Time-Share Resale Scam

AARP

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En español

Published December 03, 2018

/ Updated June 21, 2021

VIDEO: How to Avoid Time-Share Resale Scams

Buying a time-share has long been viewed as a risky proposition, fraught with high-pressure sales tactics and ripe for potential rip-offs. It also pays to be wary when someone offers to help you sell your part-time vacation property.

The typical time-share resale scam works something like this: You get a call from a supposed broker who’s seen your “for sale” ad online and claims to have a buyer lined up and ready to make a deal. The caller might even provide a name and phone number for the buyer, who confirms his or her interest.

The scammer sends over signed purchase documents that look legitimate, then asks you to provide a credit card number or make a wire transfer to cover any number of sale expenses: taxes, maintenance fees, closing costs, escrow and title services, or an upfront fee for the resale company. You may be promised a refund of some or all costs when the deal closes.

But the deal never closes; the scammer has simply pocketed the fees, which could run into the thousands of dollars. By the time you realize you’ve been swindled, it may be too late to dispute the credit card transaction. And you’re still stuck with the time-share.

These schemes can be lucrative. According to the Department of Justice, a Mexico-based telemarketing ring busted by the FBI in October 2019 collected more than $10 million in fees by targeting people across the U.S., Canada and South America with phony promises to facilitate time-share sales. Two participants in the scam have pleaded guilty to date and are serving 18-month prison terms.

If you own a time-share, take these precautions to avoid being preyed upon.

Warning Signs

Any unsolicited approach by a reseller, particularly one who promises a handsome return on the sale.
A resale company that claims your area is hot and they’re overwhelmed with potential buyers seeking time-shares.
A reseller promises to modify or cancel your contractual obligation with the resort with which you have a time-share. The American Resort Development Association, an industry group, advises owners to be skeptical of such claims.

How to protect yourself from this scam

Do ask your resort if it has a resale program, rather than relying on a cold-calling stranger to make a deal. Consumer Reports recommends checking to see if the resort imposes any restrictions, fees or other limitations on time-share sales.
Do check with the Better Business Bureau and your state’s consumer protection office to see whether a resale company has a history of complaints.
Do read the fine print. Go over a sales contract carefully to make sure it matches all the reseller’s promises. If you can, run it by an attorney. If the terms aren’t what you were led to expect, don’t sign.
Do be realistic about what you expect to make from a resale, and be skeptical of a seller who guarantees a big return.

Don’t agree to anything on the phone. Do a background check on the resale company before moving forward.
Don’t assume you’ll recoup your original investment, especially if you’ve owned the time-share for only a few years or it’s not in a well-known resort.
Don’t pay fees upfront. The Federal Trade Commission (FTC) recommends doing business with a reseller that collects fees only after the sale goes through.
Don’t overlook alternatives to selling, even if you’re tired of your time-share. For example, the Better Business Bureau suggests looking into exchange programs that allow you to trade with owners of time-shares in other locations.

More Resources

If you think you’ve been the victim of a time-share resale scam, report it to the FTC online or by calling 877-382-4357.
The Resort Owners’ Coalition, a program of industry group the American Resort Development Association, has an online resource center for time-share resales with step-by-step advice for consumers. You can also call the coalition's consumer support line at 855-939-1515.