FTC and Timeshare Scams
The sale of timeshares in hot vacation spots has long been a big business. If you have ever visited one of these spots, the chances are high that you have been approached by a salesperson selling timeshares. Their methods can often be deceptive. They offer complimentary dinners or free junkets that usually wind up being high-pressure sales pitches for the purchase of timeshares.
However, if you already own a timeshare you probably know how hard they are to sell due to the enormous amount that are on the market. This opens owners to unscrupulous companies that promise they can sell your timeshare for top dollar…but…often their claims are too good to be true and can cost you up-front money that can be hard to ever recover.
In a press conference on June 6, 2013, the Federal Trade Commission announced 191 actions to stop fraudulent operations. These include 3 FTC cases, 83 civil actions brought by 28 states, and 25 actions brought by law enforcement agencies in ten other countries.
The FTC noted that fraudulent timeshare resellers lure vulnerable consumers into paying hefty up-front fees, falsely claiming to have interested buyers ready to pay top dollar for the properties. They claim sales are about to happen, but there are no buyers, and consumers lose hundreds or even thousands of dollars. Deceptive travel prize promoters trick consumers into paying for discounted or “free” vacation packages supposedly worth thousands of dollars, but most people get nothing of value or have to attend high-pressure timeshare sales presentations while on vacation.
During the conference Charles A. Harwood, the FTC’s Bureau of Consumer Protection Acting Director said, “Con artists take advantage of timeshare owners who have been in tough financial straits and are desperate to sell their timeshares. They persuade owners to pay fat up-front fees by saying they have someone ready to buy the property, but that’s a lie. Our message to timeshare owners is simple – never pay for a promise, get everything in writing first, and pay only after your unit is sold. Our message to timeshare resale scammers is simple, too – law enforcement agencies at every level of government are working together to put an end to this problem.”
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida said, “We cannot allow our elderly and vulnerable real property owners to continue to be the target of fraud schemes.”
And, Alan Schlaifer, an attorney based in D.C. who also is a former FTC trial lawyer said, “This is probably one of the largest FTC-attorney general waves of coordinated litigation ever. It demonstrates clearly that the federal and state officials involved are serious about stamping out deceptive and fraudulent practices from bogus timeshare resale firms.”
The FTC has updated its education materials on travel and timeshare resale frauds in an effort to educate consumers and avoid these types of scams. For more information visit ftc.gov/travel, which includes travel tips, international driver’s license scams, home buying tips, as well as an interactive travel fraud game.
Until next time, I’m Attorney Francine Ward helping you protect what’s yours.
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FTC and Timeshare Scams
The timeshare industry is very complex and controversial. Some people love it, some people hate it; there are no uncertain terms. The truth is that the sale of vacation ownerships is an extremely profitable business for the timeshare companies, being that they have the possibility to sell each unit to 52 different owners, one for each week of the year. But, what about the buyers? Is it a good deal for them too? Unfortunately, many timeshare purchasers feel they were scammed and are not completely satisfied with their membership.
With this struggling economy, it is better for us to think on what is best for our pocket. Before taking any hasty decision, it is important to compare all the possible options and not to let us be dazzled by the first timeshare deals we see.
Timeshare fraud has been around since the timeshare idea was created, but they increase during poor economy. When times are difficult, timeshare owners are stuck with properties they can’t travel to or even afford. Desperate to recoup some money to pay for bills, they can easily become victims to scams artists pretending to be their timeshare salvation who will take upfront fees -as much as five number figures in some cases- but fail to fulfill their promise.