Back in 2009, a new type of scam popped up on the timeshare resale scene: The owner receives a call out of the blue from a stranger claiming their timeshare “is already sold” and then asks for several thousand dollars to complete the transaction. Of course, there is no buyer and the scammers disappear along with the money. I imagine that, when this hustle was still fairly fresh, it might have been believable to some owners desperate to sell after the recession.
On this blog, we warned timeshare owners of this “already sold” scam back in February of 2010. Elsewhere, throughout both the timeshare industry and mainstream media, similar warnings were issued around the same time. Yet, despite countless warnings – not to mention the obviously dubious story – timeshare owners continue to fall for this stupid trick. It’s almost enough to give you sympathy for the devil.
Okay, so maybe not sympathy exactly… But I have to state the obvious here: If you are willing to wire $3,000 to Mexico because someone called you on the phone with a catchy story, you are going to get just what you deserve. I have to wonder how someone that dumb would come into possession of $3,000 to begin with? My guess would be inheritance or personal injury settlement.
Last year, my 88 year old Grandfather received a call from Mexico: The caller told him that his grandson (he only has one, so he assumed they meant me) had been injured, arrested in Mexico, and needed $1,500 for bail ASAP. This call clearly put him into a panic, and my Grandfather was willing to pay to save me from a terrible Mexican prison – but he is not a complete idiot. After telling the caller that he’d need time to get the money together and needed to arrange a call-back, he hung up the phone and called my home number. My wife answered and assured him that I was at work here in Atlanta, not in a Mexican prison. My Grandfather kept his emotions in check – and kept his money. (Despite being particularly vulnerable due to early-stage Alzheimer’s.)
Yet, when timeshare owners wire money to someone they don’t know because they believe a fairly tale about their timeshare being sold, it’s the legitimate timeshare resale industry that gets the blame: More onerous regulations are passed and imposed upon law-abiding companies, more articles are written about “timeshare scams” that draw no distinction between the real and fake timeshare resale industry, and more consumers simply detest all timeshare resale companies because of being “burned.”
I say enough already! If someone gets tricked into wiring their money to a timeshare scam it is not my fault, it is not my company’s fault, and it is not the fault of the timeshare industry at large. If you have paid thousands of dollars because you thought your timeshare was already sold, you my friend have poor judgement at best – at worst, you are an idiot and your money probably ought to be in someone Else’s hands anyway.
This may sound harsh, it certainly is not politically-correct, but it’s true. We should not regulate every single aspect of our great country because of the stupid few, or we’ll just get more of this:
August 15th, 2013
By now, it’s common knowledge that timeshare resale scams have exploded over the last couple years. Most often these cons tend to take the form of a fake timeshare resale company promising the timeshare owner there’s a buyer lined for their timeshare, the only requirement is the owner pay thousands upfront in order to close the deal. Of course, these ‘deals’ never materialize, and frequently the company has vanished by the time the owner realizes the gig is up. Under existing federal and state laws these ‘buyer waiting’ timeshare scams involve the commission of multiple felonies, including but not limited to mail fraud, wire fraud, and racketeering. Prison sentences for these serious crimes can be up to 15 years or more – on par with bank robbery!
According to the ‘official’ story, previously law-abiding individuals, working in the timeshare resale industry, suddenly turned to a life of crime – committing multiple felonies without remorse, or fear of incarceration. You’re expected to believe that after 20 years of existing in relative anonymity, timeshare resale became the country’s #1 scam almost overnight. The FTC received just 819 complaints concerning timeshares resales in 2009, but more than 5,000 in 2011. During the same period, complaints in Florida went up over 1,000%. What happened? How did an entire industry manage to simultaneously collapse into fraud and corruption? … What brought down building 7? Who is John Gault?
