Timeshare resale scams

Look for these warning signs to detect fraud

Published: June 13, 2015 08:00 AM

Buying a timeshare vacation rental has often been fraught with fraud. Now scammers are targeting owners who want to sell.

During tough economic times, many timeshare owners may decide they can no longer afford their vacation rentals. Or they may have inherited a timeshare as part of a parent’s estate and don’t want to keep it.

That’s where scammers step in. The basic “timeshare resale” fraud works like this: Scammers target likely sellers of timeshares with the promise that they either have a buyer ready to purchase your timeshare or the assurance that they can sell it. All you need to do is pay an upfront fee—usually via a wire transfer—to cover closing costs, services, taxes, timeshare maintenance or other fees. Unfortunately, once you send the money, no sale, rental or purchase is completed and the scammer disappears with hundreds—even thousands—of dollars.

The scam doesn’t always stop there. A second fraudulent business may then contact the victimized owner offering to help recover the money lost in the first scam for yet another fee. As with the first scam, no money is recovered and telephone calls and emails are unanswered.

A recent variation of the scam preys on owners of vacation timeshares in Mexico. The California Department of Real Estate warns:

    “The fraudsters use the names of companies (some of which have professional-looking but usually phony websites, fancy-sounding titles and addresses, and purport to be escrow, timeshare resale, finance, and/or title service businesses) and individuals in California, and   many purport to work with Mexican government officials… It appears that a number of the scammers are or have engaged in identity theft, and are representing themselves as actual California real estate licensees. In those cases, the criminals will use an actual real estate broker’s name and license number in an attempt to legitimize the transaction. If and when the timeshare owner victim calls the broker’s number, which has been provided via email, phone call, postal mail, or on the website that has been created to complete the fraud, the voice of the supposed broker is actually the voice of the scammer.”

Another version, which has been growing in popularity, has the scammer offering to act as an intermediary for a buyer in Mexico (or elsewhere in Latin America) who wants to purchase property in the United States in order to facilitate obtaining an American visa. All the seller has to do is wire a transaction fee…. You know the rest.

To avoid becoming the latest casualty of scammers, follow these steps to stay free of possible fraud:

  1. Be wary of upfront fees. Legitimate fees are typically paid after the sale is concluded or are deducted from the sale price.
  2. If it sounds too good to be true, it probably is. Timeshare resale scammers often promise they have a buyer who is ready and willing to pay a lot in order to get you to send money. Be cautious; no one can promise a quick sale.
  3. Don’t wire money, pay in cash, or send a money order, certified bank or cashier’s check. Money sent by these methods is very difficult for law enforcement officials to help you recover. It’s as good as lost.
  4. Do your research. Don’t be tricked by a fancy address or professional-looking website. Contact the State Attorney General and local consumer protection agencies in the state where the reseller is located, as well as the Better Business Bureau, to determine if there are any existing complaints.
  5. Check with your resort. Find out whether the resort where your timeshare is located imposes any restrictions, fees or other limitations associated with sales. Ask if the resort has its own resale program or has ever worked with the reseller who has contacted you.
  6. Demand everything in writing. Consider having an attorney review the documents before you sign anything.

By staying vigilant, you can ensure that you profit from selling your timeshare, instead of giving the money to a crook.

Catherine Fredman

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