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Feds announce stepped up action against timeshare scammers

Posted by: Jane Friedmann Updated: June 6, 2013 - 3:52 PM


The federal government, in cooperation with state regulators, state attorneys general, law enforcement agencies and foreign partners has expanded its crackdown on timeshare resale scams, according to a press conference held by the Federal Trade Commission in Miami, Fla. on Thursday.


The FTC provided a list of 191 actions taken against timeshare resale scammers recently by it and its partners in crime prevention. U.S. attorneys have filed suit in 58 cases involving 168 individuals, resulting in a combined prison sentence of 218 years, Chuck Harwood, Acting Director of the FTC Bureau of Consumer Protection said.

The number of consumer complaints about the scams tripled between 2010 and 2011 nationwide. The 2012 figure is double that of 2010, the decrease from 2011 likely due in part to aggressive enforcement, according to Harwood.

Though these scammers are hard to pin down because they use fake street addresses, phone numbers that roll over to other phone numbers, and other deceptive practices, when enough detailed complaints roll in, it's sometimes possible to pinpoint the perpetrators, Harwood said.

A woman, Tracy, who spoke at the conference and was victimized twice for no more than $800 each time, was wary when a third scammer called her in 2011. She didn't fall for the pitch, but forwarded information she had gleaned to the FTC. "In January they got a multimillion dollar judgment against this company," Tracy said.

Florida's attorney general, Pam Bondi, said that of the top four complaints to her office in 2012, there were more timeshare-related complaints that the other three categories combined. In 2012, the office received more than 12,000 timeshare resale complaints, though that is down 56% from 2011, Bondi said.

Companies Bondi's office has successfully prosecuted were ordered to pay a total of $8 million in restitution and $28 million in civil penalties.

Sixteen people face criminal charges in Florida for impersonating employees of the Florida Office of the Attorney General.

When asked where a consumer can look to find an honest timeshare resale business, the conference panel seemed at a loss. They were able to repeat what NOT to do: Don't pay money on a promise, don't be taken in by someone who calls you up out of the blue, and so on.

But check out the FTC's website for a nifty infographic on the anatomy of a timeshare resale scam and tips on what NOT to do when selling your timeshare.





Readers ask about timeshare businesses

Posted by: Jane Friedmann Updated: June 4, 2013 - 5:39 PM

Recent articles by Whistleblower about timeshare resale scams has prompted a fair amount of requests for information on specific companies that have recently contacted readers.

One woman, Sharon, said "I'm involved right now with a possible timeshare scam that I've been dealing with for three months with Mexico."

Whistleblower left a message advising her to pay nothing further and file complaints with Attorney General Lori Swanson's office and the Better Business Bureau. She should also file a complaint with the attorney general's office in the state in which the business is allegedly located.

Another woman, Christina, wondered about a California company, Isosceles Foundation, which contacted her recently about removing her timeshare's maintenance fee. "He was so persistent and so pushy. 'Well, why would you want to pay the maintenance fees,' he asked."

Christina was suspicious of the offer because she said her Hawaii timeshare resort doesn't hold contracts with third parties. The Better Business Bureau's listing for the company has temporarily been removed. 

A couple, Mavis and Byron, asked if Whistleblower knows anything about a Florida company called Timeshares by Owner.

It appears the state of Florida filed suit against the company in 2010 after it received many complaints that the company was not complying with terms of an earlier settlement with the state.

The Office of the Attorney General of Florida included the following in a press release in 2010:

"The lawsuit naming Timeshares Direct, Inc., which does business as Timeshares By Owner, alleges that the company is in violation of a 2001 settlement with the Attorney General’s Office. According to that settlement, the company was prohibited from using misleading sales tactics, such as claiming to have a buyer waiting to purchase the consumer’s timeshare, to induce consumers into advertising their timeshares with the company. Since 2007, the Attorney General’s Office has received more than 180 consumer complaints alleging that Timeshares By Owner is not honoring conditions of the settlement."