Americans do not, as a rule, commit multiple felonies unless they are already criminals. Certainly, they do not choose to do so en masse. The timeshare resale industry did not suddenly turn to crime, and criminals did not ‘hide out’ in the timeshare industry for 20 years waiting for the perfect moment. To understand what has happened to our industry, we must start with the very nature of the beast:
Timeshare developers sold a record $10.6 billion of timeshare in 2007. Since then, largely due to tight credit markets, sales have hovered around $6 billion annually. It costs developers around $7,000 in marketing to sell one timeshare (or 35% of the average $20,000 sale price.) Buyers of timeshares in the U.S. have a cooling-off period, during which their purchase can be cancelled with no penalty. Should a timeshare purchaser happen to visit the internet during this window, he or she would likely find a resale being advertised at the same resort for thousands less. It is in this fashion that timeshare resale companies cause costly cancellations for timeshare developers. At a time when revenues were already down substantially, timeshare resales were the problem for which timeshare developers needed a solution. To accomplish this feat, a tried-and-true method has been used: create a problem, cause a reaction, and offer the solution.
Step One – Problem
Just 6% of Americans own a timeshare, and of these just 8% are motivated to sell their timeshares – that means the entire timeshare resale market affects less than 1% of all Americans. (A niche within a niche, if you will.) Given the small size of the industry, it would seem unlikely that major crime syndicates would be interested in infiltrating it. Yet, somehow, this is exactly what happened: In July 2010, the FBI raided Timeshare Mega Media – a company with (alleged) ties to the Gambino family and La Cosa Nostra, that stole over $5 million from desperate timeshare owners in less than 1 year. An FTC attorney has suggested Timeshare Mega Media never sold a single timeshare.
According to a Tampa Bay Times investigation, the State of Florida neglected to perform required background checks, giving convicted felons telemarketing licenses needed to work in shady fly-by-night outfits. In one instance, half of the 22 employees of now-defunct ‘Ace Timeshare’ were convicted felons, whose criminal records took up over 103 pages of the company’s telemarketing license application – which was, of course, approved. (By April of this year, timeshare developers had already contributed nearly $1 million in campaign donations to Florida lawmakers.)
With these fake timeshare resale companies in place, staffed with convicted felons and with ties to organized crime, step one was complete.
Step Two – Reaction
If there’s one thing Baby Boomers are good at, it’s reacting. Years of knee-jerk ‘there should be a law against that’ reactions have buried the country under tens of thousands of needless laws and regulations. Once the criminals went to work, emptying the bank accounts of hapless timeshare owners while posing as resale companies, the reaction came fast and furious: The Sun Sentinel denounced the entire industry as “fraud-riddled.” A CBS news story, quoting a victim, claimed “there’s [not] an honest person involved in this.” Florida’s Attorney General announced a state-wide initiative “actively pursuing timeshare resellers.” USA Today reported on the plight of fed-up timeshare owners, describing selling a timeshare as “a scam on top of a scam on top of a scam.” Internet posts about timeshare resale scams appeared in record number, with over 200,000 results now appearing on Google for “Time Share Resale Scam.” Something clearly had to be done!
Step Three – Solution
With the timeshare resale industry’s credibility largely destroyed, and an agitated public demanding justice, the time had come to roll-out the solution: Timeshare developers, acting through their lobbying arm ARDA, introduced Florida H.B. 1001, otherwise known as the “Timeshare Resale Accountability Act.” Intended to be a model for legislation nationwide according to ARDA, the act sets up a byzantine maze of new regulations on timeshare resales. From general prohibitions purported to reduce fraud, down to minutia concerning font size and payment methods, H.B. 1001 will regulate all aspects of timeshare resale companies operating in Florida. The Timeshare Resale Accountability Act was quickly passed through Florida’s legislature by a rare unanimous vote, and, despite running on a platform of deregulation, Florida Governor Rick Scott signed the bill into law on June 22, 2012. (Resort Developer representatives attended the ceremonial signing.)
What could be wrong with this new law, you might ask; it does protect consumers, right? Well, not exactly. Violating any of the Timeshare Resale Accountability Act provisions is punishable by a penalty of up to $15,000 per occurrence. The criminal gangs of convicted felons, who have not let the threat of 15 years in federal prison deter them from defrauding timeshare owners, are sure to be stopped in their tracks by a fine!?! No. The only timeshare resale companies affected by the new law are those that are actually real and law-abiding.
