Timeshare Exit Company Red Flags, Built From the Enforcement Record

Two case files, not a listicle

Most red flag articles about timeshare exit companies are guesswork. This one is not. Two enforcement records describe the pitch in detail, under oath, and the list below is built out of what regulators actually alleged rather than out of general advice about scams.

Read the conduct first. The flags fall out of it on their own.

Case one: the $140 million judgment

On April 20, 2026 the FTC announced that a federal court ordered Christopher Carroll to pay $140 million and permanently banned him from marketing timeshare exit services. The split: $95 million in redress to consumers, plus a $45 million civil penalty that by law goes to the U.S. Treasury.

Carroll was president and CEO of the Square One Group, one of the corporations behind an operation that also went by Consumer Law Protection, Premier Reservations Group, Resort Transfer Group, and Timeshare Help Source. The Department of Justice, acting for the FTC, and the state of Wisconsin sued in November 2022. The FTC says the scheme defrauded consumers, mostly older adults, out of more than $90 million.

The alleged playbook, in the FTC’s own summary, was direct mail and in-person presentations used to make an array of deceptive claims. Specifically:

• Falsely claiming to be associated with timeshare companies
• Falsely telling consumers they could not exit a timeshare without paying the defendants’ exorbitant fees
• Failing to provide promised refunds
• Forcing consumers to sign contracts they were told they could not cancel, in violation of the FTC’s Cooling-Off Rule

That last one has a detail worth pausing on. The Cooling-Off Rule gives you three days to cancel certain sales made at your home, workplace, or a seller’s temporary location, like a hotel room or a convention center. It does not cover real estate, so it is generally not what saves you from a timeshare purchase. It covers the contract you sign with the exit company in a hotel ballroom.

They ran a rescission scam on people who came to them because they had missed a rescission window.

Case two: the consent decree

Washington State sued Reed Hein & Associates, marketed as Timeshare Exit Team, in 2020. In September 2021 the company agreed to a consent decree: $2.61 million paid to the state, with an additional $19 million in suspended penalties owed if it violated the terms, for a total judgment of $22 million.

The state’s file is unusually detailed. More than 2,800 Washingtonians signed with Reed Hein, paying upfront fees from just under $3,000 up to tens of thousands of dollars per exit. The attorney general’s office received 283 complaints. The company had contracted to provide more than 41,000 timeshare exits across North America, of which more than 16,000 were still pending, thousands of them for three years or longer.

Attorney General Bob Ferguson’s line: “Reed Hein deserves its F rating from the Better Business Bureau.”

The founders had been selling rain gutter systems before one of them noticed a long line at a timeshare exit booth at a trade show.

What the state alleged, and what the decree then required the company to stop, is the most useful list in this whole category. Under the consent decree Reed Hein had to discontinue claiming it “forces” or “compels” resorts to take back timeshares, discontinue claiming it does not sell its customers’ timeshares, stop doing transfers without the resort’s knowledge or consent, disclose that some exit methods may lead to foreclosure, disclose that customer files may be outsourced to third-party vendors, set aside at least 20 percent of each customer’s payments for refunds, and provide a partial refund if the customer is not out three years after signing.

Every one of those requirements is a description of what was happening before.

The red flags

“You cannot get out without us.” This is the core claim in the FTC case, and it is false. The FTC tells owners to contact the timeshare developer or the resort’s management company and ask about their options, and notes that some companies have exit programs that let you exit for a modest fee. The timeshare trade association’s own exit site tells owners the exit process is the same with or without an exit company. When the industry and its regulator agree on something, the company telling you otherwise is the outlier.

A large fee before anything happens. The FTC lists demands that you pay large up-front fees before they do anything among the signs of a timeshare exit scam. Both case files are built on upfront money.

Any claim of affiliation with your timeshare company. Falsely claiming to be associated with timeshare companies is the first item in the FTC’s list of deceptive claims. If someone implies they work with, work for, or are approved by your developer, call the developer and check. That call is free.

An unsolicited call, letter, or invitation. The FTC notes that scammers use public records to find timeshare owners and contact them. Both of these operations found their customers rather than the other way around. Nobody who reaches you first is doing you a favor.

A presentation in a hotel ballroom. Same room, same pressure, same day-only urgency as the sales pitch that got you here. The FTC’s advice about timeshare presentations applies with equal force to exit presentations: take the paperwork home and read it on your own before you commit.

Instructions to stop paying. The FTC lists this among the scam signs directly. Washington’s decree forced Reed Hein to disclose that some exit methods may lead to foreclosure. One Washington owner followed that advice, missed the collection action while traveling for work, and described being unable to look at buying a house afterward because of the credit damage.

Instructions to ignore your resort. Washington found Reed Hein frequently advised customers to ignore communications from their resorts, and warned customers who had supposedly been exited that the resort might “try to trick them” into continuing to pay, so they should ignore future correspondence and bills. Some of those customers were still on the hook and found out from a loan application.

A guarantee that defines success against you. Reed Hein advertised a 100 percent money-back guarantee. Under its terms, customers facing foreclosure or already foreclosed on were not entitled to their money back, because the company considered foreclosure a successful outcome. The state’s position was that anything terminating the ownership counted as an exit satisfying the guarantee. Read the definition, not the headline.

Vagueness about who actually does the work. Washington’s case describes a business model built on outsourcing, in which the company sometimes had no contract with its vendors governing their conduct and often did not know whether the vendor was pursuing an effective or legal course of conduct. Ask who performs the work, what their license is, and what your contract says if they fail.

No escrow, no refund mechanism. The decree required Reed Hein to set aside at least 20 percent of each customer’s payments for refunds, which it had not been doing. If money you pay today is spendable by the company today, your refund is a promise rather than a fund.

What to do instead, in order

Call your developer and ask for the exit or owner services department. Ask what programs exist, what they cost, and what disqualifies you. Get the answer in writing.

If you are inside the rescission window, use it today. That is a full refund and it costs nothing.

If you are going to hire someone anyway, do the FTC’s homework first: search the company name plus “scam” or “complaint,” contact the state attorney general and local consumer protection agencies where the company is located, get every promise in writing, and confirm what you can cancel and when.

And keep the two problems separate. The purchase loan is ordinary consumer debt at a high rate, and it can be refinanced on its own schedule regardless of what happens with the ownership. No exit company is required for that, either.

This is general information, not legal advice. If you have already paid an exit company and gotten nothing, report it to the FTC at ReportFraud.ftc.gov and to your state attorney general, and take your contract to an attorney licensed in your state.