In May 2012, Timeshares by Owner's website announced that the suit was settled with no finding of wrongdoing:

"Timeshares By Owner®, the nation’s leading timeshare advertising company for sale and for rent by owner, is pleased to announce the resolution of its pending matter with the Florida Attorney General. The Settlement Agreement states that there is no finding that there has been any wrongdoing by Timeshares By Owner®," the website said.

The actual settlement does admit it is a resolution of a disputed case, but it bans the company from 11 specific deceptive acts, including calling people on the do-not-call list and making misrepresentations to consumers.

The company has an "F" rating with the Better Business Bureau and the bureau has received 279 complaints about the company in the past three years.


BBB: Substituting water for gas may not be best idea

Posted by: Jane Friedmann Updated: June 3, 2013 - 6:03 PM

In the wake of higher gas prices, the Better Business Bureau has renewed it warning about a Sauk Centre company that sells a product it claims can use water to increase gas mileage..

Gertken Enterprises claims that by using its "water hybrid" product, namely its GMAX350 Hydrogen on Demand System," consumers can use less fuel. Its website boasts that "tens of thousands drivers are already utilizing this great technology." A disclaimer mentions that "tests and feedback" show the system has increased gas mileage by 25 percent and decreased emissions by 60 percent.

"Money/fuel-saving claims of this nature all have one thing in common: they are all too good to be true," said Dana Badgerow, president and CEO of the BBB of Minnesota and North Dakota. The company failed to provide requested documents to substantiate its advertising claims, the BBB said.

Last year the Federal Trade Commission put out a warning about companies making gas-saving claims. Some products may damage a vehicle or actually increase exhaust emissions, the warning stated.

The company could not be reached for comment on Monday.

Timeshare resale scams flourish in Minnesota

Posted by: Jane Friedmann Updated: June 3, 2013 - 10:09 AM
Timeshare resale scams in Minnesota have ripped off consumers for quite some time, but never like this.
In the past six months, the Better Business Bureau of Minnesota and North Dakota has seen 31 complaints about supposedly local businesses that have persuaded timeshare owners to hand over thousands of dollars for fees related to selling their properties. The owners invariably find themselves stuck with the timeshare and the money gone who knows where.
“We don’t really know why our area has been ground zero of late when it comes to these schemes,” said BBB spokesman Dan Hendrickson. “But I can tell you I’ve never seen a ‘blip’ like this (and I’ve been here 11 years) — at least not locally.”
Last week, the Minnesota Department of Commerce issued cease-and-desist orders to 11 companies that either solicited business from Minnesota consumers or falsely claimed they were located in the state.
While Commerce Commissioner Mike Rothman said the department “took quick and decisive action” in issuing the orders, these slippery operators may be well out of the reach of state authorities.
In April, Whistleblower reported how one of the companies, Platinum Resort Services, charged a Michigan man a $927 upfront fee but failed to provide any services.
As of Friday, the company’s website still shows a fake Minneapolis address, its e-mail address still accepts mail and an employee, Sherry, who was reached by phone but refused to give her last name, said “there will be no comment” on the state’s order.
Whereabouts unknown
The first problem regulators face is tracking down the individuals behind the scams.
Seven of the 12 timeshare businesses told to cease and desist since November claimed addresses in Minneapolis or St. Paul, two of them within six blocks of the Commerce Department.
State inspectors found by doing old-fashioned legwork — talking with security guards, postal workers and tenants — that the companies had phony addresses.
In the end, the state was unable to make contact with any of the companies.
With the exception of Platinum Resort Services, Whistleblower also had no luck, though she did talk to a shoe-store owner who had acquired one of the company’s toll-free numbers. He said he keeps getting calls from people demanding their escrow money back.
The address for Integrated Escrow Services, which bilked the Michigan owner of a Costa Rica timeshare out of $22,925, according to the state, belongs to a large Minneapolis law firm.
One phone number associated with another business, Twin Cities Property Advisors, actually rings up a Wal-Mart store in Vadnais Heights.
The registrant contact information for one website leads to a city park in Charleston, S.C.
The scammers often find potential victims by searching online for people advertising their timeshares for sale. They then conduct most of their business over the phone and tell victims to wire funds to cover fees related to the transfer of ownership.
Another problem turns out to be jurisdictional. At least 11 of the 12 companies instructed consumers to wire money to Mexico, where many of the websites are registered.
“These types of timeshare scams are most often international in scope, and therefore outside of the [Minnesota attorney general’s] jurisdiction. To the extent that criminal action would be brought against individuals, the investigation and prosecution would need to be handled by federal authorities,” according to Commerce spokeswoman Anne O’Connor.
If the companies fail to comply with the orders, “the Department can take the next step to file in [federal] court and set up contempt proceedings. If the Department can locate the individuals behind the companies, the violation could lead to a theft by swindle criminal referral.”
Staying one step ahead
There’s little incentive to keep using a name associated with a state enforcement action. The bogus timeshare businesses have no loyal customers who may lose track of the business if the name changes.
“Once the scammer has his company listed on the BBB or Internet searches as being a scam, he just names it something else and moves on,” according to Brian Rogers, owner of the online forum Timeshare Users Group.
In fact, two companies ordered by the state to cease, World Transfer Title and Concord International Title, had nearly identical websites. Minnesota, their supposed headquarters, is misspelled in several places on each. Each boasted the company had managed more than £3.3 billion in property assets, worked with more than 380 resorts and developers, and provided services to more than 810,000 consumers.
Some operators re-invent themselves as contrite associates of their former selves. “[They] will get the lists of previous victims, call [them] up and claim they are ex-employees of the company that scammed [them] and they founded a NEW company to help the victims get their money back because they felt so sick that they were ‘unintentionally’ ripping people off,” Rogers said. “They of course require another upfront fee to ‘get your money back’ and thus you are scammed again.”
Absent any real chance to deal with these companies administratively or judicially, the best solution may rest with consumers.
“Getting to owners and ensuring they never pay upfront fees will be the only way to stop it,” Rogers said. “There aren’t any legitimate businesses in the timeshare industry that charge an upfront fee.”

