California Warns About Increase in Timeshare Fraud

An upsurge in fraud connected to the resale of timeshares in Mexico has prompted the California Department of Real Estate (DRE) this month issue an alert.

Dawn in the remote wilds of Costa Rica
joiseyshowaa / Foter.com / CC BY-S

 

DRE described the scam: Scammers contact and solicit the owners of the timeshares by telephone or email and tell the owners that they either have buyers or renters for the properties or that they will market the properties for sale.

DRE noted that, according to the reports it had received, the parties never meet in person. In the majority of the cases that DRE has investigated or reviewed, the timeshare owners are enticed to wire funds to a company or to an individual in Mexico. The amounts wired have ranged from $3,250 to $85,000.

DRE noted that it’s a red flag of fraud when there are requests to pay only in cash or by wire transfer or by money order or by a certified bank or casher’s check because those forms of payment provide very little recourse in the event the money has gone to a scammer. In fact, DRE noted that a “huge sign of fraud” is a request for the wiring of money in connection with timeshare resales, rentals or other services.

DRE said the fraudsters appear to be legitimate through the use of Web sites and have “fancy sounding titles and addresses” and represent themselves as actual California state licensees. In the few instances where the timeshare owner has called the alleged broker’s telephone number, the voice of the supposed broker is actually the voice of the scammer.

DRE emphasized that it is important that timeshare owners get the name of the person calling, emailing or making the solicitation and look them up on the DRE Web site, locate a phone number for the licensee through a legitimate phone directory, call the licensee at that number and verify that the person who contacted the owner actually works at the number called and then speak with the identified licensee to confirm that he or she actually contacted the timeshare owner.

DRE also said that another step that can be taken to minimize fraud is that timeshare owners who receive uninvited solicitations that seem “too good to be true” should be to personally contact their timeshare resort or timeshare developer as the developer or resort may be aware of new and ongoing scams. In addition, there might be restrictions on sales, transfers or rentals of the units of which the timeshare owner might not be aware.

If you have been scammed or if you become the aware of a timeshare scam, DRE suggests that you report the fraud and file a complaint.

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