The COVID-19 pandemic has had an enormous impact on many aspects of people’s lives, particularly international travel. The varying entry and exit requirements imposed by countries and the uncertainty they have caused have prompted many people who own timeshares in Mexico to reconsider their ownership. As these owners explore their options, they are contacted by an individual who claims to be working for a seemingly legitimate U.S. company who says they have an offer to buy the timeshare, sometimes for a considerable profit. This person may claim they are employed by a real estate brokerage or works in association with U.S. attorneys and even offers to let you speak with them. The owner goes online, does some basic research, and even talks with the attorney. Everything seems in order, so the owner signs the sales agreement thinking they are getting a great deal. The next thing the owner knows, the company tells them they need to wire money to an account in Mexico to pay taxes or some other fee related to the sale. Then a few weeks later, the owner gets another call from the company telling them they need to wire more money. This process continues until the owner has wired tens of thousands of dollars. Suddenly, everyone related to the sale disappears, the representatives, the buyer, the attorneys, the company, and the owner’s money.
The Scammers Are Sophisticated
Unfortunately, this series of events is an all-to-common story we hear from callers who own timeshares in Mexico and are now out thousands of dollars. These frauds have become so frequent that the FBI and SEC issued a joint warning that owners of timeshares in Mexico are being targeted. You can read this warning here: https://www.sec.gov/oiea/investor-alerts-and-bulletins/fbi-and-oiea-warn-public-fraudsters-are-targeting-owners
This is not to say that all offers to buy timeshares in Mexico are illegitimate; there are legitimate offers. The difficulty is determining whether the proposal is real or a fraud. This determination is made more difficult by the sophisticated and organized nature of these schemes. These scam artists, who generally operate out of Mexico, work in groups so you may speak with multiple individuals making it seem like there is a large operation in place.
These individuals also employ various techniques to conceal their illegal activities. The first tactic is a technology called “phone spoofing”. “Phone Spoofing” alters the number which appears on caller ID when someone calls. This allows the user to make it appear as if they are calling from a specific geographic location like the U.S. when they are physically in Mexico. So, there is no guarantee that the person who is calling is in the U.S., even though the caller ID shows a U.S. phone number.
The second method these criminals use to cover up their scam is using a business name that is the same or similar to a legitimate company. For instance, the individual claiming to have an offer for the timeshare will claim to be from “ABC Company” in Las Vegas, Nevada, and have been in business for 10 years. The timeshare owner goes online and finds that there is indeed an “ABC Company, Inc.” that has been operating in Las Vegas for 10 years, so everything appears authentic. However, “ABC Company” and “ABC Company, Inc.” are not the same business, one is legitimate, and one is a fraud.
The fake companies created by these fraudsters will often have very generic names. These names will include words like “title”, “escrow”, “travel”, “capital”, “holding” and “realty” to make it appear like the company is a title company, investment firm, or real estate brokerage.
Third, the people behind the scam will invariably set up a website for their fraudulent company, giving them an online presence. The website will verify everything that has been said over the phone, the contact information will match any previous communications, and most likely have photos of exotic destinations with flashy sales language.
Fourth, the individuals behind the scam will sometimes refer the owner to an attorney whom they claim is vetting the sale. What the timeshare owner does not know is that the “attorney” they spoke with is actually a co-conspirator who has stolen the identity of an actual attorney. The attorney whose identity has been stolen is typically an attorney who maintains an active license but is either not actively practicing law or out of the workforce entirely.
Finally, the perpetrators will utilize the cultural differences between Mexico and the U.S. to their advantage. Aside from difficulties created by the language barrier, the laws, regulations, and governmental entities in Mexico involved in real estate transactions are unlike those in the U.S. These differences place individuals looking to sell their timeshare in a situation that is completely unfamiliar, making it much easier to defraud them. Many times, the people behind the fraud will claim that fees or taxes need to be paid to a government agency that unbeknownst to the seller have nothing to do with the sale of the timeshare.
What can you do if you have been scammed?
Regretfully, after the fact, there is little that can be done to recover the money because wire transfers cannot be reversed or challenged later. The money is also often in Mexico, which presents a whole different set of challenges. If this has happened to you, the best course of action is to file a complaint with the FBI.
The other thing to be wary of is being contacted by individuals claiming to be from consumer protection agencies in Mexico as this is often just another layer of the scam. These persons will contact victims of the scam claiming to want to help. They will have intimate details about the people behind the scam and even have email addresses that closely resemble a real government email address. Once a level of trust has been established they will ask the victim to pay to set up a tax ID or provide another reason they need money to help recover what was already taken. However, these people are working in concert with the original scammers to try and defraud the victim out of more money.
The primary consumer protection agency assigned to protecting consumers in Mexico is PROFECO. If the contact claims to be from any other agency there is a high likelihood that it is a scam, and consumers should be very wary.
What you should do if you get an offer to sell all your timeshares in Mexico:
However, suppose you have received an offer to sell your timeshare in Mexico but have yet to move forward. In that case, investigate all parties involved including the broker, the buyer, and any agencies involved. The AARP provides a good list of do’s and don’ts here:
https://www.aarp.org/money/scams-fraud/info-2019/timeshare-resale.html
If you are uncomfortable doing the research or are unsure of the validity of the offer, you can hire an experienced timeshare attorney. Attorneys who have experience dealing with timeshare matters will be able to use their knowledge to review the proposed sale and determine if it is legitimate or not. The cost of hiring an attorney to investigate the sale typically pales in comparison to the potential loss.
