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FBI issues national financial alert
The Federal Bureau of Investigation has issued an alert about a specific type of financial crime linked to Mexican cartels.
In an announcement, the agency said it has seen an increase in scams targeting timeshare owners. The main victims are older Americans, particularly the wealthy looking to recoup some of the money they spent on their real estate investments. Over the past five years, more than 6,000 victims have reported more than $300 million in losses to agencies, the agency said.
“Timeshare fraudsters aim to suck up their victims, with devastating consequences for the victims’ financial future, relationships, and physical and emotional health,” Assistant Special Agent in Charge Paul Roberts, who leads the FBI’s Complex Financial Crimes Division in New York, said in a blog post.
Roberts said the frauds caught the FBI’s attention because their illicit proceeds are increasingly used to finance violent cartels in Mexico.
“Timeshare fraud has low overhead costs and minimal reinvestment, requiring only a small space rental, telecommunications setup and English-speaking staff with access to resort databases,” Roberts said. “There is lower perceived risk of prosecution and extradition for timeshare fraud, but easy cash flow that goes directly into the Mexican banking system and obfuscates funds to facilitate money laundering activities.”
How do timeshare scams work?
Timeshare fraudsters do their homework before preying on their potential victims, going so far as to create false documents and pose as individuals from trusted institutions such as banks. They then use high-pressure sales tactics and false information, such as imitating email addresses of legitimate entities and falsifying official documents, to convince victims that offers regarding their timeshares are real.
Initial contact is usually made by phone or email with the scammer pretending to be a third-party timeshare broker or sales representative based in the U.S. or Mexico, the FBI said. They then ask the owner to exit the timeshare, rent their property, or invest in stock certificates. Fraudsters then pressure victims to pay fees or taxes up front to secure the deals.
After this stage, the scammers often re-approach the victims posing as lawyers, trying to help them recover the money they lost to the first scammers and asking for legal or court fees. The scammers, however, don’t stop there and often come back to pose as government officials who claim they can help recover some of the lost money – for a fee, of course – or threaten the person by claiming that the initial payment was suspicious and the person is being fined or prosecuted.
No matter the stage, it’s all an effort to separate the victim from their money.
Warning Signs of an FBI Timeshare Scam
- You should not be asked to pay any fees or taxes upfront or to provide any power of attorney forms.
- If someone contacts you claiming to be a government official and talks to you about a settlement or threatens to arrest or sue you if the money is not paid, it is a scam.
- If someone threatens to subpoena you to court outside the US or claims to be working for the FBI or the US Treasury Department’s Office of Foreign Assets Control, it is a scam.
How to protect yourself
- Do not answer calls from unknown numbers.
- If someone contacts you about your timeshare and asks for money upfront, stop communicating with them and do not pay.
- Never sign, notarize or send any power of attorney or legal document by email.