2-part series: If you pay, they will continue to prey. Part 2
posted by Mike Burke on Wednesday, September 16, 2020 in SHAZAM Blog
Part 2: Timeshare resale scams
By one estimate, over 8 million Americans own a timeshare and all risk falling prey to timeshare resale fraud. Due to COVID-19 and economic jitters, many timeshare owners attempting to sell their condo are finding it more difficult to sell than it was to purchase. Scammers — masquerading as legitimate companies — seek to take advantage of this. Just another lucrative scheme to pilfer money from your accountholders and they're doing it to the tune of hundreds of thousands of dollars.
How it works
The timeshare owner, now a targeted victim, gets a phone call from an alleged title company, realtor, or reseller of timeshares who advises they have someone interested in purchasing the timeshare for a good price. To the victim, this sounds great and couldn’t come at a better time, right?
Scam artists go to great lengths to appear credible. They use the names, addresses, and phone numbers of reputable businesses, create elaborate websites and official-looking documents, and employ fake escrow agents and title companies. Some scammers may have information about your accountholder and timeshare before contacting them.
The scam
After persuading the owner that the resale arrangement is a good one, the scammer asks them to send money up front — usually by wire transfer — to pay closing costs, taxes, or other fees. Typically in the range of $1,500 to $75,000, the seller/victim is told the upfront costs will be reimbursed at closing. To sweeten the deal, the fraudster may say this is a guaranteed sale because the buyer has been approved for financing or has the money in the bank.
If the seller continues to pay, the scammer typically requests additional money for unforeseen expenses, for example, luxury tax fees, the country or state internal revenue fees, etc., until the scam is realized.
The bottom line: There was no sale, and your accountholder was swindled out of hundreds or thousands of dollars while the scammer pocketed the money.
How to keep your accountholders safe
- Make your staff aware of this scam and how to identify possible criminal activity prior to any money wire transfers taking place.
- If a staff member is suspicious of a pending transaction, have them work with your accountholder to identify and call the “trusted” agency or realtor to verify the legitimacy of the individual contacting your accountholder.
- DO NOT rely on a Google® search of an alleged trusted website or the phone number the fraudulent caller provided.
- Encourage your accountholder to report the resale scam to the Federal Bureau of Investigation and the Federal Trade Commission.
- Quick reference PDF: Timeshare Resale Scams Infographic.
Tags
- elder
- fraud
- risk
About the Author
Mike Burke is a veteran law enforcement professional with experience in criminal justice instruction, homeland security and fraud investigation. He guides SHAZAM clients to enhance their security measures and ensure regulatory compliance.
SHAZAM, Inc. and ITS, Inc. provide this blog for general informational purposes only. Our blog may be shared by a direct link wherein the content remains as originally presented and has not been altered. SHAZAM, Inc. and ITS, Inc. assume no responsibility for errors or omissions in the contents on the blog. By using this blog, reader agrees that the information published does not constitute nor is a substitute for legal advice which should only be sought from a qualified, licensed attorney.
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