Timeshare Scammers and What’s Being Done May 25, 2012Posted by JamesJewhurst in : General, Timeshare Resource , trackback
It’s about time, isn’t it? Visa and the U.S. Federal Trade Commission are joining forces to stop the timeshare resale scams from continuously showing up. Their new initiative is to warn people about these companies. Complaints have more than doubled in the recent years and is reported to be the highest complaint to the Florida Attorney General’s Office. According to the Visa-FTC Press release, here is an example of how the scam works:
A timeshare property owner gets a phone call with an offer to sell a vacation property to a waiting buyer. The timeshare owner is asked to sign a contract and pay a transaction fee – usually with a credit or debit card – before the alleged sale can proceed. But after the contract is signed and the fee collected, the timeshare owner rarely is contacted again by the reseller. In most cases, the buyer never existed, and the contract was for advertising services only. When the timeshare owner realizes this and calls to get the fee refunded, the fraudulent reseller typically ignores the phone calls, denies any refund requests, or stalls to go beyond chargeback timeframes.
Florida is also feeling the pressure. The FTC has already been taking action to discredit these fraudulent companies. On April 6th, 2012 Florida Governor Rick Scott signed into law the ‘Timeshare Resale Fraud Bill.’ Which is to protect owners of timeshare properties in the state. This new bill is essential in stopping individuals from misleading and misrepresenting themselves to the consumer. The bill requires timeshare resale companies to provide a written disclosure of any fees and costs, related to advertising, marketing or sale of the timeshare property, as well as any other disclosures.
On a side note, it should be known that these laws are being passed in hopes to curb scammers, not bring money back to those who were previously scammed.
Visa and the FTC offer some tips, but let me explain a little more in detail:
- Research the Seller – Yes this is a definite. There are so many resale companies that it is easy to confuse who called you, and when. Today’s online resources offer some trusted research and are available online. Some sources include http://www.Ranking.com, http://www. alexa.com. As always, do the due diligence in finding the right company for your needs. Also before you head over the BBB, be sure to understand how the BBB rating system works and how their paid sponsorships work.
- Get the details in writing – Of course, you need to know what you’re signing up for. Ask for a copy of the contract, and any service agreements. Know what their responsibilities are and know your responsibilities to them.
- Are they licensed – Ask them if they are licensed, or work with licensed brokers. Ask them how they handle the closing and who is responsible. Any fees?
- How they work for you – Ask. How they find your buyer, or your renter? How do they promote your property, where do they advertise? Will you get updates? If so, how often? Should I maintain contact? What is my role?
Lastly, the big one. Fees. This is a conversation that seemingly nobody wants to have. The big stance is NO UPFRONT FEES. Only use a company that takes a commission after it is sold. Great thought, but the likeliness of finding that company is slim. Most real estate companies won’t take on a timeshare. The problem would likely be that your timeshare isn’t located in the same state you are, neither is the broker you’d hire to sell your property. That closes off your exposure, unless you hire a licensed broker in every state. The biggest thing about fees is to know what you’re paying for. If you were to run an advertisement to offer your car for sale, you have to pay to run the ad, and gain exposure, in hopes of finding the buyer. It’s almost the same for timeshares. People have to know it’s available for sale, and have a way to contact you to get it.
Ultimately this is what the resale scam companies are focusing on. You and your desire to get out of owning that timeshare. Your desire to get out of making those maintenance fees and taxes. So write the information they give you down, due the research and make sure your money is getting used properly to help you find the buyer you need.