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Consumer ADVISORY

From the Federal Trade Commission:

FTC Settlement Bans Bogus Timeshare Resellers from Timeshare Business, Telemarketing

Defendants Allegedly Did Not Help Consumers Sell Their Timeshare Properties as Promised 

A telemarketing operation that allegedly deceived consumers who were trying to sell their timeshare properties is permanently banned from the timeshare resale and rental business, and from all telemarketing, under settlements with the Federal Trade Commission. The case is part of the FTC's ongoing effort to crack down on con artists who use fraud and deception to take advantage of consumers in financial distress.

According to the FTC's complaint against Vacation Property Sellers Inc., Vacation Property Services Inc., Higher Level Marketing Inc., Frank M. Perry, Jr., David S. Taylor, and Albert M. Wilson, the defendants deceived consumers who were trying to sell their timeshare properties into paying an up-front fee ranging from $200 to more than $8,000, claiming they had buyers lined up or would find buyers for consumers' properties. When consumers realized they had been duped, the defendants allegedly ignored their phone calls and denied refund requests. The FTC charged the defendants with misrepresenting their refund policies and the existence of potential buyers, and calling consumers whose phone numbers were on the FTC's Do Not Call Registry.

In addition to the timeshare and telemarketing bans, the settlement order against Perry, Vacation Property Sellers, and Higher Level Marketing prohibits them from misrepresenting material facts about any goods or services, and selling or otherwise benefitting from consumers' personal information. The order imposes a $23.5 million judgment that was suspended when Perry and the companies surrendered almost all of their assets. The settlement order against Taylor contains the same conduct prohibitions and imposes a $3.7 million judgment, which was suspended based on his inability to pay. The full judgments will become due immediately if the defendants are found to have misrepresented their financial condition. Litigation continues against the remaining defendants, Vacation Property Services Inc. and Albert M. Wilson.

To avoid pitfalls when selling a timeshare unit, read the FTC's Selling a Timeshare Through a Reseller: Contract Caveats.

The Commission vote approving the proposed consent order against Perry, Vacation Property Sellers, and Higher Level Marketing was 5-0. The Commission vote approving the proposed consent order against Taylor was 3-1, with Commissioner Rosch voting in the negative. The orders were entered by the U.S. District Court for the Middle District of Florida, Tampa Division, on September 30, 2011, and March 20, 2012, respectively.

NOTE: This consent order is for settlement purposes only and does not constitute an admission by the defendants that the law has been violated. Consent orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter. 

Selling a Timeshare Through a Reseller: Contract Caveats

Thinking of selling your timeshare? The Federal Trade Commission (FTC), the nation’s consumer protection agency, cautions you to question resellers – real estate brokers and agents who specialize in reselling timeshares. They may be claiming that the market in your area is “hot” and that they’re overwhelmed with buyer requests. Some may even say that they have buyers ready to purchase your timeshare, or promise to sell your timeshare within a specific time.

If you want to sell your deeded timeshare, and a company approaches you offering to resell your timeshare, go into skeptic mode:

• Don’t agree to anything on the phone or online until you’ve had a chance to check out the reseller. Contact the Better Business Bureau (www.bbb.org), state Attorney General (www.naag.org), and local consumer protection agencies (www.consumeraction.gov) in the state where the reseller is located. Ask if any complaints are on file.
• Ask the salesperson for all information in writing.
• Ask if the reseller’s agents are licensed to sell real estate where your timeshare is located. If so, verify it with the state Real Estate Commission. Deal only with licensed real estate brokers and agents, and ask for references from satisfied clients.
• Ask how the reseller will advertise and promote the timeshare unit. Will you get progress reports? How often?
• Ask about fees and timing. It’s preferable to do business with a reseller that takes its fee after the timeshare is sold. If you must pay a fee in advance, ask about refunds. Get refund policies and promises in writing.
• Don’t assume you’ll recoup your purchase price for your timeshare, especially if you’ve owned it for less than five years and the location is less than well-known.

If you want an idea of the value of a timeshare that you’re interested in buying or selling, consider using a timeshare appraisal service. The appraiser should be licensed in the state where the service is located. Check with the state to see if the license is current.

Contract Caveats

Before you sign a contract with a reseller, get the details of the terms and conditions of the contract. It should include the services the reseller will perform; the fees, commissions, and other costs you must pay and when; whether you can rent or sell the timeshare on your own at the same time the reseller is trying to sell your unit; the length or term of the contract to sell your timeshare; and who is responsible for documenting and closing the sale.

If the deal isn’t what you expected or wanted, don’t sign the contract. Negotiate changes or find another reseller.

Resale Checklist

Selling a timeshare is a lot like selling any other piece of real estate. But you also should check with the resort to determine restrictions, limits, or fees that could affect your ability to resell or transfer ownership. Then, make sure that your paperwork is in order. You’ll need:

• the name, address, and phone number of the resort;
• the deed and the contract or membership agreement;
• the financing agreement, if you’re still paying for the property;
• information to identify your interest or membership;
• the exchange company affiliation;
• the amount and due date of your maintenance fee;
• the amount of real estate taxes, if billed separately.

