BBB Warns of Timeshare Resale Scams

October 16, 2017

DENVER, COLORADO —Better Business Bureau of Denver/Boulder is warning consumers to exercise extreme caution when doing business with timeshare reselling companies, following an internal review of the local businesses in BBB’s database. BBB has recently experienced an increase in consumer complaints regarding timeshare resellers, particularly among consumers who own timeshares in Mexico.

In 2016, the timeshare industry saw its seventh straight year of growth in the U.S. However, the Federal Trade Commission (FTC) cautions consumers that the value of purchasing a timeshare is in its use as a vacation destination, rather than as an investment—owners are likely to sell these properties for less than what they originally paid, due to the high availability of timeshares worldwide.

Timeshare resale scammers take advantage of the many consumers who are desperate to unload their timeshares for as much as, or close to, their original purchasing price.

How Resale Scams Work

Legitimate timeshare resellers are real estate brokers and agents who specialize in helping timeshare owners sell their properties. While there is nothing inherently illegal about timeshare reselling, it is an industry particularly fraught with scammers. These scammers rarely hold proper licenses.

In a typical timeshare reselling scam, “brokers” solicit a timeshare owner, claiming to have buyers lined-up to purchase the owner’s property. After requesting an up-front fee (often under the guise of “taxes” or other transaction fees and usually paid via wire transfer), the supposed brokers disappear.

Often, these scammers operate under the stolen name of a legitimate but retired U.S. real estate broker whose license is no longer active. Inactive licensees typically keep their contact information private on the Division of Real Estate’s website. Thus, when skeptical consumers research a scammers’ licensing information, they sometimes find a legitimate license listing but have no opportunity to contact the true licensee. (Consumers who come across an inactive licensee on the Division of Real Estate’s website should not do business with that person, and should instead reach out to the Division, which will do what it can to contact the licensee.)

Scammers will usually offer victims a too-good-to-be-true price for their timeshares, pressuring these owners to seize a one-time opportunity to cash out on their investments.

Scammers will also target consumers who own timeshares in isolated vacation destinations like Cancun and other tropical getaways. These properties are often expensive for owners to visit and maintain, and as a result many are eager to take scammers up on their offers.

If Approached by a Reseller

BBB urges timeshare owners to exercise skepticism when resellers approach them with unprompted solicitations. In addition, owners should be wary of resellers who claim an area is “hot,” who claim to already have multiple buyers lined up for a property, or who promise to sell a timeshare within a specific timeframe.

BBB offers consumers the following tips:

  • Avoid companies that ask for an up-front fee. This is not legal in the state of Colorado.
  • Reach out to Better Business Bureau or the Division of Real Estate and ask whether the company that approached you has previously been reported as a scam. The American Resort Development Association (ARDA) also keeps a running list of issues and scams associated with resellers.
  • Verify with your state’s Real Estate Commission that the broker is properly licensed. In Colorado, consumers should consult the state’s Division of Real Estate. Only deal with licensed agents. Do not do business with a broker whose license is inactive.
  • Look for businesses that provide a physical address (a PO box is not sufficient).
  • Reach out to past clients for references.
  • Ask for everything—refund policies, sales agreements, etc.—in writing.
  • Be wary of brokers who consistently find excuses not to meet in person or speak over the phone.


If You’ve Been Scammed

BBB encourages consumers who believe they have been scammed to report their experiences. There are a number of organizations consumers can contact:

BBB advises consumers who want to sell their timeshares to either do so on their own, or to work with the company from which they purchased their property originally.

Looking for more information? The FTC offers consumers a guide to timeshares and vacation plans, and the Division of Real Estate offers a timeshare advisory fact-sheet. Finally, BBB encourages timeshare buyers and sellers to visit and work with a BBB Accredited Business.