Feds Crack Down on Rising Timeshare Fraud in the U.S., Florida

Officials throughout the United States say the number of lawsuits filed for timeshare resale frauds has climbed drastically, with the bulk of the scams occurring in Florida.

According to a June 6 [article published on Bloomberg.com, nearly 200 civil and criminal cases have been filed in the past two years spanning nearly every state in the country. After a two-year on-going investigation, Florida prosecutors sued nine different timeshare resale companies this year alone for fraudulent activity that cost victims millions.

Some officials are worried that these scams, many of which are now being executed by past felons with violent and drug-related criminal records, may not be able to be contained to just vacationers and retirees in the Sunshine State.

“The majority of folks who have been doing this are from Florida and are victimizing people from outside states,” Miami U.S. Attorney Wilfredo Ferrer said at a press conference last week. “The white collar nature of these scams seems to be a thing of the past.”

According to Ferrer, his Miami office alone filed 18 separate criminal suits against 69 defendants. Forty-one of those cases, Ferrer added, were filed against a now non-existent telemarketing group in Broward County, which scammed more than 2,000 people out of $5 million.

“They use very aggressive, high-pressure tactics to defraud people out of their money,” Ferrer stated.

A typical scam, according to Florida Attorney General Pam Bondi, starts with a phone call out of the blue to a timeshare owner looking to sell. The caller will inform the seller that a buyer has been found. In many cases, Bondi said, this “buyer” will offer more money than the owner is asking. To seal the deal, she continued, the scammer asks the property owner to send some cash up front, money that they will never see again. 

“They claim sales are about to happen,” Bondi said at the same press conference, “but there are no buyers, and consumers lose hundreds of thousands of dollars.”

Having recognized the state-wide problem was quickly turning into a national issue, the Florida legislature passed the Timeshare Resale Accountability Act in 2012 requiring timeshare resellers to disclose very specific information to potential customers before providing any services. Additionally, the Act forbids timeshare resellers from taking advanced fees.

According to Federal Trade Commission (FTC) reports, hotline complaints about timeshare fraud targeting sellers tripled between 2010 and 2011, with more than 6,000 owners calling to report an issue. That number dropped substantially in 2012 to roughly 4,600 complaints, thanks in part to a combined effort between law enforcement agencies and the FTC.

“Our message to timeshare owners is simple,” Charles Harwood, acting director of the FTC Bureau of Consumer Protection said in a statement to the Associated Press. “Never pay for a promise, get everything in writing first and pay only after your unit is sold.”

Harwood also passed along a stern warning from the FTC to potential scammers who may be looking to rip off timeshare owners.

“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.”