Timeshare scams have robbed Americans of millions of dollars of their hard-earned money
A 2020 study by the American Resort Development Association found that 9% of the 10 million owners of timeshares wanted to sell them within the next two years.
In some cases, their lifestyles had changed, and in others they could no longer afford to pay maintenance or other fees ranging from hundreds to thousands of dollars.
The latter group would be particularly vulnerable to what are known as “timeshare exit (or resale) scams.”
Unscrupulous companies promise to help timeshare owners sell or rent their properties for upfront fees in the thousands or tens of thousands of dollars, but never come through. The FBI issued an alert in March 2023 saying it had received over 600 complaints with losses of $39.6 million from people who had been scammed – and that was just from owners of timeshares in Mexico.
Better Business Bureau tips: Companies cannot misuse customer information collected in a confidential context
People have been bilked of millions of dollars
In October, two men were sentenced to federal prison for bilking over 8,000 mostly elderly timeshare owners out of $18 million. Their company, Pro Timeshare Resales, called property owners and falsely claimed they already had a buyer or renter or would have one within a specified time period.
They charged the property owners thousands of dollars in fees up front and often came back for more to cover additional closing costs or other fees.
During the five years Pro Timeshare Resales was in business, it never sold a single timeshare interest. And the government was only able to recover $2.7 million of the $18 million stolen as restitution for victims of the scam.
The BBB in St. Louis has issued numerous alerts over the years about timeshare exit companies operating in Branson and other places, including an alert in 2021 about Consumer Law Protection and related companies that took in more than $90 million.
Our BBB issued an alert in 2017 about Madison South Timeshares, purportedly located in Jackson Tennessee, after receiving complaints from consumers all over the country. The company’s address was a vacant space in a strip mall.
How to detect potential timeshare fraud
The biggest red flag of a timeshare exit scam is having to pay an upfront free. Other red flags include:
Unsolicited offers, sometimes purporting to come from legitimate timeshare companies.
High-pressure sales pitches, often made at seminars in nice restaurants.
Stoking fears about big increases in maintenance fees and that heirs will be saddled with them.
Pressure to sign a contract that doesn’t include a three-day right to cancel mandated by the FTC’s Cooling-Off Rule.
Check out any company offering to help you unload a timeshare with the BBB and online using terms like “scam” and “complaints.”
Contact the resort that originally sold you the timeshare to see if it has options for getting out of your obligation. Be wary of anyone claiming that they already have a buyer or renter for your timeshare, especially if they ask for an upfront fee. Pay any fees by credit card whenever possible in case you need to dispute the payment.
The FBI warns people victimized in a timeshare exit scam to be wary of being victimized again. “Timeshare fraud recovery companies” promise to help people get back money lost in a resale scam, sometimes claiming to be with the government. Different story, same ending – fee paid up front, no results, money lost.
Randy Hutchinson is president & CEO Better Business Bureau of the Mid-South.
This article originally appeared on Nashville Tennessean: Better Business Bureau: Avoid falling prey to timeshare scams