• Selling a Timeshare Through a Reseller: Contract Caveats

  Thinking of selling your timeshare? The Federal Trade Commission (FTC), the nation’s consumer protection agency, cautions you to question resellers – real estate brokers and agents who specialize in reselling timeshares. They may be claiming that the market in your area is “hot” and that they’re overwhelmed with buyer requests. Some may even say that they have buyers ready to purchase your timeshare, or promise to sell your timeshare within a specific time.

  If you want to sell your deeded timeshare, and a company approaches you offering to resell your timeshare, go into skeptic mode:

  • Don’t agree to anything on the phone or online until you’ve had a chance to check out the reseller. Contact the Better Business Bureau (www.bbb.org), state Attorney General (www.naag.org), and local consumer protection agencies (www.consumeraction.gov) in the state where the reseller is located. Ask if any complaints are on file.
  • Ask the salesperson for all information in writing.
  • Ask if the reseller’s agents are licensed to sell real estate where your timeshare is located. If so, verify it with the state Real Estate Commission. Deal only with licensed real estate brokers and agents, and ask for references from satisfied clients.
  • Ask how the reseller will advertise and promote the timeshare unit. Will you get progress reports? How often?
  • Ask about fees and timing. It’s preferable to do business with a reseller that takes its fee after the timeshare is sold. If you must pay a fee in advance, ask about refunds. Get refund policies and promises in writing.
  • Don’t assume you’ll recoup your purchase price for your timeshare, especially if you’ve owned it for less than five years and the location is less than well-known.

  If you want an idea of the value of a timeshare that you’re interested in buying or selling, consider using a timeshare appraisal service. The appraiser should be licensed in the state where the service is located. Check with the state to see if the license is current.

  Contract Caveats

  Before you sign a contract with a reseller, get the details of the terms and conditions of the contract. It should include the services the reseller will perform; the fees, commissions, and other costs you must pay and when; whether you can rent or sell the timeshare on your own at the same time the reseller is trying to sell your unit; the length or term of the contract to sell your timeshare; and who is responsible for documenting and closing the sale.

  If the deal isn’t what you expected or wanted, don’t sign the contract. Negotiate changes or find another reseller.

  Resale Checklist

  Selling a timeshare is a lot like selling any other piece of real estate. But you also should check with the resort to determine restrictions, limits, or fees that could affect your ability to resell or transfer ownership. Then, make sure that your paperwork is in order. You’ll need:

  • the name, address, and phone number of the resort;
  • the deed and the contract or membership agreement;
  • the financing agreement, if you’re still paying for the property;
  • information to identify your interest or membership;
  • the exchange company affiliation;
  • the amount and due date of your maintenance fee;
  • the amount of real estate taxes, if billed separately.

  For More Information

  To learn more about vacation ownership, contact the American Resort Development Association. It represents the vacation ownership and resort development industries. ARDA has nearly 1,000 members, ranging from privately-held companies to major corporations, in the U.S. and overseas.

  American Resort Development Association
  1201 15th Street N.W., Suite 400
  Washington, D.C. 20005
  (202) 371-6700; Fax: (202) 289-8544
  www.arda.org

  To File a Complaint

  Timesharing is usually regulated through the Real Estate Commission in the state where the timeshare property is located. The sale of vacation plans generally is not regulated at all. However, if you believe you’ve been the victim of false or deceptive advertising or marketing of a vacation plan, contact the FTC.

  The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.  

As we work to put an end to predatory behavior in our financial markets, my Administration is taking action to empower individuals and families with the tools they need to get ahead. Last year, we collaborated with representatives from the private, public, and non-profit industries to release the National Strategy for Financial Literacy -- a comprehensive plan to improve financial education across our country. The President's Advisory Council on Financial Capability (PACFC) continues to identify and promote the most effective, data-driven strategies to better educate Americans on financial issues. With help from the PACFC, we are working to provide our young people with financial skills to become successful students, entrepreneurs, and leaders; to ensure American workers are able to provide for their loved ones and save for retirement; and to foster financial capability in families and communities across our Nation.

During National Financial Capability Month, we rededicate ourselves to advancing robust consumer education and to helping every individual take ownership of their financial future. I encourage all Americans to take advantage of the free, reliable financial resources at www.MyMoney.gov, www.ConsumerFinance.gov, and 1-888-MyMoney.

NOW, THEREFORE, I, BARACK OBAMA, President of the United States of America, by virtue of the authority vested in me by the Constitution and the laws of the United States, do hereby proclaim April 2012 as National Financial Capability Month. I call upon all Americans to observe this month with programs and activities to improve their understanding of financial principles and practices.

IN WITNESS WHEREOF, I have hereunto set my hand this second day of April, in the year of our Lord two thousand twelve, and of the Independence of the United States of America the two hundred and thirty-sixth.

BARACK OBAMA