Timeshares are a legitimate vacation option for many people with about 9.6 million Americans owning timeshares. However, resales by timeshare owners is often difficult due to a variety of factors including oversupply and limited demand. This situation presents the perfect storm for scammers who prey upon timeshare owners trying to sell their interests with promises of buyers that never materialize after charging the timeshare owners upfront fees of thousands of dollars. Part of the problem is that the timeshare resale firms are largely unregulated although the Federal Trade Commission (FTC) has brought a number of lawsuits against timeshare resale companies for false and misleading marketing.
Elderly timeshare owners are specifically targeted by scammers by phone, mail, email, telemarketing and seminars in which the scammers promise easy sales and big profits. Most of these companies charge upfront fees of between $2,500 and $10,000. Many of them provide a money back guarantee, but the guarantee of a scammer is worthless.
JALISCO NEW GENERATION CARTEL
However, things aren’t as bad as you think, – unfortunately, they are far worse because the Mexican drug cartels Jalisco New Generation and the Sinaloa Cartel have gotten into the timeshare resale scam business. For the last thirteen years, the cartels have targeted American owners of Mexican timeshares through call centers in Mexico manned by English speaking cartel members. In 2024 American and Mexican officials confirmed that as many as 8 Jalisco New Generation cartel workers were killed after they tried to quit their jobs at the call center.
The cartels obtain the names and contact information of timeshare owners from employees of the timeshare resorts in Mexico. The cartel members then initiate their scams through phone calls or emails in which they represent themselves as either timeshare brokers, lawyers or sales representatives in the timeshare business. They offer to sell the targeted victim’s timeshare at a considerable profit or rent the timeshare unit for the victim. The targeted victim is then required to pay advance fees or taxes before they can receive their profits, however, the money paid by the targeted victim is lost forever and the promised resale or renting profits never materialize.
Making matters even worse, after the cartel scammers have scammed their victims out of money for sales that never occur, the scammers contact their victims posing as government agents who have become aware of the scams and offer to help get their money back. Of course, before doing so they require another payment which just adds to the losses of the scam victims. According to the FBI, approximately 6,000 American reported losses of almost $300 million between 2019 and 2023 related to timeshare fraud schemes in Mexico.
FINCEN NOTICE
In 2024 the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), its Office of Foreign Assets Control (OFAC) and the FBI issued a joint Notice on timeshare fraud perpetrated by the Mexican criminal cartels that provided financial institutions with a description of the scams and red flag indicators. Within six months of the distribution of this notice, FINCEN received more than 250 Suspicious Activity Reports detailing 1,300 transactions totaling $23.1 million. Last August OFAC sanctioned four members of the Jalisco New Generation Cartel for their role in ongoing timeshare fraud along with 13 companies accused of working with them.
WHAT TO DO IF YOU ARE SELLING YOUR TIMESHARE
Anyone considering selling their timeshare unit should research the legitimacy of any company proposing to help you sell your timeshare. Check with your state’s attorney general and your local consumer protection agencies. You also can do a search engine search typing in the word “scam” along with the name of the company you are considering. Make sure you have a lawyer review any contract before you sign it and you should never pay in advance for the services of someone purporting to assist you in reselling your timeshare unit. Probably the best way to sell a timeshare unit is to deal with the resort management company or timeshare developer on your own. Finally, no government agency requires a payment to help you after you have been scammed.