’t cold-call timeshare owners. Be cautious of anyone promising a quick sale or guaranteeing contract cancellation. As a BBB spokesperson warns:

"You should be extremely wary of anyone who approaches you about exiting a time-share or claims that they have a buyer for you – especially if they ask for an up-front fee."

Other warning signs include requests for large upfront payments, advice to stop paying your mortgage or maintenance fees, and invitations to seminars or group presentations offering free meals. High-pressure tactics, such as being pushed to sign up for credit cards or being held for hours during presentations, are also clear indicators of a scam.

Laurie L., a Hilton Grand Vacations member who has encountered several scam attempts, offers a practical tip:

"An easy way to tell if someone is trying to scam you is by asking, ‘Is this going to cost me anything out-of-pocket?’ If yes, I tell them I’m not interested." – Laurie L., Hilton Grand Vacations Member

Do Your Homework Before Paying

Before committing to any timeshare exit company, take the time to research thoroughly. Start by searching the company’s name online alongside terms like "scam" or "complaint." Check their Better Business Bureau (BBB) rating – aim for an A+ rating – and closely review the Business Detail section for any hidden history.

Pay attention to how long the company has been in business and whether their contact details (address, phone number, email, and website) are clearly provided. Look for genuine customer reviews on platforms like BBB, Google, or Facebook, and examine both the number and nature of complaints.

You should also contact the state attorney general and local consumer protection agencies where the company is based. Verify whether the company’s agents are licensed to sell real estate in the state where your timeshare is located, as this is often required for legitimate resale activities. These steps can help you ensure you’re dealing with a trustworthy company.

Insist on Written Agreements

Never rely on verbal promises alone. Always get every detail in writing before signing anything or making a payment. Look for clear terms, including a written cancellation policy or cooling-off period.

If selling your timeshare, work with a real estate broker who operates on commission rather than demanding upfront fees. Legitimate resellers typically charge fees after the timeshare is sold, not before.

Reach Out to Your Resort

Many timeshare owners aren’t aware that their resort might offer exit options. Contact your resort directly to explore their owner exit programs, as this could be a safer and simpler solution.

Trust Your Gut

If something feels off, listen to your instincts. Legitimate companies won’t pressure you to make snap decisions or refuse to let you call back later. If you’re feeling rushed, ask for time to think it over.

Consider Professional Legal Advice

Timeshare contracts can be complex, and consulting with an attorney who specializes in timeshare law can be a smart move. Legal professionals can help you understand your rights, review contracts, and guide you toward legitimate exit strategies. For example, Aaronson Law Firm focuses on timeshare contract cancellation and offers free consultations.

Legal advice can be especially helpful in identifying scams, as fraudsters are constantly refining their methods. A qualified attorney can provide the clarity and support you need to navigate these challenges confidently.

Always avoid upfront payments for services that guarantee results. Verify any claims independently, and remember – if an offer seems too good to be true, it probably is.

FAQs

How can I make sure a timeshare exit company is trustworthy before paying them?

How to Identify a Trustworthy Timeshare Exit Company

When evaluating a timeshare exit company, start by digging into their reputation. Check reviews and ratings on reliable platforms like the Better Business Bureau (BBB) and other consumer review sites. A good company will have a track record of positive feedback and clear, honest practices. Be wary of any business that demands upfront payments or pressures you to make quick decisions – these are often warning signs of a scam.

Also, steer clear of unsolicited calls or emails offering timeshare exit services. Reputable companies don’t rely on aggressive or unsolicited outreach. Instead, they’ll provide a clear breakdown of their fees, explain their process in detail, and be upfront about any risks involved. If you’re feeling unsure, it’s a smart move to consult a legal professional who specializes in timeshare matters for extra peace of mind.

What should I do if I’ve been scammed by a timeshare exit company?

If you’ve fallen victim to a timeshare exit scam, it’s crucial to act quickly to limit your losses and safeguard your rights. Start by halting all payments to the scam company immediately. Next, report the incident to the FBI’s Internet Crime Complaint Center (IC3) and your state Attorney General’s office. These steps ensure the scam is documented and may help prevent others from being targeted.

Reach out to your bank or credit card company to dispute any unauthorized charges. If possible, request a chargeback to recover your money. Additionally, consulting a legal professional with expertise in timeshare issues can be incredibly helpful. They can advise you on recovery options and help protect your financial and legal interests.

For further assistance, organizations like the Federal Trade Commission (FTC) and victim support programs offer resources designed to help individuals in situations like this.

What are the safest and most effective ways to cancel a timeshare contract?

If you’re thinking about canceling a timeshare contract, there are a few legal avenues you can explore:

  • Rescission Period: Many states provide a short window – usually between 3 and 15 days after purchase – where you can cancel your timeshare contract without any penalties. Review the terms of your agreement and local laws to see if this option is still available to you.
  • Negotiating with the Timeshare Company: If the rescission period has already expired, you can reach out to the timeshare company directly. They may offer cancellation options, such as a deed-back or buyback program, that could help you exit the agreement.
  • Seeking Legal Help: Timeshare cancellations can be complex, especially if the company is uncooperative. Hiring an attorney who specializes in this area can make a big difference. They can guide you through the process, draft formal demand letters, and even represent you in court if needed.

Since every case is different, consulting a legal professional can help you figure out the best path forward based on your specific situation.

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Jerrod Williams