Legit Exit Firm or Scam? How to Tell, From the Enforcement Record

What separates a legitimate exit firm from a scam?

The enforcement record answers this better than any review site. In two major enforcement cases, regulators described operators who claimed ties to developers they didn’t have, took large fees before doing any work, refused promised refunds, and told owners to stop paying. A legitimate attorney-backed firm does none of that. It reviews your documents before it quotes, puts one flat fee in writing, names the attorney who will handle your file, and tells you when a free route is still open.

Disclosure: Candid Yak works with Vacation Ownership Consultants, a timeshare exit firm, and may be paid when readers hire it. We cite its published case data on this page where marked.

This page reads both case files, then turns each finding into a check you can run on any firm, including Vacation Ownership Consultants (VOC), the attorney-backed firm we work with.

Case one: what was the $140 million FTC case about?

On April 20, 2026, the FTC announced that a federal court ordered Christopher Carroll to pay $140 million: $95 million in redress to consumers and a $45 million civil penalty that goes to the U.S. Treasury. The court also permanently banned him from advertising or selling any timeshare exit service.

Carroll was president and CEO of the Square One Group, one of the companies behind a scheme that also operated as Consumer Law Protection, Premier Reservations Group, Resort Transfer Group, and Timeshare Help Source. The Department of Justice, suing for the FTC, and the state of Wisconsin filed the case in November 2022 in federal court in the Eastern District of Missouri. According to the FTC, the scheme took more than $90 million from consumers, mostly older adults. The Justice Department said it harmed over 11,000 consumers, who paid from $5,000 to over $80,000 each.

In its 2022 complaint, the FTC alleged that direct mail drew owners to in-person seminars, where presenters used the logos of legitimate timeshare companies and trade groups to suggest an endorsement, told owners they could not exit on their own without paying a large sum, and pressed them to buy the same day. The FTC alleged that sales documents promised a full refund under a “guarantee,” and that when owners asked for one, the defendants cited “non-existent litigation, the COVID pandemic, or other phony reasons” and denied nearly every request.

The contracts also told buyers they could not cancel. The FTC’s Cooling-Off Rule gives you three days to cancel many sales made at your home or at a seller’s temporary location, such as a hotel or convention center. It excludes real estate, so it generally won’t undo the timeshare purchase itself, but the FTC said the rule “guarantees consumers the right to cancel a contract like this,” meaning the exit contract, within three business days.

Case two: what did Washington find about Reed Hein?

Washington’s attorney general sued Reed Hein & Associates, marketed as Timeshare Exit Team, in 2020 under the state’s Consumer Protection Act and Debt Adjusting Act. In September 2021 the company agreed to a consent decree: $2.61 million paid to the state, plus $19 million in suspended penalties owed if it violated the terms, for a total judgment of $22 million.

According to the attorney general, more than 2,800 Washingtonians paid Reed Hein upfront fees from just under $3,000 to tens of thousands of dollars per exit, and the office received 283 complaints. The company had contracted for more than 41,000 exits across North America, and more than 16,000 were still pending, thousands of them for three years or longer. One couple paid $6,600, lost contact with the company, and later learned their resort owners’ association offered an exit that consisted of filling out a form and paying a $20 fee. Attorney General Bob Ferguson said, “Reed Hein deserves its F rating from the Better Business Bureau.”

The decree required Reed Hein to stop claiming it “forces” or “compels” resorts to take timeshares back, stop claiming it does not sell its customers’ timeshares, stop transfers done without the resort’s knowledge or consent, disclose that some exit methods may lead to foreclosure, disclose that files may be outsourced to third-party vendors, set aside at least 20 percent of each customer’s payments for refunds, and give a partial refund to any customer not out of the timeshare three years after signing.

What are the red flags, and what does a legitimate firm do instead?

“You can’t get out without us.” The FTC alleged this claim in the Square One case. The FTC tells owners to contact the developer or the resort’s management company and ask about their options, and notes that some timeshare companies have exit programs.

What a legitimate firm does: expects you to have asked the resort first, and tells you when a free route is still open. VOC’s own process begins with contacting your resort and checking the resale market; its file review is free, and its pricing page says its qualification process “ensures you don’t pay for services you don’t need.”

Money before anyone reads your contract. The FTC lists “demands you pay large up-front fees before they do anything” among the signs of an exit scam, and Washington said Reed Hein charged customers with mortgages up to $8,795 where the state’s Debt Adjusting Act caps initial fees at $25. Minnesota’s attorney general says it is illegal in that state to charge an upfront fee for debt-settlement services, and in January 2025 announced settlements with three exit companies, one of them called Encore Law Inc, that returned $269,378 to consumers.

What a legitimate firm does: reviews your deed, contract, and statements first, then quotes one flat fee in a written agreement. VOC says it doesn’t discuss billing until it has confirmed an owner qualifies.

A claimed connection to your developer. Bogus affiliation claims led the FTC’s list in the Square One case.

