Timeshare Scam Tips

NEW YORK (MainStreet)—When Robert Burk received a phone call from Timeshare Mega Media in 2009 about selling his Lake Tahoe timeshare, the electronics engineer jumped at the opportunity.

"I was unemployed at the time, and they offered to resell it for $22,000," said Burke who originally purchased the $14,000 timeshare in exchange for one week in the condo every other year.

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The 53-year-old gave the Florida-based company $2,450 up front to make the proposed resale deal happen.

"Timeshare Mega Media kept me going for a long time, assuring me that a sale was in the works but most calls were never returned," Burk said. "I got tired of the runaround and filed a complaint with the state of Florida."

It turns out that the resale offer was fake and Timeshare Mega Media didn't really have a buyer for Burk's Lake Tahoe timeshare.

"They did have a license issued in Florida for telemarketing, but Timeshare Mega Media was not licensed to sell property," said Burk, who has since recovered $1,900 of the money he lost.

Burk is one of the more than 13,000 written timeshare resale complaints in the Federal Trade Commission (FTC) database since 2009.

"Con artists take advantage of timeshare owners who have been in tough financial straits and are desperate to sell their timeshares," said Charles A. Harwood, acting director of the FTC Bureau of Consumer Protection. "They persuade owners to pay fat, up-front fees by saying they have someone ready to buy the property but that's a lie."

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The FTC announced 191 actions to stop fraudulent operations from the marketing of timeshare property resale services. About 83 civil actions were brought by 28 states and 25 actions brought by police in 10 other countries. As a result, more than 184 individuals face criminal prosecution by U.S. attorneys and local law enforcement.

Companies named in the lawsuits include Resort Solution Trust, Resort Property Depot, Vacation Communications Group and Timeshare Mega Media.

"These people weren't really reselling timeshares," says David Horn, assistant regional director with the FTC. "So, we've sued a bunch of them. This is a fraudulent activity that has become quite common, which is why there are so many enforcement actions."

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Anybody who owns a time share should be cautious about falling prey to these scam artists. Before buying a timeshare or selling one, consider the following tips:

  • 1. No one legitimate is going to ask you to pay money up front to sell your time share. "When you sell your house, you don't shell out a bunch of money to the closing agent," Horn said. "The costs are covered in the proceeds of the sale. It's the same with a timeshare."
  • 2. If the offer sounds too good to be true, it probably is. "Never pay for a promise," Harwood said. "Get everything in writing first and pay only after your unit is sold."
  • 3. A legitimate company won't ask you to pay for a prize. Any company trying to sell you on a "free" vacation will probably want something from you, such as taxes and fees and attendance at mandatory timeshare presentations. Find out the costs before agreeing to anything.
  • 4. There's not a good market for used timeshares. "Timeshare owners who want to sell have lost interest or they're elderly and can't use them anymore," said Horn. "Some have health or financial problems and they view their timeshare as an investment to cash in but people don't pay as much for used timeshares."
  • 5. Before doing business with any company you don't know that texts, emails or cold calls, contact the state's Attorney General and the local consumer protection agency for a run down on complaints. Search online by entering the company name and the word complaints or scam to read what other people are saying.
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