Resale Scam Alert

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For over 7 years, Timeshare Closing Group has received calls from timeshare owners asking questions about a potential sale of their timeshare. The facts of the situations are always very similar. Typically, a cold call offer from an outfit that sounds legitimate offering to go to contract on the sale of a timeshare for a $20,000 – $50,000 sales price. Once you sign a contract, the people you are dealing with request money for upfront closing costs and they require it to be wired or sent via Western Union or a method where you don’t have fraud protection. These payment methods cannot be reversed. They will never accept payment via credit card where you could contest the transaction later. There have been periods of time where calls were frequent and other times where call volume has been scarce. The offers are always something that sounds too good to be true.

I can’t stress this enough. Please check out who you are dealing with. If you are selling a timeshare for any value and are to receive proceeds from the sale that would exceed the money they are asking you to pay, then your costs would be deducted from the gross price and you would get an net amount. (For example, a $25,000 sale, with costs to seller of $2000, would result in net proceeds of $23,000. The seller would not pay $2000 up front for closing).  You would not pay closing costs up front unless the sales price was very low (under $1000 for instance).  The phone scam isn’t new, but the callers using a name similar to this company has been frequent at times over the years. Calls to this firm went down when the warning below was inserted on this website.

Timeshare sales are real estate transactions and covered by real estate laws in the states where the property is located. A realtor or broker contacting you regarding a sale will be able to provide broker license information you can verify with the state where they are licensed. Please do your homework on anyone that contacts you with an offer to purchase your timeshare property.

Note that Timeshare Closing Group is a timeshare transfer company, most of our business comes from direct referrals from licensed real estate brokers or referrals timeshare owners with existing relationships with this firm. We do not make cold calls to customers with offers to purchase.  You may be contacted by a broker that is legitimate as sales calls are made in this industry. But verifying their information would be easy as they will be more than happy to provide referrals. If you are selling a timeshare and there is real value in the sales price, you won’t be asked to come out of pocket to pay closing costs in advance of closing.  If you think a purchase offer is “too good to be true,” it probably is. Always feel free to contact us directly with any questions or concerns.

 

consumer-warning

Verify Parties to a Sales Transaction

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There are honest, reputable brokers making contact with buyers and sellers everyday to put deals together on a sale of a timeshare property. Unfortunately there are some fraudulent outfits contacting sellers with offers to purchase that normally sound to good to be true. If someone has contacted you regarding a potential sale and indicated that they work with Timeshare Closing Group for the closing, please take this opportunity to investigate the transaction if you have any questions.   Timeshare Closing Group has worked hard to establish a reputation for credibility through fair and honest dealings.  We have over 20 years of experience in the legal aspects of the timeshare closing industry, both at the resort level and privately. We deal directly with reputable real estate brokers that work exclusively in the timeshare resale markets. All parties to a legitimate transaction will be more than happy to provide vetting information, industry and customer referrals.

If you have any doubt as to the sincerity of anyone contacting you to transact on a timeshare property or claiming to be associated with Timeshare Closing Group, please go to our “CONTACT US” page and submit information for verification either through the web link or by phone.  We will respond directly verifying whether or not the party you listed does, in fact, have a relationship with Timeshare Closing Group as a legitimate real estate broker.

Timeshare Transfer Options

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The Timeshare Industry is constantly on the watch for deceptive and unethical business practice.  Seemingly every ethical pocket of the industry that provides honest assistance to owners, often becomes the focal point of unethical or deceptive companies looking to take advantage of customers.  Unethical companies often mimicking the successful business plan of legitimate companies, while preying on the customers through unethical solicitation and pressuring them into bad decision.  A trend developing involves resale and transfers on the secondary market.  As I’ve covered in this blog before, the timeshare resale industry has exploded in recent years, mainly because most resort developers do not offer a resale or rental program, and a large volume of timeshare in the United States is owned by an aging portion of the population no longer interested in traveling as they have in the past.

Legitimate transfer options exist for owner who no longer wish to continue to travel.  Transfer companies often charge a fee to transfer the timeshare from the owner, divesting the owner of all legal responsibility of future obligation in regards to ownership, maintenance fees, and exchange companies.  Transfer companies provide expertise in areas where an owner may be unfamiliar, that experience often comes from years of working within the resort companies and/or from years of working in the resale industry.   There is no list that will tell you whether the company you are dealing with has an established credible track record, but there are guidelines you can follow to assure that you won’t be the target of a scam.

Transfer Guidelines:

If you find that you can no longer use your timeshare, check first with your resort developer or homeowners association to see if they offer a resale or transfer program, or are affiliated with a licensed real estate broker to handle resales. In addition, some non-profit organizations accept timeshares as a donation. Before transferring your product, make sure you research the organization and understand the process.  If you are solicited by a company offering to “take your timeshare off your hands,” be extremely cautious, especially if they make it sound as though they will pay you for your timeshare.

