Feds shut down timeshare resale scam

The Federal Trade Commission’s recent case is a cautionary tale about why you should never trust timeshare resale telemarketers.

I still get frustrated at how one unsolicited phone call from a faceless stranger can trick an elderly consumer into giving up hundreds or thousands of dollars in a timeshare resale scheme. I’ve even advocated for seniors who don’t own and have never owned a timeshare who still fell for the scheme!

The scheme works like this: a scammer or telemarketing operation that has no connection at all to timeshares will target seniors in a calling area. They will robo-dial the seniors with automated, caller ID-spoofed calls until someone answers, hopefully someone who actually owns a timeshare somewhere. Once they get that senior on the line, they have a script designed to get the senior to give up where the timeshare is. They claim to be a timeshare resale agency from that area, promising the senior a fast re-sale of the property if they’re looking to unload it. All the senior has to do is pay anywhere from $500 to several thousand dollars upfront to cover administrative or legal fees.

See where I’m going with this? So did federal agents.

Agents with the Federal Trade Commission (FTC) charged a Florida outfit named Pro Timeshare Resales with stealing nearly $15 million from timeshare owners (or seniors who thought they were timeshare owners) through enormous upfront fees and false promises to re-sell those timeshares. Pro Timeshare Resales never had any connection to any of the properties. Each time, they took the money and ran — the seniors, left never to hear from Pro Timeshare Resales again and without a means to contact the bogus operation.

“The defendants charge property owners as much as $2,500 or more in advance but fail to deliver on their promises,” the FTC said in its news release. It continued: “The FTC noted in the complaint that the defendants string some owners along with additional false claims, such as that they will soon send them money from a sale or rental, and often get them to pay extra for purported closing costs or other fees.”

Acting on the FTC’s investigation, a federal court halted the operation and froze its assets. The FTC reached a settlement with Pro Timeshare Resales’ principals. According to the FTC, the settlement bans the principals as individuals and the company as a whole from telemarketing and from timeshare resale pitches. It must also pay $3 million in fines, a penalty that pales in comparison to what they snookered from all of those seniors.

I’ve always told seniors — those who truly own timeshares and who were solicited by a timeshare reseller — that the managing companies of their timeshares may prohibit the use of so-called “resellers” in the first place. I’ve advised those seniors who really want to sell their timeshares to research listing agents or realtors who are licensed to sell timeshare properties in those areas, instead of accepting an unsolicited, uncertain phone pitch.

“Seniors tend to be a primary target for online and telephone scammers, in part, due to their trusting nature,” said Ken Cope, president of Home Instead Senior Care Memphis/Southaven/Oxford, your #WiseChoice for in-home senior care. “The statistics are staggering, especially considering the fact that many seniors avoid reporting being victims due to a fear of embarrassment and a fear that their children will see them unfit to handle their own affairs.”

Besides simply not taking that call (nor should you ever answer a call from a number you don’t recognize or a call showing up as your own number on caller ID), the FTC suggested these solutions to avoiding a timeshare resale scam:

• Check out the reseller. Contact the state attorney general’s office and local consumer protection agencies in the state where the reseller is located. Ask if they have any complaints on file. You can also search online for complaints.
• Ask about fees. It’s better to do business with a reseller that takes fees after the timeshare is sold, assuming it is a legitimate, licensed re-seller. If you must pay a fee in advance, get refund policies in writing.
• Get everything in writing. Read the contract carefully to make sure it matches promises you’ve been given verbally. It should include the services the reseller will perform, plus any fees you must pay and when. If the deal isn’t what you expected or wanted, don’t sign the contract.

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