ST. PAUL, Minn. (March 8, 2017) — Timeshares are notoriously difficult to resell, and scammers know this whenever they offer a “helping” hand – promising to find a buyer immediately while demanding an upfront fee but with no real buyer in sight. The Minnesota Department of Commerce is once again cautioning consumers about timeshare resale scams that can defraud owners out of thousands of dollars through false promises and fees.
Throughout the country, regulators have recently received reports of a more sophisticated timeshare scam. Con artists impersonate licensed businesses in good standing to trick consumers into turning over money and then disappear without ever coming though with an interested buyer.
“Consumers are becoming savvier and doing their homework before making financial decisions. Scammers know this and are adapting their tactics by using the names of legitimate businesses to lure timeshare sellers,” said Minnesota Commerce Commissioner Mike Rothman. “I want to remind Minnesotans to never pay an upfront fee to sell a timeshare.”
A timeshare owner may receive a phone call or email from someone who claims to be an eager buyer or an agent who promises they can sell the property at a good price –sometimes more than the property is worth.
The scam happens when the timeshare owner is asked to make an upfront payment, allegedly for closing costs, taxes, or other fees. The owner is instructed to wire funds to an offshore bank account with a promise that the money will be held in escrow until the sale is finalized.
Many times, the scammer will then disappear with the owner’s money. Sometimes, however, they will ask for yet more money for fees that have suddenly “come up.” Either way, the owner rarely sees their money again.
The Commerce Department offers Minnesotans the following tips to avoid timeshare resale scams:
- Don’t pay upfront fees. Legitimate fees should be paid as part of the closing or deducted from the sale price.
- Don’t wire money or send a money order or cashier’s check. It is almost impossible to recover these funds if you have been scammed.
- Be wary of an overeager buyer. Scammers identify timeshare owners through public databases and real estate records. They will cold call or mail materials, offering purchase terms that are often too good to be true. These tactics are a red flag that the offer could be a scam.
- Do some homework. Check the would-be buyer or agent’s name, phone number, and address on the internet. If you have trouble finding information, or if what you find looks suspicious, the offer could be a scam.
- Contact the home timeshare resort where you own your timeshare. See if they have any information on the reseller who contacted you. Often, a resort will have its own buy-back or resale program, or it can provide a list of reputable agents.
- Do not provide personal information, bank account information, or credit card information over the phone to a reseller. Remember, these scammers are also out to steal your personal information for identity theft.
Commerce is here to help
You may also wish to file a complaint with the following federal agencies:
- FBI Internet Crime Complaint Center (www.ic3.gov)
- Federal Trade Commission (www.ftc.gov)
- Consumer Financial Protection Bureau (www.consumerfinance.gov)