A federal court has put a stop to a telemarketing
operation that allegedly scammed millions of dollars from property owners hoping
to sell their timeshares.
The Federal Trade Commission (FTC) claimed 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. The victims found it 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.
Timeshare owners under pressure
The case is part of an 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.
Money upfront
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.
Misleading claims
The FTC maintains 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. 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.
In filing the complaint, the FTC is seeking a permanent halt to the defendants' allegedly illegal conduct and to provide money back to consumers who were harmed by their violations of the FTC Act and Telemarketing Sales Rule.
