WASHINGTON – A national alert from the FBI warns consumers, particularly older Americans, that a scam often perpetrated by Mexican cartels has defrauded victims of millions of dollars.
The schemes involve timeshares, with scammers promising unsuspecting victims relief by promising to help them sell their timeshare interests.
Victims who take the bait often pay an initial fee but then find the so-called company becoming evasive – with calls going unanswered, numbers disconnected and websites inaccessible. Another tactic companies use is to create additional fees that victims must pay before the real estate transaction becomes final.
“Timeshare fraudsters aim to suck their victims dry, with devastating consequences to victims’ financial futures, relationships, and physical and emotional health,” Paul Roberts, an assistant special agent in charge who leads FBI New York’s Complex Financial Crimes Branch, said in an FBI blog post.
Perpetrators billing themselves as timeshare resale agents often use high-pressure sales tactics with their victims to add a sense of urgency to the deal, the FBI said.
Because the primary choice of targets is older Americans, the scams technically are a form of elder fraud, or crime that aims to make older Americans part with their money or cryptocurrency, Roberts said. The FBI aggressively investigates such crimes to safeguard what it views as a particularly vulnerable population.
Timeshare scams have been around for years, the FBI said. They have become a popular money-raising tool among Mexican cartels because they are cheap to run and poses fewer logistical, labor, and oversight challenges than other revenue generators like drug and weapons trafficking.
“Timeshare fraud has low overhead costs and minimal reinvestment, needing only a rental of small space, telecom setup, and English-speaking employees with access to resort databases,” Roberts said. “There is lower perceived risk of prosecution and extradition for timeshare fraud but easy cash flow that goes directly into the Mexican banking system and obfuscates funds to facilitate money laundering activities.”
Once a timeshare owner gives money to scammers, it’s extremely difficult to get that money back; criminals will often immediately transfer their ill-begotten assets overseas, the FBI said.
The agency is using a combination of strategic partnerships to detect, investigate, and prevent these schemes. It offers these tips to avoid timeshare frauds:
- Be cautious of uninvited telephone calls, texts, or emails from anyone interested in your timeshare.
- Be wary of any offers that require an immediate response. Scammers will use tactics such as high-pressure and time-sensitive offers.
- Research all entities you are in contact with; contact offices independently to confirm if you are speaking to a representative of their company and enlist the help of a real estate agent or lawyer you trust.
“Though timeshare scams have been perpetrated for many years, the consequences on the victims remain real and serious. Many of the scammers who commit timeshare fraud are well-practiced in their abilities to defraud unsuspecting customers,” James Smith, assistant director in charge of the FBI’s New York Field Office, said in the warning notice.
“When opportunities appear ‘too good to be true,’ it’s often because they are,” Smith said. “Be sure to use caution when dealing with anyone who expresses interest in your timeshare. If you think you have been targeted by a timeshare scam, please report the incident.”
Report timeshare fraud scams via the FBI’s Internet Crime Complaint Center or 1-800-CALL-FBI.