You think it’s hard to sell a house? Try selling a timeshare. It’s nearly impossible. That’s why con artists are working the market. They hope to cash in on owners who are desperate for help.
“There are tens of millions of dollars being bilked from people who are trying to unload their properties because they need the money,” says Lois Greisman, head of the Division of Marketing Practices at the Federal Trade Commission.
On Thursday, a Florida couple who ran Timeshare Mega Media and Marketing Group – a company that’s alleged to have defrauded thousands of people out of at least $2.7 million – settled an FTC complaint by agreeing never to work in the timeshare resale business again.
The FTC complaint alleges the company’s representatives told timeshare owners they had buyers lined up and waiting.
“In many cases, defendants begin the call by representing that they have a buyer for the consumer's timeshare unit and that the sale can be closed within a specified period of time, often 30 to 45 days. Defendants also typically tell consumers the price the purported buyer is willing to pay for the timeshare unit, which frequently is at or above the consumer's asking price.”
A fee, typically $1,996, was required to get the process started. But that money was supposedly refundable when the sale closed.
The feds says people who took the bait received a contract to “advertise” their timeshare. A clause in the contract specifically said the company did not represent or guarantee that the property would be sold or rented, directly opposite of what the telephone salesperson stated.
The FTC says many people who signed the paperwork assumed it was a sales contract. Those who questioned the contract’s validity were given the run-around and falsely told that a sales contract would follow.
The government’s complaint says the company never had any timeshare buyers lined up and never actually assisted anyone in selling a timeshare. People who demanded a refund rarely got one.
Timeshare resale scammers target people who advertise condos for sale. But they also work off lists of timeshare owners. So any owner could get a called by a timeshare resale scammer.
“When someone contacts you out of the blue and they say, ‘Pay me now; time is of the essence. You’ve got to pay upfront to seal this deal.’ Don’t do it,” warns the FTC’s Greisman. “That is as large of a red flag as you’re ever going to see.”
- FTC consumer alert: Selling a timeshare through a reseller
- Press release: FTC action results in ban against couple from telemarketing, timeshare resale services