Did you know? Over the last five years, more than 6,000 Americans have lost $300 million to timeshare scams tied to properties in Mexico. Timeshare fraud is a growing issue, especially for older adults, and scammers use tactics like fake resale offers, rental schemes, and contract exit fraud to steal money.
Here’s what you need to know to protect yourself:
- Common scams include resale/rental fraud, fake contract exit services, and upfront fee schemes.
- Red flags: Demands for upfront payments, high-pressure sales tactics, vague contracts, or promises that seem "too good to be true."
- How to protect yourself: Research companies, verify licenses, review contracts carefully, and avoid untraceable payments like wire transfers or cryptocurrency.
- What to do if scammed: Stop communication, secure your accounts, gather evidence, and report to authorities like the FTC or your state attorney general.
Quick tip: Always consult your timeshare developer before paying third-party companies for resale or exit services – many scams can be avoided this way. Stay alert and protect your investment!
Common Types of Timeshare Fraud
Timeshare scams come in various forms, and scammers often target owners who may not be fully aware of the risks. Below, we’ll break down some of the most common schemes designed to exploit timeshare owners. Knowing these tactics can help you spot red flags and protect yourself.
Resale and Rental Scams
Resale scams are one of the most frequent tricks used by fraudsters. Here’s how they work: scammers pose as legitimate resellers or real estate agents, promising to sell your timeshare quickly, often claiming they can get you a price higher than what you originally paid. They’ll use convincing tactics to build trust, but their endgame is to request upfront fees for services like marketing or administrative costs. Once they have your money, they disappear, leaving you with no sale and no way to recover your funds.
Rental scams follow a similar playbook. These fraudsters offer to rent out your timeshare, promising you a steady income stream. They’ll ask for upfront payments to cover listing or marketing expenses, but no renters ever materialize. Instead, they pocket your money and move on to their next target. Scammers often reach out uninvited and use high-pressure tactics, urging you to act quickly before you can think through your decision.
Now, let’s look at scams targeting those eager to exit their timeshare contracts.
Exit and Cancellation Fraud
Exit and cancellation scams prey on timeshare owners desperate to break free from their contracts. Fraudulent companies claim they can help you escape your obligations, sometimes even suggesting you could make money in the process. A high-profile case in November 2022 saw the FTC and Wisconsin attorney general take action against companies that used scare tactics to coerce owners – primarily older adults – into paying over $90 million for services that were never delivered. Victims were often lured to high-pressure sales events at hotels or restaurants, where they were told to act immediately to avoid ongoing fees