If you're trying to sell a timeshare, being asked to pay money up front should raise red flags. Don't do it - ever.
Back in March of 2010, we did a story about how easy timeshares are to buy, and how difficult they are to sell: See Buying or Selling a Timeshare? Read This First. That story is summarized by this one sentence:
“Never pay an up-front fee in an effort to sell your timeshare!”
At the Federal Trade Commission’s request, a federal district court has put a stop to a deceptive telemarketing operation that allegedly scammed millions of dollars from property owners hoping to sell their timeshares. The FTC charged that the ring, operating out of South Florida, conned consumers by promising that they had buyers lined up and waiting. Only after making a hefty up-front payment did the consumers learn that there were no buyers, and that it was nearly impossible to get their money back from the defendants, many of whom have long criminal histories.
“When cash-strapped consumers are trying to sell their property, the last thing they need is to lose thousands of dollars to scam artists who promise a quick sale, but then provide no services at all,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection.
The case is part of an ongoing FTC effort to crack down on con artists who use fraud and deception to take advantage of consumers hit hard by the recent economic downturn. Many of the defrauded consumers needed to sell their timeshares to help pay their living expenses. According to the FTC, the number of complaints related to fraudulent timeshare resales has more than tripled over the past three years, as more consumers have attempted to sell their timeshares.
In this case, the defendants allegedly defrauded consumers nationwide out of millions of dollars before being shuttered by the court. They also are well known to the South Florida Better Business Bureau (BBB) which, together with the FTC and the Florida Attorney General’s Office, has received hundreds of complaints from consumers about their conduct. The BBB has given the firm, Timeshare Mega Media and Marketing Group, an F rating, the lowest rating it can give a business.
According to the FTC’s complaint, Timeshare Mega Media, two related companies, and six individuals used a telemarketing boiler room in Ft. Lauderdale, Florida. They told timeshare owners who were attempting to sell their units that a buyer was lined up and a deal had been negotiated on their behalf, but that before the sale could be completed, consumers would have to pay an up-front fee, usually $1,996, by credit card.
The FTC’s complaint charges that Timeshare Mega Media’s representatives typically claimed the fee was for sale-related costs, such as realtor fees, closing costs, title searches, or document processing. They also told consumers that this fee would be refunded at closing. In some cases, if a consumer owned an expensive timeshare, the fee could be more than $1,996, ranging up to 10 percent of the asking price. Consumers also were told that their timeshare sales would close quickly, often in as few as 30 days.
The FTC alleges that, after the consumers paid the fee, they were told to expect a contract from Timeshare Mega Media. What they received turned out to be a contract to market and advertise their timeshare, and not a sales contract. According to the FTC’s complaint, many consumers signed and returned the contract thinking it was a sales contract. Those who questioned its validity were given the run-around by the company and falsely told that a sales contract would follow. In fact, according to the agency, the company never had any timeshare buyers lined up. When consumers discovered this and demanded their money back, they found it nearly impossible to get a refund, or even get a call back.
The FTC’s complaint was filed against Timeshare Mega Media and Marketing Group, Inc., also doing business as (d/b/a) Timeshare Market Pro, Inc.; Timeshare Market Pro, Inc.; Tapia Consulting, Inc.; Joseph Crapella, also known as Joseph John Philbin; Pasquale Pappalardo; Lisa Tumminia Pappalardo; Pasqualino Agovino; Louis Tobias Duany; and Patricia A. Walker.
The lesson here is clear: Don’t pay money up front to list your timeshare – and recognize that selling it for any amount at all could be tough if you owe money on it. For those looking to buy a timeshare, you’re going to find a much better deal on a pre-owned one than you will by purchasing one new from a developer.
If you really need to get out of a timeshare – or you really want to get into one, we list several legitimate sites to do either in our March story on timeshares. Check it out!