Tips to avoid being a victim of a timeshare scam:

1. Always check out the timeshare reseller first. Contact the State regulatory agency (Division of Real Estate), State Attorney General’s Office, and Better Business Bureau, in the State where the reseller is located.
2. Verify that the real estate broker and title company are licensed.
3. Contact the home timeshare resort where you own your timeshare to see if they have any information on the reseller. Oftentimes, the developer has a legitimate buy-back or resale program.
4. Be wary if the timeshare reseller has a website that is brand new, and does not have much informational substance.
5. Do not send any money up-front to the reseller, even if it is for transfer fees, taxes, title work, appraisal and commission fees, or if they require wire transfers. Remember, with legitimate timeshare sales, those fees come out of the closing costs.
6. Be suspicious of any requests that payment is only accepted in cash, by wire transfer, or by money order or a certified bank or cashier’s check. These payment forms provide little if any recourse for you in the event you have paid a scammer. If you pay by credit card, you may be able to challenge the charge (if fraudulent) through your credit card company. Talk with your credit card company about their policies in this regard.
7. Be suspicious of the reseller if they just contact you “out of the blue”.
8. Be wary if the reseller cannot meet with you in person.
9. Watch out for statements that you must act quickly to get the sale done.
10. Do not provide personal information, bank account information, or credit card information over the phone to a reseller.
11. Remember, these scammers are also out to steal your identity information.
12. Oftentimes the reseller tells you not to talk with your attorney, accountant or anyone else.
13. Be skeptical if the reseller claims that they already have a buyer or an interested Realtor.
14. Never deal with anyone that does not have an actual office, as many set up fake addresses.
15. Be suspicious if they ask you to send information and money to a PO Box.
16. The scammer resellers also never have anyone to talk to you when you call; they will always get back to you, or have you leave a voice message.
17. Scammers usually offer you more money than the timeshare is actually worth.
18. Be especially skeptical if the reseller gives you guarantees or promises that the timeshare reseller can get your timeshare sold (and often within a certain period of time), or “money-back” guarantees with respect to those monies you are asked to pay up-front.
19. Always “google” the reseller, as you may find a lot of information about them online; people that have been scammed by them tend to post their experience.
20. Always remember – if something sounds too good to be true, it probably is.

The problems begin when the homeowner is elderly, alone, and doesn’t know the true market value of their property:

• They may have purchased their property over 20 years ago for $50,000, $100,000, or maybe $200,000.
• That same property now could have a market value of $300,000, $400,000 or even $500,000.
• The idea that they purchased the property 20 years ago for $120,000 and are now being offered $220,000 sounds appealing to these homeowners – their mortgage might be paid off and they will make $100,000 – sounds good right?
• They don’t realize that an investor or real estate broker who knows the true market value of the property may be taking advantage of them by actively misleading the homeowner as to the true market value.

The problems arise when the investor or real estate broker:

• Drives down the property value in the seller’s mind by showing them comparable properties that aren’t really comparable.
• Talks to the homeowner about all of the deferred maintenance that the property needs (which may or may not be true).
• Allows the homeowner to leave items behind (What is that “convenience” worth - the costs of renting a dumpster, hiring two-three workers for a day to unload your house? Is it worth a homeowner giving up $20,000 - $50,000 - $100,000 – or more of their equity?)
• Fails to tell the homeowner that they are actively marketing the property for market value and that the investor or real estate broker plans to assign their rights in their contract with the homeowner to another investor/buyer.
• Fails to tell the homeowner that they intend to make a profit by accomplishing an assignment of the contract.
• Fails to tell the homeowner when the contract is assigned to a different investor/buyer.

Investigated Case Example

The victim had the misfortune of being on her front porch when an “investor” and his real estate partner approached her and told her they used to live in the neighborhood and wanted to move back.

They figured out her weaknesses and used them against her.

• After “working” on her for a few days, the investor and real estate agent had a meeting with her that lasted hours. At the end of the meeting they had talked her into a purchase price of $200,000 for a property she didn’t even plan on selling.
• At the same time, they had already assigned the contract to a second investor for $300,000 – with the agreement that the second investor would pay a $100,000 assignment fee to the original investor and real estate broker.
• The second investor sold the property to a third investor for $360,000 two weeks after the closing.
• Finally, the third investor held the property for eight months and sold it for $520,000.

That wouldn’t happen to any of us right? Think again. This type of thing can happen to anyone – young, old, rich, poor, no education, or highly educated. The reason it works is because people who perpetrate fraud are good at what they do – separating you from your money.

• Unfortunately, some of our victims became victims because they responded to an unsolicited mailer, phone call, or knock on the door. Once the “investor” makes contact with someone, they start “working” on them. They are experienced at getting close and gaining trust.
• They are charming and know how to obtain information that will help in their dealings with you. In just a few short conversations they will find out your private information and then use it against you.

Distressed Rescue Transactions

Investors and real estate brokers are approaching distressed homeowners (those behind in their payments, facing foreclosure, or experiencing a medical issue). They offer the homeowner an “out” by agreeing to make the mortgage payments for them.

Problems arise when the investor does not explain how this will be accomplished. The unscrupulous investor will:

• Have the homeowner sign a Quit Claim Deed in which the homeowner signs over their ownership in the property.
• Fail to explain to the homeowner that they, the homeowner, are still responsible for the mortgage.
• Fail to warn the homeowner that they could be violating their “due on sale clause” with their lender.

The homeowner is usually elderly or part of an at-risk population (English isn’t their first language, disability of some kind, etc.).

The Division advises the following when it comes to these types of rescue transactions:

• Don’t sign any documents or a deed to anyone until you have had a chance to talk with your lender and an attorney about your mortgage obligations and your legal rights.
• Colorado has a Foreclosure Protection Act that affords you certain rights when you are financially distressed.
• It’s best to take proactive steps when you first start having financial problems, and here are some resources that you can contact:
• Colorado Housing Connects – 1-844-926-6632
• Colorado Foreclosure Hotline – 1-877-601-HOPE (4673)
• Colorado Bar Association “Find-a-Lawyer” – 303-860-1115
• Colorado Legal Services – 303-837-1313
• Disability Law Colorado (Formerly The Legal Center for People with Disabilities and Older People) – 303-722-0720