The true target of this ‘Solution’ is clearly not the criminals. If you are a timeshare owner, the target of the law is you. The crushing burden of compliance with H.B. 1001 has already bankrupted several Florida timeshare resale companies; leaving thousands of timeshare owners who paid legitimate companies to sell their timeshare with nothing. I would be surprised if there are any resale companies left in Florida by the end of the year. If ARDA succeeds in pushing its ‘Solution’ nationwide, the timeshare resale industry will eventually disappear. While this would solve the developers’ problem of losing sales to the resale market, it would also make being a timeshare owner a permanent condition.
Timeshare Owners, please WAKE UP
The reason why we continue to see the Problem/Reaction/Solution scenario played out again and again is that it continues to work again and again. When timeshare owners, and Americans in general, stop being so reactionary and begin to evaluate a problem using critical thinking skills, the truth will become readily apparent. The collusion of resort developers (ARDA) and their bought-and-paid-for lawmakers is revealed as fascism. The real timeshare resale industry is, and has always been, committed to helping timeshare owners achieve their goal of selling timeshare.
August 10th, 2012
During the last week, timeshare resale related stories have appeared in the news twice – which is actually a lot for a niche industry! Additionally, both stories relate to previous posts here at Helptimeshare.com:
Back in May, I pointed out the threat posed to timeshare owners by timeshare recovery companies. Yesterday this issue was highlighted in an article by Diane Lade of the Sun Sentinel. In it, she states that the “Florida Attorney General has received more than 600 complaints in the past 12 months” regarding recovery companies. While it’s great to see these fraudulent entities receiving some attention from the media and regulators, I have to wonder how many thousands of timeshare owners have been victimized in the four months since I originally reported on the problem. Lade goes on to point out that some timeshare resale companies have “closed down but then reopened as a timeshare recovery business” – an astute observation echoing my post describing a recovery company as “a failed timeshare resale company.”
According to Lade, Florida Department of Agriculture and Consumers Services regulators are hard-at-work investigating “about 20 timeshare recovery businesses.” Hopefully, these efforts will protect timeshare owners from being conned out of their hard-earned money. …and Kudos to Lade and the Sun Sentinel for calling attention to this phenomenon!
On September 3rd, an article by Jon Burnstein (also of the Sun Sentinel), provided some follow-up information on the ongoing timeshare fraud saga of Timeshare Mega Media. In what the FTC has called a “naked fraud,” Timeshare Mega Media contacted timeshare owners claiming “we have a buyer for your timeshare.” According to Burnstein, the operation collected an “estimated $5 million in less than a year,” before closing their doors in May 2010. Not to sound like a broken record, but HelpTimeshare.com reported on the “It’s Already Sold” scam back in February of 2010. Apparently, our warning went unheeded by some 10,000+ consumers in Florida alone… More to the point of why I consider this a ‘bad’ story, Burnstein repeatedly refers to Timeshare Mega Media as a “timeshare resale company.” He goes on to refer to the timeshare resale industry as “fraud-riddled,” and states that “many of the unscrupulous resale companies operate the same way.” I suggest that, for anyone in the media, using this sort of language is, at best, irresponsible: Timeshare Mega Media was clearly anything but a timeshare resale company. According to Burnstein’s own article the company was no more than a criminal front, operated not by timeshare industry professionals but by felons and associates of major crime families.
Please, call them “fake” timeshare resale companies or something, but a distinction needs to be drawn by the media between criminals and timeshare resale companies. There is nothing to suggest Timeshare Mega Media, or its affiliates, had any connection whatsoever to the actual timeshare resale industry. No one in the press refers to the Swiss Watch Industry as “fraud-riddled,” though fake Rolex watches are still a-dime-a-dozen throughout the U.S.
September 7th, 2011