Timeshare resellers exposed as scams by state; ordered to stop

Posted by: Jane Friedmann Updated: May 30, 2013 - 3:42 PM

Almost a dozen companies that falsely claimed they could sell or rent out consumers' timeshare properties were ordered to stop doing business in Minnesota, the Minnesota Department of Commerce announced Wednesday.

"These sham companies are preying on people desperate to sell their timeshares with the intent to scam and defraud them out of thousands of dollars," said Commerce Commissioner Mike Rothman

In April, Whistleblower wrote about one of the companies, Platinum Resort Services, which claimed to be headquartered in downtown Minneapolis and had a phone number with a 612 area code. One of its listed addresses doesn't exist and the other is occupied by a different business. More than one consumer paid the company to either rent out or sell their property, but received no assistance in return.

All of the 11 companies named by the department used fake street addresses. One company went so far as to forge a Minnesota business registration and real estate license.

Last year, the department took action against Renaissance Marketing, which provided customers with a forged Minnesota real estate appraiser license.

The company offered to sell timeshares for a 10 percent fee and seven percent commission. The company claimed it already had buyers for the properties and the buyers were willing to pay an inflated price. Once the owner signed a contract the company threatened to prosecute the owner if he or she didn't immediately pay the fees. The company's website claimed it was "one of the largest Saint Paul property management company [sic] managing individual units through Saint Paul."

Other companies named by the department are Integrated Escrow Services, ABS Consulting Company, World Transfer Title, Premium Properties Management, Net Management Group, Concord International Title, Continental Property Solutions, Twin Cities Property Advisors, and World Event Management.

The department said all the companies operated in a manner similar to Global Properties Specialists.

If approached by someone offering to sell your property for you or rent it out, the state offers this advice. Verify that the company has a Minnesota real estate license. Research the company online. Beware of high pressure sales tactics and upfront fees.



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