Timeshare Exit Scams: 5 Traps Owners Must Avoid

ESET Latinoamérica has warned about scams aimed at owners seeking to get rid of their timeshares, including fake purchase offers, fraudulent services to cancel contracts, and alleged money recovery schemes. Scammers take advantage of the information and needs of property owners to offer supposed resales, rentals, or money recoveries, using those offers to obtain advance payments and commit fraud.

According to a statement from the cybersecurity firm, cybercriminals are exploiting owners’ dissatisfaction with rising maintenance fees and long-term financial obligations by offering deceptive solutions. Although legitimate companies provide assistance in this process, fraudsters are also present in the market and offer a quick and easy way out.

Warning Signs and Suspicious Practices

Among the main warning signs are unsolicited calls received by homeowners after scammers obtain their property registration data. Another is the organization of free seminars with lunches or dinners where pressure tactics and alarmist messages are used to increase fear of possible future debts.

Another suspicious practice is demanding upfront payments that can amount to thousands of dollars before any work is performed, a scheme similar to advance payment scams. The firm also warns against promises of guaranteed results, money-back guarantees, or purported secret legal mechanisms for canceling contracts. It also flags unreliable advice, such as telling owners to stop paying annual fees—a decision that could damage homeowners’ credit histories—or discouraging them from consulting lawyers.

ESET identified five recurring fraud schemes that affect those seeking to cancel their timeshares.

The first method involves demanding upfront payments of thousands of dollars to facilitate an exit from the contract. After receiving the money, scammers delay the process with various justifications, stop responding, and disappear, only to resume their operations later under a different business name.

The second involves transferring ownership to shell companies. Fraudsters claim they will release the owner from their obligations, but instead of returning the property to the resort or selling it legitimately, they transfer it to a front company. As a result, the victim may remain liable for outstanding fees, penalties, and enforcement proceedings.

The third involves fake class action lawsuits. Scammers pose as legal representatives and promise to invalidate contracts through legal action against developers, supposedly to carry out the process, and request high fees and legal expenses, even though the lawsuit does not exist.

In the fourth scenario, criminals contact owners offering buyers interested in purchasing their timeshares, even at prices above market value. However, they make the transaction contingent on the upfront payment of taxes, bank fees, or security deposit costs—charges used as a pretext to obtain money without actually completing the sale.

The fifth scheme involves recovery scams, specifically targeting those who have already lost money in previous frauds. Criminals impersonate government officials or debt recovery specialists and promise to return the money or cancel the contract. To begin the supposed process, they demand an upfront payment and disappear once they receive it.

Recommendations Before Hiring These Services

Key measures include verifying that payments are made through an escrow account and that funds are released only when the work is completed, rather than handing over large sums in advance.

Owners should request and verify the legal credentials of the professionals involved, such as the name of the law firm, the corresponding license, and its authenticity. They should also investigate the company’s background and look for possible complaints or claims from other clients.

Reviewing the contract is another crucial step to identify ambiguous clauses, discrepancies between what was promised and the actual results, conditions related to money-back guarantees, or recommendations to default on payments. People should be wary of companies that contact them unsolicited or that guarantee a quick and secure cancellation in 100% of cases.

If a person has already fallen victim to this type of fraud and made a payment to a fraudulent company, they may still have a chance of recovering their money if they act quickly. ESET recommends contacting the bank or card issuer to dispute the charge due to fraud or for services not provided, as deadlines vary depending on the institution.

If a bank transfer has been made, it is important to request as soon as possible that the transaction be reversed, contact the bank’s anti-fraud department, and cancel any automatic debits related to the company.

It is also advisable to gather all available evidence, such as emails, text messages, contracts, and payment receipts, as well as to file a complaint with the competent authorities in the country. People should remain vigilant against potential new fraud attempts, especially those in which other people or alleged government officials promise to recover the money in exchange for a payment.

Finally, it is advisable to contact the resort or the company responsible for the timeshare directly to check whether communications have been received from the fraudulent company and to verify that maintenance fees are up to date.