More than 190 criminal and civil actions have been brought across the country over the past two years to combat the rising problem of timeshare retail fraud involving shady telemarketing operations, federal and state officials said Thursday.
Complaints about timeshare fraud targeting sellers tripled from 2010 to 2011, when more than 6,000 people called a hotline about the problem, the Federal Trade Commission said. Last year, there were fewer complaints – about 4,600 – as the FTC and various law enforcement agencies ramped up efforts to stop the fraud, said Charles Harwood, acting director of the FTC Bureau of Consumer Protection.
“Our message to timeshare owners is simple: Never pay for a promise, get everything in writing first, and pay only after your unit is sold,” Harwood said. “Our message to timeshare scammers is simple, too: Law enforcement agencies at every level of government are working together to put an end to this problem.”
Investigators have pursued fraud cases involving timeshare sellers in nearly every state in the country, but as a major vacation destination, Florida tops the list.
Miami U.S. Attorney Wifredo Ferrer said his office alone has filed 18 separate criminal cases against 69 defendants, including 41 involved with a now-defunct Broward County telemarketer, Timeshare Mega Media and Marketing Group Inc. More than 2,000 people were scammed out of $5 million in that case. Most of the defendants in that case, including the two owners, have pleaded guilty.
“They use very aggressive, high-pressure tactics to defraud people out of their money,” Ferrer said.
Typically, the fraud starts with a cold phone call to a timeshare owner looking to sell. The caller usually says a buyer has been found — often offering more money than the owner expects — and all the owner has to do is send some up-front cash to get the deal rolling. In the Broward County case, those fees ranged from just under $2,000 to $10,000, according to court documents.
The timeshare owner never sees the money again.
“They claim sales are about to happen, but there are no buyers, and consumers lose hundreds or thousands of dollars,” said Florida Attorney General Pam Bondi.
One such victim was Tracy Casaceli of Jupiter, who said her nightmare began in 2006 when she paid an $800 up-front fee to sell her timeshare, and nothing happened. Two years later, she got another offer, followed in 2011 by a telemarketer claiming to be affiliated with the FTC and assigned to sell the timeshares of the original fraudulent firm — if she’d send in $2,200 up front.
This time, Casaceli said, she filed a complaint with the FTC, and the agency was able to get a civil judgment against the firm. Her advice: “Ask detailed questions. And call the FTC.”
All told, the two-year timeshare fraud investigation has resulted in criminal charges against 184 people across the country. In addition, 83 civil actions have been brought by officials in 28 states, and 25 actions by agencies in 10 other countries.