The Federal Bureau of Investigation (FBI) recently issued a warning about scams involving timeshares that have senior Americans as the primary victim. The FBI noted that timeshare fraud poses a significant risk to older Americans and that the proceeds from such scams are being funneled directly into Mexican cartels, prompting heightened vigilance from the FBI. A timeshare scam typically involves three phases in which a fraudster: (1) initially impersonates brokers and/or sales representatives who pressure victims to take actions such as exiting timeshares or investing additional monies while also demanding upfront payments under false pretenses; (2) poses as a law firm representative in a follow-up discussion with the victim and promises to recover lost funds through legal means but also requiring victims to pay further fees upfront; and (3) impersonates a government official and uses fear tactics to extort additional money from victims by fabricating threats of legal consequences related to alleged money laundering or terrorism involvement.

To protect oneself against these schemes, individuals are advised to take proactive measures including refusing to answer phone calls from unfamiliar numbers, ceasing communication with anyone requesting upfront payments regarding timeshares, and refraining from sending legal documents via email. These precautions are crucial in safeguarding seniors and other investors against financial exploitation associated with timeshare properties.  Financial services firms are encouraged to initiate discussions about such scams with their clients. 

**Bressler’s Senior and Vulnerable Investor Group provides end-to-end advisory solutions and litigation support for investment advisers, broker-dealers, and other financial institutions confronting senior/vulnerable investor issues.

This article is co-authored by Birmingham Summer Law Clerk, Anna V. Smith.


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