Timeshare ownership, while appealing to many, has become a hotbed for fraudulent activity, especially targeting older adults. According to the Better Business Bureau Institute’s Scam Tracker, travel, vacation, and timeshare scams are among the riskiest situations for people aged 65 and older. A significant portion of these scams occurs within the timeshare industry, causing financial devastation to victims. The story of Mary and Mark from Carson, California, serves as a stark reminder of how dangerous these scams can be. Their experience with a Mexican timeshare scam left them broke, living in their son’s basement, and struggling to reenter the workforce after losing over half a million dollars.
The Scam That Changed Everything
Mary and Mark’s nightmare began with a phone call. A year and a half earlier, a caller offered to buy their Mexican timeshare. The seemingly simple deal quickly unraveled. They had to pay Mexican fees and taxes upfront, and after they complied, the anonymous buyer canceled the agreement, leaving them to cover the costs to “unwind” it. Their situation worsened when scammers convinced them to buy more timeshares at low prices, promising huge resale profits. Mary believed she would make millions, and despite repeated warnings from friends and family, they continued sending money into the scam. The couple sold their primary home and a rental property to raise additional funds. After sending a final payment of $150,000 in hopes of recovering their losses, they were left with nothing. Their retirement dreams, once supported by life savings and rental income, disappeared. Now, they face financial ruin, with Mark applying for retail jobs to supplement their inadequate Social Security benefits.
A Widespread Problem for Timeshare Owners
Mary and Mark’s story is, unfortunately, not unique. Thousands of timeshare owners, particularly those who own properties in Mexico, have fallen prey to similar schemes. As Brian Rogers, founder of the Timeshare User Group (TUG), explains, scammers take advantage of the lack of resale value in timeshares and exploit international real estate transactions. By citing non-existent Mexican laws and fees, scammers trick owners into paying large sums of money under the guise of securing a hefty sales price for their timeshare. Scams like these have become so pervasive that, in 2020, the State of Washington sued Dave Ramsey’s Endorsed Timeshare Exit Team after it collected upfront fees from thousands of timeshare owners and failed to deliver on its promises. Victims, like an owner of a Branson timeshare who paid $11,000, have yet to see a resolution or their money returned. Many companies like this have since closed, leaving victims with little hope of recovery.
Red Flags to Watch For
The timeshare industry is rife with fraudulent operators, and as Robert Clements, vice president of regulatory affairs at ARDA-ROC, points out, not all timeshare exit companies are legitimate. Some claim success in their marketing but are embroiled in criminal and civil investigations for taking money from consumers without providing any services. Jason Gamel, President and CEO of the American Resort Development Association (ARDA), offers a simple but crucial piece of advice: “If someone contacts you first, stop right there. 99.9% of the time, it is a scam.” Scammers use cold calls and unsolicited offers to lure victims into their schemes. They often promise to buy, sell, or cancel a timeshare, but their true intent is to collect large upfront fees without delivering any service. Rogers echoes this warning, emphasizing that the moment someone asks for money upfront is the clearest red flag.
How to Protect Yourself from Timeshare Scams
Preventing these scams starts with education and vigilance. Timeshare owners should be aware of the resale value—or lack thereof—associated with their properties. Many owners, especially older adults, are not fully informed about the financial aspects of timeshare ownership, making them vulnerable to scams. Additionally, the promise of high profits from resale or exit strategies can blind people to the warning signs. Before making any decisions about selling or exiting a timeshare, it is critical to research companies thoroughly. Check for legitimate business credentials, reviews, and complaints with the Better Business Bureau (BBB) and state regulatory agencies. Avoid companies that require large upfront payments, and always be skeptical of unsolicited offers.
Conclusion
Timeshare ownership can be a valuable experience for some, but it is also fraught with risks, particularly for older adults. Scammers prey on those who are uninformed or desperate to exit their contracts, promising quick solutions in exchange for large sums of money. As Mary and Mark’s story shows, even seemingly legitimate offers can lead to devastating financial losses. By staying educated, avoiding cold calls, and exercising caution when dealing with timeshare resale or exit offers, owners can protect themselves from falling victim to these increasingly common scams.
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