What a legitimate firm does: says plainly that it has no relationship with your developer. If anyone implies they work with or for your resort, call the resort and ask. Some developers also say a third party can cost you their program. Holiday Inn Club Vacations says that if it detects exit company involvement, “you will forfeit the ability to participate in Horizons,” so apply to Horizons and wait for its written answer before contacting any exit firm, including for a free consultation. At Westgate, according to Rebecca Tushnet’s law blog, an exit company alleged in a lawsuit decided in 2024 that the developer has conditioned repossessions on an affidavit that the owner has not worked with “any timeshare exit company, lawyer or law firm.” Westgate disputes that the language covers all lawyers, and the court called it “sweeping.” Ask the Legacy Program whether any such condition applies before you contact an exit firm.

It found you. The FTC lists unsolicited calls or messages offering help among the scam signs, and says scammers may use public records to find owners. The Square One scheme found its customers by direct mail.

What a legitimate firm does: waits for you to ask.

Today-only pressure. The FTC described pressure to buy the same day, and Minnesota’s attorney general warns against anyone who pushes you to sign immediately.

What a legitimate firm does: lets you take the agreement home, read it, and ask questions before you sign.

Instructions to stop paying, or to ignore the resort. The FTC lists instructions to stop paying your mortgage or fees as a scam sign. Washington said some Reed Hein customers who were told to stop paying may have been sent to collections or had their credit damaged, and that Reed Hein frequently advised customers to ignore resort communications. One owner who stopped paying on the company’s advice could not fight the resort’s collection action, and later said, “We have not even been able to look into buying a house.” A law license does not change this: in Westgate Resorts v. Sussman, a federal court in Florida found that an exit lawyer’s “directions that owners stop payments are unjustified” and held him subject to personal liability.

What a legitimate firm does: tells you to keep paying while the file is open, and explains in writing any method that could affect your credit.

A guarantee that defines success against you. Reed Hein advertised a 100 percent money-back guarantee, but it counted foreclosure as a successful exit, so customers facing foreclosure were not entitled to a refund. The FTC lists “guarantees” or “promises” to cancel your contract among the scam signs.

What a legitimate firm does: makes no promise about the developer’s answer, and states in writing what counts as a completed exit and what happens to your fee if the developer refuses.

“Escrow” with nothing behind it. Washington’s consent decree required Reed Hein to hold back at least 20 percent of each customer’s payments for refunds. VOC warns that many exit companies advertising escrow aren’t using real escrow accounts, and that the “escrow” company is often run by the same people as the exit firm.

What a legitimate firm does: names any escrow agent so you can confirm it is independent, and writes down exactly what releases the money.

Nobody can tell you who is working your file. Washington said Reed Hein’s business model was “to outsource nearly everything,” that it sometimes had no contract with its vendors governing their conduct, and that it often did not know whether a vendor was pursuing an effective or legal course of conduct.

What a legitimate firm does: names, in writing, the attorney who will represent you, so you can look that attorney up with the state’s lawyer regulator before you pay. Our attorney guide shows how.

What should you do before you pay anyone?

1. Use your rescission window if you signed recently. Cancel in writing; it is free and returns your money. The rescission guide covers the notice.
2. Contact your resort and check the resale market. Ask in writing for its exit program by name, what it costs, and what disqualifies you, and look up what comparable weeks actually sell for. The FTC tells owners exploring an exit to “start by contacting your timeshare company directly,” and VOC’s process starts the same way. If the call or an owner update meeting turns into an upgrade pitch, sign nothing and count the pitch as a no.
3. If there’s no resale value and the resort refuses or quotes a price you can’t accept, get a free consultation and file review from an attorney-backed exit firm before you commit to anything. VOC’s review is free, and you decide afterward whether to enroll.
4. Search any company’s name with the words scam or complaint, which is the FTC’s first step, and look for actions by your state attorney general.
5. Get every promise in writing. The FTC calls that your right.
6. Pay by credit card if you can. Minnesota’s attorney general notes that cards offer dispute options, while cash, debit, or check payments can be harder to cancel and refund.

Other routes remain: your own attorney if you have a documented claim, or resale through a licensed broker with no upfront fee. The exit firm guide walks through what an attorney-backed firm should put in writing. If you already paid a company and got nothing, report it to the FTC at ReportFraud.ftc.gov and to the attorney general in the state where the timeshare is located.

Keep the loan separate from all of this. Few lenders will refinance against the timeshare itself, because it has almost no resale value, but if you qualify for a lower rate, a personal loan can replace the developer’s loan on its own schedule.

Disclosure: Candid Yak works with Vacation Ownership Consultants, a timeshare exit firm, and may be paid when readers hire it. This page’s author, Kira Fairbank, is a manager at Vacation Ownership Consultants. We cite its published case data on this page where marked.

This is general information, not legal advice. If you have already paid an exit company and gotten nothing, take your contract to an attorney licensed in your state, who can tell you whether you have a claim against the company you paid.