February 22, 2024

Timeshare sale scams burn Alberta vacationers

Clients exposed to loss by fraudulent companies dangling opportunities to offload vacation contracts

ALIA is warning Alberta lawyers to stay vigilant when their clients are offered easy sales of their vacation timeshares.

In one recent case, client funds were lost in a fake timeshare deal. The owners of a timeshare in the Dominican Republic retained an Alberta lawyer after they received an unsolicited offer to sell their contract. The scam involved not only a fake buyer, but fraudsters posing as the buyer’s lawyer, a Mexican government official, and a representative of the timeshare management company.

This elaborate deception included a phone call with someone alleging to be the buyer’s lawyer, as well as email communications and fake documents.

Once the client committed to sell, they were suddenly asked to send money to cover a timeshare transfer fee and Mexican capital gains taxes before they would receive payment for their timeshare. The person claiming to be the buyer’s lawyer promised these payments would be reimbursed by the buyer.

While the client initially hesitated to pay some of these fees, they eventually proceeded with payment. After the funds were transferred, the transaction was discovered to be a sham.

This is not the only report of a potential timeshare scam involving Alberta lawyers recently received by ALIA. With fraudsters trying to swindle thousands of dollars from their targets, extra scrutiny is encouraged for legal transactions involving timeshares.

Scam breakdown

The fraudster:

Clients may be contacted out of the blue by company representatives offering to buy their vacation property timeshares. Other conspirators may include fake government officials, lawyers and law firms, escrow agents and timeshare company representatives. Some scams respond to ads to sell.

The angle:

The fraudster claims to have a buyer for the timeshare, sometimes providing legal documents. Soon after they agree to the sale, owners receive demands to pay fees and taxes before receiving the purchase price.

The target:

Scammers may tell the seller that the deal cannot proceed until the fees and taxes are paid. Clients may fear losing money already invested in the deal or repercussions of backing out.

Mexican authorities have reported owners being further victimized by scammers offering to help them recover losses from the original fraud.

Spotting Red Flags

These kinds of scammers appeal to their victims by offering a tempting deal and using high-pressure tactics. While convincing documentation may be provided, there could still be signs of fraud:

Timeshares are notoriously difficult to sell.

Anyone claiming to be able to easily sell a timeshare may be dishonest. The Government of Mexico warns that if someone contacts the owner of a timeshare in Mexico by phone or by email offering to buy it, they should be very careful.

Scammers may cold-call the victims with their offers.

It is rare that a legitimate business will call out of the blue like this.

Beware of demands to pay fees upfront.

Asking sellers to make payments on account of fees or taxes before they would receive the purchase price is a sign that something isn’t right.

More information on potential red flags and actions that can help Subscribers protect themselves and their clients can be found on ALIA's website.

ALIA remains grateful to Alberta lawyers and firms for their continued reports of potentially fraudulent activities.

Fraud Prevention Tips

Too good to be true:

Trust your instincts when someone offers your client an amazing deal on a platter. If it seems too good to be true, it may not be true. However, don’t assume a deal must have an unbelievable price or be unsolicited to be a scam.

Use a trusted intermediary:

The Gove rnment of M exico recommends that the owners of timeshares in Mexico only sell through a reputable notary public or real estate agency in Mexico.

Payment demands:

Requests that the sellers make payments before closing may indicate a scam. The Government of Mexico recommends owners do not transfer money under any circumstances before receiving payment for the sale of the timeshare.

Email address verification:

Does the email address look strange? Some scammers pretend to be legitimate company representatives by changing a small part of the email address. Visit the legitimate website and check how their email addresses are written.

Phone call verification:

Scams can be detected by checking phone numbers that are provided in emails. Find the website online and look up the company’s main phone line. Contact them directly to verify if you’re dealing with a real representative.

Internet research:

Take the time to conduct thorough Internet searches to see if there are any previous complaints about the people or companies you or your client are dealing with. Check their websites for signs of fraud such as broken links and nonsensical writing. Look up their office addresses to see if they correspond to a real location on a map.

ALIA does not provide legal advice. ALIAdvisory newsletters, ALIAlert fraud warnings, ALIAction notices and the content on ALIA’s website, notices, blogs, correspondence and any other communications are provided for general information purposes only and do not constitute legal or other professional advice or an opinion of any kind. This information is not a replacement for specific legal advice and does not create a solicitor-client relationship.

ALIA may provide links to third-party websites. Links are provided for convenience only; ALIA does not vet or endorse the information contained in linked websites or guarantee its accuracy, timeliness or fitness for a particular purpose.

If you believe you have been targeted by potentially fraudulent activity, please contact ALIAlert.

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