Attorney General Ellison cracks down on “timeshare exit” companies and issues consumer alert to avoid scams

Investigations lead to settlements with three companies that violated Minnesota law in promising relief from timeshare debts; AG to refund nearly $270K to Minnesotans

AG Ellison alerts Minnesotans: avoid falling victim to timeshare traps and exit scams

January 23, 2025 (SAINT PAUL) — Today, Minnesota Attorney General Keith Ellison announced he has resolved investigations and entered settlements with three different companies—Encore Law Inc., Last Resort Consulting, and Tradebloc—which purported to offer “timeshare exit” services that charge thousands of dollars based on promises to relieve Minnesotans from timeshare debts. In doing so, the companies violated Minnesota’s “debt settlement services” law by, among other things, charging large upfront fees and failing to obtain proper licensing. The Attorney General also investigated potential misrepresentations about the company’s services and statements about expected results. The settlements will result in $269,378 in refunds back to consumers.

”I hate to see unethical companies promise help to Minnesotans stuck in costly timeshare contracts, only to rip consumers off again,” said Attorney General Ellison. “I’m glad to announce that three timeshare exit companies have agreed to refund consumers and comply with Minnesota law going forward. I hope these settlements put others on notice that if they do not follow the law, we will hold them accountable.

“I strongly encourage Minnesotans to exercise caution when it comes to timeshare exit companies, especially older Minnesotans,” added Ellison. “Remember, in Minnesota, it is illegal to charge an upfront fee for debt-settlement services. And if something sounds too good to be true, it probably is. If you counter problems with a company that takes money to get you out of a timeshare agreement or any other debt, I encourage you to contact my office and the Minnesota Department of Commerce.”

Common Problems with Timeshares

The Minnesota Attorney General’s Office receives numerous complaints every year from consumers facing burdensome expenses and headaches with purchased timeshares. Timeshares are shared ownership arrangements for vacation property, giving multiple people the right to use the property for a set period of time every year. They are often purchased through resorts, real estate agents, or developers.

Common complaints about timeshares concern out-of-control and perpetual “maintenance fee” debts, inability to book desired reservation times, and inability to transfer the timeshare interest once it can no longer be used. The Attorney General’s Office has issued a publication Get the Facts Before Buying a Timeshare, with education and guidance for Minnesotans considering entering a timeshare to avoid the worse scams.

Beware of “Timeshare Exit” Scams

Because of the growing number of consumers looking to get out of unwanted and costly timeshares, a new industry of “timeshare exit” companies has sprung up in recent years promising consumers a way out. These companies typically are not sought out by consumers but are contacted through targeted mass mailings, online ads, and radio spots.

Unfortunately, timeshare-exist companies have exhibited a pattern of false promises and other problems that can only make consumers’ situations worse. According to AARP, time-share exist companies often “resort to an array of unsavory tactics,” including “high-pressure sales” and consumers being “forced to sign up for credit cards to pay off balances or [being] held for many hours and forced to watch absurd presentations that cite[] inaccurate laws as a scare tactic.” AARP also reports that “[s]ome shady companies market themselves as consultants, offering to advise people who own time-shares on how to get out of their contracts and even offering to do some of the work on their behalf.”

The businesses’ goal is often to get a large up-front payment, usually several thousands of dollars, at the end of a high-pressure in-person presentation. These presentations may include misleading scare tactics such as making consumers believe that their children will inherit and be saddled with ongoing maintenance fees. The businesses sometimes have the consumer transfer the timeshare interest to the company and do nothing more than contact the timeshare and ask to be relieved from the obligation. They might arrange for the consumer to stop paying the debt and force a foreclosure that can create more costs and harm the consumer’s credit. In worse cases, the company takes the upfront fee and does nothing or demands additional fees for what was originally promised and paid for.

In November 2022, the Federal Trade Commission and Wisconsin Attorney General filed a lawsuit against timeshare-exit companies for using these types of misrepresentations and high-pressure tactics to trick consumers — mostly older adults — into paying more than $90 million for time-share exit services that the companies didn’t deliver. The lawsuit alleges that the defendants used direct mail campaigns to lure time-share owners to high-pressure sales presentations at hotels and restaurants, where they were told that they had to act immediately to avoid being stuck with their time-shares forever and saddling their children and grandchildren with maintenance fees. The litigation is ongoing. One of the companies sued, Consumer Law Protection LLC, sold services in Minnesota. And the Minnesota Attorney General’s office is monitoring the lawsuit and the FTC’s pursuit of nationwide relief.

