How to protect yourself from the timeshare resale scam

The white sandy beaches and delicious foods of Mexico turned your Mexican timeshare investment into some of your fondest vacation memories. Whether you were ready to cash in on your timeshare or hope to keep the property in your family for a while longer, scammers are actively pursuing timeshare owners. 

Whether you have listed your gorgeous timeshare property for sale or not, fraudsters will pose as a legitimate real estate company, usually based in the United States, and send you a tempting offer. These scammers are sophisticated and will cover themselves up by pretending to be a well-established real estate agent and broker team or creating a fabricated business full of false testimonials.

For example, if the scammer says they are Jane Doe with Shoretime Realty based in Phoenix, Arizona, there is a good chance their story will initially check out since Jane Doe will be a real agent that the scammer is impersonating. You might be able to search the agent's name, the business' license number and find the business on Google Maps and through Better Business Bureau (BBB). The actual real estate company might not know any of this is going on. Scammers prefer to hide behind legitimate businesses and financial institutions to fool unexpected timeshare owners.

Once you agree to sell your timeshare, you will be asked to wire money for many different fees and taxes. You will then receive fraudulent documents that appear to be from the bank to confirm the sale has gone through. The problem is that you will not see any of the money from the sale of the timeshare. The scammers will then keep the charade going and say the funds are being held under investigation or have been flagged by border control.

At this point, the scammer might request to have more money wired to either establish a bank account in the country where the timeshare is located, or to pay legal fees. They might also send threatening letters or calls saying that you are now involved in a court matter with the local authorities as a way to buy more time or request more money. In the end, you can find yourself swindled out of $20,000 or more, and the timeshare will still be your property.

The overused adage of, “If it looks too good to be true, it is," is the wisdom you should keep in mind when it comes to selling your timeshare. The following signs should make you stop and reconsider pursuing the sale:

• A buyer wants to buy your timeshare even though you didn't list it for sale.
• If you do list your timeshare for sale online, you might be contacted by a company representing a buyer who wants to do the business outside of the timeshare resale listing site.
• A buyer is willing to pay more than the timeshare is worth.
• They ask for personal and sensitive financial information over the phone.
• You must pay fees upfront to get your timeshare sold.
• The phone numbers and emails they give you are different from those listed on a legitimate company or financial institution's website

The Embassy of Mexico in Canada says, “We advise the owners of timeshares that if they are interested in selling, do so through a notary public or a real estate agency in Mexico. A notary public or a realtor will help the seller pay for the applicable taxes and carry out the necessary paperwork. It is not recommended to transfer money under any circumstance before receiving payment for the sale." For more information, please visit Mexico.gc.ca.

There is a legitimate way to sell your timeshare without being scammed. Do your research on companies to ensure they are accredited and rated well  by using reputable websites like the BBB. You or your Real Estate agent should be the one making initial contact with a timeshare resale company, not the other way around.

Remember that selling a timeshare is similar to selling other pieces of real estate. You should expect all paperwork to be done through a certified notary and to pay a commission of the sale after the sale is completed, not before. Unlike selling a home, however, timeshares do not always appreciate, and therefore, you might have to sell your vacation spot for less than you paid for it. Don't let the hope for more money lead you to try to sell your timeshare on your own if you are not a real estate expert.

If you believe you are in the middle of a scam, get help immediately. Contact a financial expert at your bank to inquire how to protect your bank account if you have given out sensitive financial information. Stop all payments and communications with the fraudulent company immediately.

You will also need to report the fraud through the Canadian Anti-Fraud Centre and file a police report for your case to be investigated. If you do not file a case, your situation will not be investigated.

Fraud can happen to anyone, which is why it is important to always be aware of warning signs. Scotiabank is dedicated to helping you avoid becoming a victim of fraud.