Publication
Timeshare Scams in Los Cabos: How They Operate and How to Stay Safe
By Alonso Sandoval, Alvaro Fox, Carlos Freaner, and Carlos Sugich
Los Cabos, renowned for its luxury resorts and sun-drenched beaches, has become an increasingly dangerous hotspot for sophisticated timeshare scams that disproportionately target American and Canadian property owners and vacationers. These fraudulent schemes are not just opportunistic crimes — they are part of a broader, organized effort linked to transnational criminal organizations (TCOs), including the Jalisco New Generation Cartel (CJNG) and the Sinaloa Cartel, among others.
According to the Federal Bureau of Investigation (FBI), since at least 2012, Mexican TCOs have been orchestrating timeshare fraud operations to diversify their revenue streams and fund other illicit activities. These scams typically involve false promises of reselling or renting timeshares, luxury membership perks, or bogus investment opportunities.
From 2019 to 2023, nearly 6,000 U.S. citizens reported losses totaling close to $300 million from Mexican timeshare fraud schemes. However, the FBI warns that actual losses are likely much higher, as up to 80 percent of victims never report due to shame, fear, or lack of recourse.
Below is an overview of how these scams work, their connection to Mexican TCOs, and actionable steps to consider to help protect yourself.
1. Initial Timeshare Pitch
Fraudsters pose as brokers, travel agents, or legal representatives offering to buy or rent your timeshare. After establishing trust and credibility with timeshare owners, scammers will claim to represent ready buyers, renters, or investors and then exploit victims’ trust. Sales reps create urgency, claiming the offer is only valid that day, pushing victims to make hasty decisions without proper review.
Most common fraud schemes are:
- Timeshare Investment Scams: Scammers claim that the victims are entitled to supposed shares of stock associated with their timeshares and offer to broker the sale of the equity to ready investors.
- Timeshare Re-Rent Scams: Scammers offer to rent out victims’ timeshares to ready renters at or above market rates. In this variation, scammers may highlight an upcoming holiday or tourism event near the victims’ timeshares to convince them that the offers are legitimate.
- Timeshare Exit Scams (also known as Timeshare Resale Scams): Scammers offer to purchase timeshares at or above market rates on behalf of ready buyers.
2. Involvement of Mexican Financial Institutions
- Illusion of Legitimacy: Scammers use the names of reputable Mexican banks (e.g., Banorte) to create fake escrow accounts or loan agreements. Fraudsters use deceptive documentation, official-looking letters, seals, or “notario” (public notary) names to appear legitimate, even email addresses.
- Tactic: Victims are instructed to wire funds to Mexican bank accounts for “property security,” “taxes,” or “government registration.”
- Warning: Legitimate banks may be impersonated. Always verify independently, as bank involvement does not guarantee authenticity.
- Please note that on June 25, 2025, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) issued unprecedented orders under the newly enacted 21 U.S.C. § 2313a authority, targeting three Mexico-based financial institutions: CIBanco, Intercam Banco, and Vector Casa de Bolsa. These entities were designated as “financial institutions of primary money laundering concern.”
3. Fake Government Involvement
- Sophisticated Fraud: Scammers send fraudulent letters from Mexico’s SAT (Tax Authority) or “aduanas” (customs service), claiming unpaid taxes or fees are required to release sale or rental income. Please note that Mexican Governmental agencies do not get involved in time share related transactions.
- Tactic: Victims are told funds are “held at the border” or require “government clearance,” pressuring them to pay large upfront sums.
- Any demand for government-related payments should be verified with a trusted Mexican attorney. Please note that Mexico has a free flow of capital policy. Mexican government does not seize money on a regular basis.
How to Protect Yourself – consider the following:
- Hire Local Legal Counsel: Engage a bilingual Mexican attorney unaffiliated with the timeshare company before signing anything.
- Avoid Upfront Payments: Avoid paying fees for resale, rental, or cancellation services without verification.
- Verify Bank Accounts: Do not wire money to unverified Mexican accounts. Confirm legitimacy with your bank or attorney.
- Scrutinize Government Claims: Consult a Mexican attorney immediately if asked to pay “government fees” or taxes.
- Demand Transparency: Request a full, translated copy of any contract before signing.
- Report Fraud: Contact PROFECO (Mexico’s consumer protection agency), CONDUSEF (for financial institution fraud), your home country’s embassy, or the FBI’s Internet Crime Complaint Center.
Red flags to watch for:
- Unsolicited Offers: Unexpected calls or emails offering to buy or rent your timeshare.
- Upfront Fees: Requests for “processing,” “tax,” or “transfer” fees before a transaction is complete.
- Unrealistic Promises: Offers significantly above market value or guarantees of quick sales/rentals.
- Pressure Tactics: Urgency to act immediately or threats of penalties for delay.
- Vague Contracts: Incomplete or unclear documentation lacking legal terms.
- Suspicious Requests: Demands for sensitive information like bank account or passport details.
- New Shell Companies: Transactions involving recently formed Mexican companies with minimal online presence or ties to timeshare, travel, or real estate sectors.
Additional Resources
- FBI Victim Resources: Visit the FBI’s website for guidance on reporting timeshare fraud.
- FinCEN Rapid Response Program: File complaints with the FBI’s IC3 to activate this program, which collaborates with global financial intelligence units to interdict stolen funds.
- U.S. Treasury Sanctions: OFAC has sanctioned CJNG-linked individuals and companies in Puerto Vallarta for timeshare fraud, highlighting the issue’s severity.
By staying vigilant and informed, you can enjoy Los Cabos’ beauty without falling victim to these predatory schemes.
About Snell & Wilmer
Founded in 1938, Snell & Wilmer is a full-service business law firm with more than 500 attorneys practicing in 17 locations throughout the United States and in Mexico, including Los Angeles, Orange County, Palo Alto and San Diego, California; Phoenix and Tucson, Arizona; Denver, Colorado; Washington, D.C.; Boise, Idaho; Las Vegas and Reno-Tahoe, Nevada; Albuquerque, New Mexico; Portland, Oregon; Dallas, Texas; Salt Lake City, Utah; Seattle, Washington; and Los Cabos, Mexico. The firm represents clients ranging from large, publicly traded corporations to small businesses, individuals and entrepreneurs. For more information, visit swlaw.com.