Beware of Timeshare Resale Scams

The Attorney General also cautions consumers to avoid “timeshare resale” scams. For these scams, a business will contact a person looking to sell their timeshare and pose as a real estate agent. The scam artist claims to have a buyer for the timeshare or guarantees he can sell the timeshare for a good price.

Scam artists go to great lengths to appear credible. They use the names, addresses, and phone numbers of reputable businesses, create elaborate websites and official-looking documents, and employ fake escrow agents and title companies—who are just other scammers. Some scammers may have information about you and your timeshare before calling.

After persuading you that they can sell your timeshare, the scammer may ask you to send money up front—usually by wire transfer—to pay closing costs, taxes, or other fees. If you pay, the scammer typically requests additional money for unforeseen expenses until you realize there was never a sale in the first place.

What Should I Do If I Am Trapped in a Timeshare?

The AGO has the following guidance for consumers who feel they are locked in a timeshare.

File a complaint with the Minnesota Attorney General. 

If the timeshare has become burdensome or too costly, you should file a Consumer Assistance Request Form with the Attorney General’s Office. The AGO can provide you with information you can possibly use to dispose of the timeshare interest and mediates complaints from Minnesota consumers subjected to unfairly high maintenance fees and other problems with existing timeshares.

If you feel you are the subject of fraud or misrepresentation with regard to a timeshare sale, you should complete a Consumer Assistance Request Form, which can also allow the AGO to mediate the complaint but also informs the AGO of issues for potential investigation and enforcement.

You may also wish to file a complaint with the Federal Trade Commission, which enforces federal laws against consumer fraud nationally and has taken action against fraudulent timeshare-exist companies.

File a complaint with the Minnesota Department of Commerce.

The Department of Commerce registers and regulates the sale and marketing of subdivided land, which includes timeshares, in Minnesota. It is important that this regulator to know about issues relating to timeshare sales. The agency can be contacted as follows:

Minnesota Department of Commerce
Securities Unit
85 7th Place East, Suite 500
St. Paul, MN 55101
(651) 539-1638
www.mn.gov/commerce

Avoid Timeshare-Exit Scams.

Consumers stuck in a timeshare should be wary when asked to pay a timeshare-exit company fund based on promises to relieve them from the debt. If consumers are considering a timeshare exit company in Minnesota, they should take several steps to protect their pocketbook from further harm:

• Check if licensed. Companies offering to provide advice or to act as an intermediary with a creditor and alleviate a debt in Minnesota generally must be registered as a debt-settlement-services provider by the Minnesota Department of Commerce. You can check the agency’s directory of licensees on its website.
• Research. Search for complaints about a company before you engage them to assist with your timeshare. If you don’t know the company’s identity from their marketing or communications, that’s a bad sign. It also may be a signal that the company is violating Minnesota’s personal-solicitation laws, which require companies to identify themselves and their sales purpose at the outset of the first communication.
• Don’t fall for high-pressure tactics. If you attend a session with a timeshare exit company and they put pressure on you to sign up immediately, this is a bad sign. There is usually no reason why you should have to rush to sign up for services except unless if the company wants to prevent you from further considering the cost and alternatives. Minnesota law also outlaws upfront fees for debt-settlement-service providers, so a company pushing for an immediate payment before services are rendered may be violating the law.
• Ask about refunds and use a credit card. You may have a right to cancel the purchase after you are signed up. So you should inquire about cancellation options and get promises about cancellation in writing before making any purchase. It may also benefit you to use a credit card, which has a mechanism to dispute a sale if the subject of fraud or misrepresentation. A payment by cash, debit card, or check can be harder to cancel and get refunded.
• Be cautious about defaulting. The timeshare company may tell you that they will arrange to default on the timeshare debt obligation to induce a foreclosure. This may affect your credit or cause further financial penalties, so consumers may want to avoid this practice or consult a financial advisor or lawyer before going forward.

Overall, consumers should consider alternatives to paying timeshare exit companies—such as reaching out to the timeshare company themselves or consulting with an attorney or licensed financial consultant about options for relief from the obligation.

Consumers can also avoid resale scams by never agreeing to send money by wire transfer, payment apps, or reloadable money cards to any party involved in the purported sale of a timeshare. Other tips for avoiding these scams are in the AGO’s publication Avoid Timeshare Resale Scams.

Minnesota consumers who wish to report problems with timeshares and timeshare-exist companies can contact the Attorney General’s Office for further information about these issues and the settlements described above. Minnesota consumers can file a complaint with the Attorney General’s Office online or call (651) 296-3353 (Metro area) or (800) 657-3787 (Greater Minnesota).