Fraud Prevention for Timeshare Associations: Modern Risks and Practical Safeguards

Timeshare owners and management companies face unique payment fraud risks. As AI makes scams more sophisticated, an effective fraud-prevention strategy remains surprisingly simple: slow down, verify information and avoid rushing financial decisions.

Though the timeshare industry does not publicly report how owners pay annual maintenance fees, payment-fraud trends suggest that mailed checks present a growing risk. According to the Association for Financial Professionals, checks were the most-targeted payment method in 2025, with 58% of organizations reporting attempted or actual check fraud. And fraud losses continue rising: In 2025, the Federal Bureau of Investigation’s Internet Crime Complaint Center (IC3) received more than 1 million complaints, with losses exceeding $20.8 billion, a 26% increase from 2024.

Why Timeshare Entities Are Vulnerable

Timeshare associations and management companies face unique challenges in preventing fraud. They must manage:

• Geographically dispersed members
• Multiple payment methods 
• Remote board governance
• Limited staff capacity or volunteer staffing

Many owners are also accustomed to traditional payment methods and may benefit from education about the security advantages of electronic payments.

Couple those characteristics with sometimes outdated financial solutions, and your association may be exposed to bad actors. Fortunately, understanding the risks and implementing specific safeguards can protect your timeshare association.

Reducing the Risk of Payment Fraud

An effective way to reduce fraud risk is to move away from paper-based payment processes whenever suitable.

With some resorts still accepting owner payments in cash, this can sometimes create accounting and operational challenges. Cash payments may be harder to track, deposit and reconcile. They also increase the risk of loss if funds are misplaced, stolen or not properly documented before deposit.

Mailed checks can be lost, stolen or intercepted, while paper-based processes create additional administrative work and opportunities for error. Electronic payment options such as ACH, e-check and secure online payment portals offer owners convenience and reduce exposure to fraud.

Education is often the biggest hurdle. Some owners have paid maintenance fees the same way for decades and may not immediately see the value of changing their habits. Explaining the security benefits of electronic payments – and offering multiple options such as ACH, debit card, credit card or e-check – can encourage adoption.

Verify Before You Wire

Wire transfers play a significant role in the timeshare industry. Because wire transfers often involve significant sums and move quickly, they are a favorite target for scammers.

Fraudsters frequently impersonate vendors, management companies, attorneys or financial institutions, sending legitimate-looking emails or text messages requesting updated payment instructions. Once funds are sent to a fraudulent account, recovering them can be difficult.

Before any wire transfer, verify instructions through an independent channel. Instead of replying to an email, call a known phone number for the vendor, financial institution or service provider to confirm the details. Treat sudden changes in payment instructions as a red flag until verified.

Strengthen Internal Controls

Technology plays an important role in fraud prevention, but strong internal controls remain equally important.

• Provide annual fraud-awareness training for employees and volunteers who handle financial transactions. As scams evolve, regular training helps ensure people know what to look for.
• Implement dual-control procedures. Requiring two individuals to approve wire transfers, review large payments or authorize banking changes reduces the likelihood of both mistakes and fraud.
• Update governance practices. Periodically review and update authorized signers on all accounts and review financial reports. Establish clear procedures for approving expenditure and monitoring account activity.

AI Changes the Delivery Method, Not the Goal

Today’s fraudsters use AI to create convincing phishing emails, cloned voices and even realistic video deepfakes. Messages may appear more polished and personalized, making them harder to detect.

This makes verification even more important. Use tried-and-true fraud prevention practices:

• If an email, call, invoice or payment request seems unusual, verify it through another channel (such as a call to a known contact).
• Confirm account information against existing records.
• Review invoices carefully for tiny misspellings in email addresses or URLs.
• Check that payment amounts and supporting documentation make sense.

An Updated Approach

Ultimately, fraud prevention is more about governance policies than technology. Any association, regardless of budget, can implement strategies to protect its finances and avoid the stressful work of detecting and recovering from fraud.

Working with a banking partner experienced in timeshares can help. The right financial partner understands your organization, industry and needs and can help you guard against fraud in a rapidly changing landscape. Western Alliance Bank’s Association Banking Group to learn about timeshare association lending and deposit solutions or request personalized insights.