Timeshare resale and other phone-based scams remain prevalent: Can you spot the red flags?
Russ Wiles, Arizona Republic
5 min read
The approach of summer brings more opportunities for leisure travel. It also might provide scammers with more chances to separate you from your money.
The Federal Trade Commission highlighted that in a March alert over offers from supposedly legitimate buyers interested in your timeshare unit. The dangers could apply to other unsolicited offers at a time when crooks are becoming more sophisticated and many consumers aren't heeding even basic precautions.
“Maybe you weren’t thinking about selling your timeshare, but suddenly someone calls and tells you they’re a real estate agent and have an interested buyer,” the FTC said in its alert. “They might have information about you and your property, so the offer seems credible."
That’s a common tactic that possibly points to a scam, agreed Carlos Sugich, an attorney at Snell & Wilmer in Phoenix and Los Cabos, Mexico, who helps American companies conduct real estate transactions in Mexico and Mexican companies do the same here.
“People don’t just call you unsolicited with offers to buy your timeshare,” he said.
Timeshare units, which provide ownership rights at specific resorts, can be difficult to sell, so it’s unlikely a legitimate buyer is waiting in the wings. The following tips can help you avoid falling victim:
Be skeptical of unsolicited calls
Not all scammers work over the phone, as illicit internet and texting pitches are common, too. But a shrewd marketer making a request over the phone can be persuasive, especially when the offer is what the timeshare owner wants to hear. Either way, the key is the unsolicited aspect.
“The first red flag is someone contacting an owner when that person isn’t selling,” said Sugich. “Unless you have put the unit up for sale, buyers won’t contact you.”
Scammers use public records to identify and target timeshare owners, the FTC noted. The focus often is on older adults who no longer use their timeshares but still answer unsolicited phone calls.
Be wary of offers that seem too good to be true
Many timeshare interests are sold in resale markets, usually with prices marked down from what owners originally paid. Yet scammers dangle offers above what the owner paid or thinks the unit is worth, Sugich said. And why not? These crooks never intend to pay anything.
Be prepared for snags in the process
Suppose you’re contemplating an offer and aren’t suspicious yet. The marketer so far has told you only that a buyer wants your timeshare and is offering a certain price. Now comes the rub, Sugich said. “They’ll wait maybe a week, then come back to you and claim there’s a problem."
One tactic is to say you must prepay escrow fees or property taxes. If your unit is located in a foreign nation such as Mexico, a scammer might claim that you could face some sort of government penalty that must be resolved before you can enter the country, he added. Such warnings create a fabricated urgency for you to come up with money.
Don’t assume the documents are authentic
A scammer might send you a letter from tax or other officials, bearing a logo or insignia that looks authentic. But the logo could be copied and the communication bogus. Bank statements, tax bills, email chains and other documentation also can be fabricated easily, Sugich said.
“Scammers provide a lot of information, but that information is just wrong,” he said. “And don’t let the foreign jurisdiction part cloud your judgment.”
The bottom line is that any appeal for money, when you’re the seller, should be treated with skepticism.
Be prepared to wire money, then more money
Scammers, often portraying themselves as real estate agents, sometimes start by asking for a small fee that escalates into demands for thousands of dollars, the FTC said.
Eventually, you will be asked to send money, often through a wire transfer. With such payments, “The money is hard to track and hard to get back,” Sugich said, adding that no tax authorities normally require payment by wire transfer.
But that might not be the end of it. Sometimes, scammers keep asking for funds and victims, not yet willing to admit that they have been swindled, agree. “People don’t want to believe it’s a scam, even after they’ve wired $20,000 or $30,000,” Sugich said.
Rather than paying anything, you should demand instead to have any fees or taxes deducted from the buyer’s purchase proceeds during the escrow process, Sugich suggests. If the marketer balks, then walk away. “If you're the seller, you shouldn’t need to advance anything.”
Make an effort to check things out
If you want to sell a timeshare unit, it’s often best to contact your home resort, which might have a list of prospective buyers and legitimate brokers who can arrange a sale. The home resort also might be able to confirm details such as back taxes or management fees that you owe.
If your timeshare is in the U.S., check with the real estate licensing agency in the state where the timeshare is located, the FTC suggests. If a title company is listed on closing documents, call that firm to see if it’s legitimate.
In addition, the FTC suggests conducting an online search for the name of the company or person who contacted you — and including the words “scam” or “complaint” to see what pops up. If you do fall victim, report it to the FTC at www.ReportFraud.ftc.gov.
Reach the writer at russ.wiles@arizonarepublic.com.
