The timeshare resale market is rife with scams, posing a significant threat to unsuspecting owners looking to offload their properties. The Better Business Bureau (BBB) has issued warnings about fraudulent businesses masquerading as legitimate timeshare resale companies, preying on consumers and causing financial loss. This article explores a real-life case of timeshare fraud, highlights the tactics used by scammers, and provides essential tips to help consumers protect themselves.
━ The Rise of Timeshare Resale Scams
As many timeshare owners look to exit their contracts, scammers have increasingly targeted this market, posing as legitimate resale companies. Fraudsters often deceive owners by promising quick sales and enticing offers, only to demand upfront fees for taxes, closing costs, and other supposed services. Unfortunately, these promises are often empty, and the companies disappear once they have extracted as much money as possible from their victims.
One such case involves Jenny Allee of Cloverdale, who sought to sell her timeshare in Branson, Missouri. Allee was approached by what she believed to be a reputable company, only to find out too late that it was an imposter. After wiring funds for supposed advertising, legal fees, and a contingency deposit, Allee was left with no buyer, no refund, and a loss of $4,100. Allee’s experience is a cautionary tale for others facing similar situations.
━ How Timeshare Scammers Operate
Scammers use a variety of deceptive tactics to exploit timeshare owners. In many cases, they pose as well-known companies or create fake entities with credible-sounding names. They often initiate contact through cold calls or online advertisements, luring owners in with claims of interested buyers and high resale prices. Once engaged, they request various fees to facilitate the sale, including closing costs, legal fees, and taxes.
The BBB uncovered a notable scam operation involving two fraudulent companies: D&W International Closings and Sunrise VP Solutions. D&W International Closings claimed to operate out of downtown Indianapolis, but the BBB found it was nothing more than a phantom company with no legitimate presence. Similarly, Sunrise VP Solutions, which claimed to be based in Nashville, Tennessee, did not exist. Both companies worked together to defraud victims by using fake agreements, demanding exorbitant fees, and then cutting off all communication once they received the payments.
The BBB reports that these scams have caused consumer losses exceeding $242,000 across at least seven states in the U.S. and Canada. The scammers frequently provided victims with fraudulent documents and falsely assured them that fees paid would be refunded once the sale was completed. However, after receiving the payments, the scammers vanished, leaving victims without any recourse.
━ Red Flags and Tips to Avoid Timeshare Resale Scams
The BBB and other consumer protection agencies emphasize the importance of vigilance and due diligence when dealing with timeshare resale companies. Here are some key tips to help avoid falling victim to these scams:
➤ Research Potential Buyers and Closing Agents
Always verify the legitimacy of any company by checking their profiles on bbb.org or calling the BBB directly. Additionally, search the BBB Scam Tracker database for any complaints or warnings.
➤ Avoid Upfront Fees
Legitimate resale companies typically do not ask for significant upfront payments. Be wary of requests for closing fees, taxes, or legal costs before the sale is finalized.
➤ Verify Licensing
Check with your state’s real estate commission or licensing board to ensure that the broker or closing agent is properly licensed.
➤ Avoid Unusual Payment Methods
Requests for payment via wire transfer or other non-traditional methods are major red flags. Legitimate companies will usually provide multiple secure payment options.
➤ Check Physical Addresses
Ensure the business provides a verifiable physical address, not just a P.O. box. Scammers often use fake addresses to appear more credible.
➤ Consult the Original Timeshare Seller
Reach out to the resort or organization that sold you the timeshare to see if they can provide guidance or are aware of ongoing scams.
➤ Meet In-Person When Possible
If the buyer refuses to meet in person, this could indicate fraudulent intent.
If you have been scammed, take immediate action by filing a complaint with the Federal Trade Commission (FTC) and your state’s Attorney General. You should also submit reports to the BBB and share your experience through the BBB Scam Tracker to help protect others. If the scam occurred online, report it to the FBI’s Internet Crime Complaint Center (IC3). Taking these steps can aid in recovering lost funds and preventing future scams.
━ Conclusion
The timeshare resale market is a magnet for scammers who exploit the desperation of owners eager to sell. Protect yourself by thoroughly researching any company you plan to work with, avoiding upfront fees, and staying alert to red flags. By taking these steps, you can minimize the risk of falling victim to these prevalent scams. For those who have already been affected, it’s essential to report the incident to help protect others and potentially recover lost funds. Stay vigilant, informed, and cautious when navigating the timeshare resale process.
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