Florida Consumer E-Newsletter - April 2010
Charles H. Bronson
Commissioner
A Message from the Commissioner
Dear Friends:
With approximately $10 billion in sales in 2008 and $6 billion in 2009, the timeshare industry has a profound impact on our economy. According to the most recent statistics available from the American Resort Development Association (ARDA), there are more than 1,600 vacation ownership properties (commonly called timeshare resorts) in the United States. This represents 182,000 actual units and correlates to the ownership of 7 million intervals – almost 25% of these properties are located in Florida. While the ARDA reports that 85% of owners rated their overall timeshare ownership experience as either “Good”, “Very Good” or “Excellent”, the fact is that recently there has been a significant uptick in the number of people who would like to sell their timeshare.
Unfortunately, selling a timeshare has proven to be more difficult than many anticipated. Some owners have even been willing to sell for as little as $1 just to get out from under the taxes and mandatory annual fees…to no avail. Research has indicated that most satisfied timeshare buyers were motivated to purchase, in large part, based on trust. Sadly, that level of trust has been all but completely eroded by the number of scam artists that have infiltrated various facets of the industry.
This issue of the Florida Consumer E-Newsletter is dedicated to providing information that will assist consumers in avoiding timeshare marketing and resale scams. Our hope is that doing so will begin to eliminate some of the fraud associated with timeshares, thus restoring a certain level of trust among buyers. That trust will be one of the components necessary in helping to refuel this powerful economic engine.
Remember… consumer education is the best defense against fraud and deception! The Florida Department of Agriculture and Consumer Services is here for you – visit our website at www.800helpfla.com if you would like additional information, or call our Consumer Assistance Center. They will answer almost any question you may have or direct you to the best resource for assistance. If you are calling within Florida simply dial 1-800-HELP-FLA (435-7352), outside of Florida 850-410-3800 or en Español 1-800-FL-AYUDA (352-9832).
Sincerely,
For many years, timeshare fraud generally consisted of consumers being offered fabulous prizes or vacations at unimaginable prices in exchange for agreeing to listen to a simple timeshare sales presentation. It sounded too good to be true, and in many instances it was. Either the vacation accommodations or the prizes were not what they were purported to be, or there were hidden costs tied to the vacation. In a devious twist to these scams, individuals who may have taken one of these reduced price vacations five or six years ago in exchange for listening to a sales presentation are now being contacted and told that they didn’t fulfill all of their contractual obligations. The caller claims that because a second sales presentation was not attended within four years, the individual now owes $469.99. The consumer is then threatened with collection actions unless full payment is sent.
Currently, it is resale scams that are the most common type of fraud in the timeshare industry. With many owners desperate to get out from under their financial obligation, con-artists will prey on them by using unsolicited telemarketing, direct mail or e-mail to offer resale brokerage or resale advertising services. Sometimes the fraudster will claim to already have a buyer willing to purchase the unit, even stooping so low as to put someone on the phone who pretends to be the said buyer. They then claim all that is needed is a $600 or $1,200 deposit for “title fees” or to put in escrow while the sale is finalized. Of course the buyer never materializes and the scammer then claims that the money you gave was simply an advertising fee. In other instances, consumers are led to believe that for $1,500 their timeshare will be marketed and/or advertised in an attempt to resell it, when in reality the property is simply placed on a website that has little or no traffic directed to it.
Consumers should know that despite their claims, no resale company can guarantee an owner a sale. As if being scammed once isn’t bad enough, consumers must also be aware of a practice called “reloading.” This is when a person who has already been victimized gets an unsolicited phone call from an individual or company that claims to be able to recover the money which was lost in the scam for an upfront fee. The call may be from the same company that conducted the initial scam just reorganized under a new name, or it may be from a disgruntled former employee of that company who has absconded with all of the victims’ contact information in order to run his own scam. In either case, the chances are minimal that you will recover any of your money. The latest version of this particular fraud has someone calling the original victim claiming to be from the company that scammed them. They now are offering to refund the victim’s money but need a credit card number to facilitate the transaction. Doing so will most likely mean that you will be victimized a second time.
If you are contacted by someone offering to resell your timeshare, immediately become skeptical. Request all information in writing. If the contact is by telephone, ask the caller if he is licensed as a telemarketer with the Florida Department of Agriculture and Consumer Services. If they answer yes, ask for their “TC#” (telemarketing company number) and/or “TP#” (telemarketing salesperson number) and call 1-800-HELP-FLA (435-7352) to verify the number(s). If they claim to be a real estate agent or broker ask for their license number and verify its legitimacy with the Florida Department of Business and Professional Regulation. Simply call (850) 487-1395, or visit www.myfloridalicense.com.
One thing that will surely increase your chances of being scammed is giving a company any form of payment during an initial phone call or meeting. In 2009, the Florida Legislature passed a bill which helps keep the consumer from doing just that. The bill requires timeshare “resale service providers” to make additional disclosures (in writing) at the time of entering into a contract to list a timeshare for sale.
Before entering into a contract the following disclosures must be made in writing:
- A description of any fees or costs that must be paid to the resale service provider or any third party.
- When such fees or costs are due.
- The ratio or percentage of the number of listings of timeshare interests for sale by a resale service provider as compared to the number they have sold for each of the previous two calendar years.
If any of these three disclosures are missing, or not made in writing, the contract is void and the potential purchaser is entitled to a full refund of any money paid. Remember, if you feel you have been victimized or contacted by someone perpetrating one of these scams you should file a complaint online with the Florida Department of Agriculture and Consumer Services at www.800helpfla.com, or you may request that a member of our Consumer Assistance Center staff mail you a complaint form by calling 1-800-HELP-FLA (435-7352).
Happy vacationing!!
Additional Resources
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The links below are for your information only. The goal of the Division of Consumer Services is to provide additional information to consumers. The Florida Department of Agriculture and Consumer Services does not review or confirm these sites for accuracy.
Florida Department of Agriculture and Consumer Services
Vacations and traveling are usually fun times for everyone. Unfortunately, there are crooked sellers of travel out there trying to scam you out of your money. Before you book your next trip to paradise review this brochure to make sure you get what you pay for.
Federal Trade Commission (FTC)
The thought of owning a vacation home may sound appealing, but the year-round responsibility — and expense — that come with it may not. Purchasing a timeshare or vacation plan may be an alternative. If you consider a timeshare or vacation plan, the FTC, the nation’s consumer protection agency, says it’s a good idea to do some homework.
Florida Department of Business and Professional Regulation (DBPR)
As a regulatory agency, DBPR's top priority is to provide public information concerning Florida timeshare resorts and industry-related news. This site has been developed to bring you timely and relevant information concerning financial, examination, and enforcement issues affecting timeshare resorts registered with the division.
