The FBI has warned timeshare owners across the United States to be on the lookout for scammers targeting their properties in Mexico.
The bureau’s Internet Crime Complaint Center received over 600 complaints last year, approximating losses of $39.6 million from victims contacted by scammers regarding timeshares owned in Mexico.
A timeshare is a property ownership model in which multiple people co-own a vacation property, typically a condominium or apartment, for a specific period, for example, one week every year.
It can be difficult to resell a stake in a timeshare property, however, the Federal Trade Commission (FTC) notes that the actual value of a timeshare lies in its usefulness as a vacation destination, not as a means of creating profit.
The Scam
According to the FBI, the scam involves criminals posing as sales representatives for a resale company and using high-pressure sales tactics to convince timeshare owners to sell or rent their properties. The con has been perpetrated for many years.Criminals call or email timeshare owners asking them to pay an upfront fee for listing and advertising services. However, the PSA states that once the payment is made, the scammers become evasive or create additional fees.
The FBI’s alert states that at this point, “calls go unanswered, numbers are disconnected, and websites are inaccessible.”
In some cases, victims are also contacted by fraudulent timeshare recovery companies offering to help them recuperate their losses for a fee.
“The representative from the recovery company promises assistance in recuperating money lost in the sales scam. Some recovery companies require an up-front fee for services rendered,” the alert states. “At times, scammers purport to be a government entity requesting payments for fees associated with the sale of the timeshare.”
To avoid falling prey to these scams, the FBI advises timeshare owners to be cautious of uninvited telephone calls, texts, or emails regarding their timeshares, research all entities they are in contact with before agreeing to anything, and enlist the help of a real estate agent or lawyer they trust.
The FBI also cautions against high-pressure sales tactics and reminds people that if an opportunity seems “too good to be true,” it often is.
FTC Offers Tips to Avoid Resell Scammers
The FTC recommends taking certain precautions to avoid becoming a victim of a timeshare resale scam, such as thoroughly researching the reseller.Other ways to be on the lookout for scammers include inquiring about the fees involved and opting for resellers who only charge fees after the timeshare has been sold.
If an upfront fee is necessary, the FTC advises requesting written refund policies. Further, make sure that the reseller’s agents are licensed to sell real estate in the state where the timeshare is located and only deal with licensed real estate agents and brokers.
The FTC also suggested seeking references from satisfied customers, asking for the reseller’s advertising and promotion strategy, and requesting progress reports.
Make sure the company will actively work towards selling the timeshare instead of simply putting it on a resale list, according to the FTC.
“Read the contract carefully to make sure it matches the verbal promises you’ve gotten,” the FTC’s advice states. “It should include the services the reseller will perform, plus any fees you’ll have to pay and when. If the deal isn’t what you expected or wanted, don’t sign the contract.”
Timeshare owners are also advised to lower their expectations regarding the resale, particularly if it has been owned for less than five years or is located in a less popular area. A licensed timeshare appraisal service can help gauge the value of the timeshare, according to the FTC.
