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Protecting Yourself From Timeshare Exit Fraud

April 01, 2026 — 05:20 am EDT

Written by

FINRA Staff for

The Motley Fool->

A timeshare can provide a way to take an annual vacation at a specific property without the financial commitment of full ownership. However, timeshare exit fraud is a serious problem that can lead to significant financial losses, particularly among older adults who are often the targets.

Understanding Timeshare Exit Fraud

Under a timeshare arrangement, multiple people share ownership of a vacation property, with each owner typically allowed to use the property during a certain period every year. Timeshares involve an upfront buy-in and annual maintenance and other fees, which can be costly.

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As an owner, you can sell your timeshare or rent it out to others. This can be expensive and complicated, though, and the resale market for timeshares is often limited. Scammers frequently take advantage of this difficulty, specifically targeting motivated timeshare sellers and renters. U.S. victims have lost hundreds of millions of dollars to timeshare fraud in recent years, often from funds they've withdrawn from retirement and other investment accounts.

Here's how timeshare exit fraud schemes often work:

- Initial Contact – Someone calls, emails or texts you claiming to represent a buyer, renter or investor interested in buying or renting your timeshare. They might claim to work for an investment or real estate firm and, in some cases, might offer to convert timeshare ownership into shares of stock or other investments.

- Building Trust – To establish credibility, the scammer might impersonate a firm's registered representative or use a professional-looking website. They might use a name similar to a reputable firm or direct you to a fake banking website showing false escrow account balances. Scammers might also reference personal information and timeshare records that have been stolen from you.

- Upfront Fee Demands – The scammer then begins asking for money upfront to cover costs they claim are required--such as "taxes," "escrow fees," "processing costs" or "legal fees." While these requests are fake, they might seem real or reasonable since real estate transactions typically involve various fees. Scammers often encourage targeted investors to liquidate retirement or brokerage accounts to cover these purported costs.

- Silence or Demand for More Fees – After you send funds, you might never hear from the scammer again. Or the scammer might introduce additional taxes or fees they claim are necessary to complete the transaction after the initial transfer.

- Recovery Scam – After making a payment, you might be approached by someone claiming to represent a law firm or government agency and offering to help you recoup your money. The cycle of recovery scams might repeat--even for years--until you stop sending money. Some scammers target older adults, specifically exploiting potential memory decline to obtain additional funds over time.

Red Flags of Timeshare Exit Fraud

Some red flags that might indicate timeshare exit fraud include:

- Unsolicited Contact – Be suspicious if someone calls, emails or texts you with an unsolicited offer to arrange the sale or rental of your timeshare.

- Suspicious Messaging – Although some scammers invest in a professional website, others use sites with noticeable spelling and grammatical errors or a very basic design. Other potential warning signs might include claims of unknown awards and very recently registered websites. And legitimate companies will communicate through multiple verifiable business channels rather than limiting contact to someone's cellphone or personal email.

- Appeals to Emotion – Promoters often create a sense of urgency to trigger a fear of missing out. They might also try to entice you by "guaranteeing" an unrealistically high resale price.

- Private Details – If your contact seems to know private information about your timeshare transaction or personal life that you haven't told them, this could be a sign that they've accessed stolen data.

- Upfront and Escalating Money Requests – Be skeptical of requests for upfront payment of supposedly required costs, as well as asks for more money. Scammers might also ask you to wire funds to them--sometimes specifically through your personal bank account and often to an account based in Mexico, a common destination for timeshare fraud.

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