Top Questions to Ask a Timeshare Transfer Company:

1. Ask what you must pay in order to transfer the timeshare to the company and how they will accomplish the transfer.

2. Ask if they will require you to sign a “power of attorney” and, if so, ask them to send you a copy so you can have your attorney review it before you sign it.

3. Ask if the company will notify your resort and exchange company of the transfer and will provide proof of these notifications.

4. Ask how soon your timeshare will be legally transferred, i.e. now, in 30 days, 90 days, etc.

5. Ask who will be responsible for paying your costs of ownership (maintenance fees, taxes, etc.) while the transfer is pending.

6. Get all of the answers to your questions in writing before you pay any money, and have a knowledgeable friend or professional advisor review the information with you.

7. Ask for the names and phone numbers of other timeshare owners who have used the company’s transfer services so you can call and ask about their experience.

8. Finally, do not succumb to pressure. If this is a legitimate company offering a reputable service, they should encourage you to take the necessary time to research the company and make an informed decision. If you are being pressured to do this now, walk away.

Selling a Timeshare? Florida Might Have Your Back

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They sing a popular song in the south that goes…  In Birmingham, they love the governor…, timeshare owners looking to sell their unit should just substitute Tallahassee.  Specifically they should love the Governor of Florida, Rick Scott.  Earlier this month, Florida’s new Timeshare Resale Accountability Act went into effect.  The law specifically regulates sales in Florida and while it doesn’t cover every possible scam, it’s a good start for sellers looking for protection.  The law went into effect on July 1 and offers some important protection for timeshare resales by providing penalties for resellers that:

  • Misrepresent that some buyer has an interest in buying a timeshare resale
  • Collect payments from sellers before the seller signs a written agreement to the terms of the resale
  • Does not honor a seller’s cancellation request made within seven days of a signed agreement or fail to provide a refund within 20 days of cancellation.

 

Consumer advocates, including this blog, have been warning about scams and giving advice to the pitfalls of choosing a resale broker.  Florida now provides protection from the most common misrepresentations sellers face when looking to sell a timeshare.

The second two provisions are details that have governed the resort sales center for decades in most jurisdictions.  But the first provision is the one that is most important to the resale market.  Scam agencies know that creating urgency is the quickest way to get the seller to pay fees in advance of a written contract.  Nothing says urgent more than we have a buyer waiting.  The timeshare resale market is a thriving, and important part, of the resort timeshare sales industry.  But note that Sellers still outnumber buyers in the market, which means quite simply, a good broker will be outlining a more realistic sales timeframe.  Anyone saying they have a buyer waiting is likely lying, but at least those liars are now regulated in Florida.

The Act fails in my opinion to completely rein in scam agencies because it fails to eliminate upfront fees; it simply requires that the fee come after the signing of a contract.  So while there is some protection that Florida is providing, it could have gone further in my opinion.  This is why my advice in previous blog articles is still relevant.

  • Don’t deal with a broker demanding an upfront fee from the seller.
  • Do your homework, and
  • Do your homework.

While this is a Florida law and applies to only Florida, it is a good start as we now have a major jurisdiction recognizing and being proactive to protect resale consumers.  Hopefully we will see similar legislation make its way into other popular timeshare states, such as California, Hawaii, South Carolina, and Arizona.  Some of the good and well respected resellers are solidly behind the new Florida law, such as Concierge Realty, FiveStar Timeshare Realty, and Timeshare Broker Sales as the new law puts into place practices they have been following for years.

The fact is if you want to sell your timeshare you must be pay attention to the process and choose to deal with respected brokers.  The new Florida law allows you to proceed knowing the government is at least trying to cover your back.

Consumer Warning

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Recently in New Jersey, nine people were arrested for their alleged roles in a $2.4 million mail fraud conspiracy involving time share mortgages. You can review the entire Department of Justice press release to the right.

The mail fraud arrests actually total 16 people, as seven others outside of New Jersey were also charged in the conspiracy and will have initial court appearances in Florida, South Carolina, Virginia, and the U.S. Virgin Islands before coming to New Jersey to answer the charges in Complaints.

The complaint details an elaborate plan to defraud desperate victims who were seeking relief from existing timeshare mortgages in a down economy. Those charged in the complaint are alleged to have promised assistance by offering to pay off the existing mortgage amount at a reduced rate. Victims would pay a small fee for this assistance only to find the mortgage was not paid off and often times the transaction resulted in the victims actually purchasing an additional time share ownership week.

The Department of Justice investigation conducted 225 interviews with potential victims and the fraud total is thought to exceed 2.4 million dollars.

The Timeshare Closing Group has one simple piece of advice for anyone entering into contracts to purchase, sale, or rent of the timeshare unit:
Read and Understand what you are signing before you sign your name, and if the company you are doing business with pressures you or suggest that you do not seek independent advice – Walk away.