Stephen B. works in the banking industry and lives in Kansas.
About five years ago, Stephen purchased a timeshare in Cancun, Mexico for $50,000.
One day, a real estate broker called Stephen and offered to buy the timeshare from him for $65,000.
Stephen had loved the condo in Cancun, but as his children grew older there was less time for vacations.
The upscale timeshare was a bargain and the concierge at the resort treated Stephen and his family like royalty.
But the offer from the broker was too good to pass up, so Stephen agreed to sell the condo.
However, the real estate broker had one request. He wanted Stephen to pay the Mexican federal tax of nearly $4,000.
This money would be held in escrow and given back to Stephen when the sale was complete.
What Stephen didn’t know was that the offer was part of an elaborate timeshare scam.
According to a federal investigation, thousands of Americans have fallen victim to timeshare scams like Stephen did.
And the people behind the scam are violent drug cartels.
Drug cartels have turned timeshare scams into a business. The cartels started their scams in popular resort towns such as Puerto Vallarta and Cancun.
The timeshare scams are run out of two dozen call centers in Mexico that contact timeshare owners in the U.S.
The call center workers speak perfect English and are trained to lure in victims who want to get rid of their timeshare and stop paying the annual fees.
The employees even create documents with real estate brokers, attorneys, and the identities of buyers so it appears legitimate.
A consumer advocate said, “You have these desperate people. The victims are limitless.”
So many Americans are looking to get rid of their timeshare that they fall victim to scams.
The cartels look at these scams as an easy way to generate income.
A U.S. official estimated that the drug cartels make millions each year off these timeshare scams.
“It’s more cash in hand than they make from drugs. The overhead is low for this.”
To make matters worse, many of the call center companies easily avoid getting caught.
You see, the drug cartels set up shell companies and bank accounts.
Then, once law enforcement is on to them, they abandon the shell company and accounts and start new ones.
And like many people who work for drug cartels, the employees at these call centers can’t quit.
Last year, 8 people who worked at a Mexican call center tried to quit their jobs.
Their remains were found in over 45 plastic bags at the bottom of a canyon.
So, the scams continue unabated, and American timeshare owners lose millions to the cartels and this crime.
The U.S. Treasury has sanctioned over 40 Mexican companies associated with the scams.
But the sanctions haven’t stopped the crimes.
So, if you have a timeshare or have ever considered one, here are a few ways to spot a timeshare scam.
Random contact:
In Stephen’s case, he wasn’t actively trying to sell his timeshare in Cancun, the “real estate broker” called him randomly.
There are always tons of people trying to sell their timeshare.
So, if someone is looking to buy one, they can easily find one, and don’t need to call random owners.
If you don’t have your timeshare listed for sale and someone calls offering to buy it, then it could be a scam.
Upfront payments:
If you are selling a property and the broker asks for fees upfront it could be a scam.
Oftentimes, fees that the seller pays are taken out when the sale is completed.
So, if the real estate broker says there are a bunch of fees and taxes it should be a red flag.
Other brokers and lawyers:
Sometimes the scammers will say they work with other brokers and lawyers to facilitate the timeshare transaction.
They will refer you to a lawyer who can help you through the sale process, and they might even provide a legitimate website.
The catch is that the scammer is using the identity of a real lawyer and broker.
When you call them, you are just calling another piece of the scam they’re perpetrating.
Sadly, even if the company has a legitimate website and everything looks real you don’t know if you are truly talking to that person.
Always use your own attorney and accountants.
The call back:
These cartel scammers are incredibly sophisticated.
If someone catches on to their scam the victim will usually stop communicating and alert authorities.
So, the scammers will wait months or even years in some cases and reach out to the same victim again.
This time they will say they are an attorney that is part of a class action lawsuit against the call centers and the scammers.
They will pretend to be attorneys who are on your side and want justice for you.
If you have lost money in the scam these “attorneys” will claim they can get your money back.
The catch is that the attorney will need you to pay a fee for them to represent you.
And, you guessed it, that money disappears into the cartel’s coffers, not a legal fund for you.
It’s the scam that doesn’t quit.
I don’t own a timeshare, but I have family members that do.
I have spent the past few decades listening to my family members complain about their timeshares and how they can’t wait to get rid of them.
If you’re in the same boat, I can sympathize.
Just watch out for these red flags so you don’t become a victim of a timeshare scam.
