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“As a result of the current economic climate, there are timeshare owners who are desirous
of selling their timeshares as soon as possible,” the report noted. “Some owners may have
concluded that their timeshares no longer suit their needs. Others may be facing foreclosure.
Others may be convinced that there are buyers interested in their timeshares. And others may
simply want to avoid paying maintenance and special assessment fees.”
DRE noted that there are “endless variations of timeshare resale fraud,” but the most common
fall into three categories.
The first is what DRE called “fraudsters,” or unlicensed, unregulated, and illegitimate timeshare
resellers posing as legitimate – and licensed -- real estate brokers, “thereby providing a false
sense of security.” The first clear warning sign is that these firms request a fee up-front before
any work can be done on the proposed sale. Often times, the seller is asked to make a wire
transfer to accounts in a foreign country – another red flag, DRE warns. In most cases, “No
services of any kind are actually provided,” the report notes.
The second kind of scam is done by those who target timeshare owners by telling them an
agent has a "ready and willing" buyer waiting in the wings. Be wary if they say this -- and your
property hasn’t even been listed for sale yet, DRE notes.
“In certain cases investigated by the DRE, the scammers were operating from and based outside
of California, but they were using a mailing address in California,” the report notes. “Oftentimes,
the address was simply a mail drop.” Also be cautious when these firms promise to sell your
timeshares within a set period of time, which isn’t realistic, DRE points out.
The last scam involves fraudsters who pose as timeshare buyers, and send out appealing-
sounding ads that read “Will Buy Your Timeshare for Cash,” and “Timeshares Wanted,” then
ask the owners for money up front to process the paperwork for the transfer.

The first two scams, DRE says, are essentially misleading sales pitches made
from “telemarketing boiler rooms using scripts and smooth-talking fraudsters.” It usually leads
to little more than a request for fees in the amount of $1,000 to $3,000 for everything from
advertising to closing costs. These scams are often made by firms that set up fake web sites
designed to make them look legitimate. Their only real concern, DRE warns, is getting that up-
front fee and then disappearing.
DRE notes that in California, only licensed real estate brokers, or salespersons employed and
supervised by the brokers, can list and sell timeshares. Unlicensed brokers, the agency warns,
are “perpetrators of fraud.”
Advance fees for resale services can be legally collected by a real estate broker only when
there’s a written Advance Fee Agreement that has been submitted to and reviewed by the
California Real Estate Commissioner/DRE. The advance fees also need to be accounted for
as "Trust Funds" belonging to timeshare owners.
“A violation of the rules on advance fees constitutes grounds for disciplinary action against a real
estate licensee, as well as grounds for criminal proceedings,” the DRE report notes.
The agency recommends that sellers do their homework before choosing a broker.
“As a timeshare owner, you really need to always be wary and cautious when thinking about
retaining the services of people and companies offering assistance in the areas of timeshare
resales,” the report notes. “Importantly, you should request a copy of the reseller agent’s written
contract that you will be required to sign and a written disclosure of all fees and costs, and you
are wise to never pay for services or assistance in advance of the performance of services. It is
extremely risky to do so.”
To learn more, check out companies on the DRE website, at, and make certain
they’re licensed by the State of California. If they are, see if they’ve ever been disciplined.

Next: Port St. Lucie Man Sentenced in Timeshare Fraud case

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