Florida Attorney General Pam Bondi has filed a lawsuit against a company she accuses of violating Florida's Timeshare Resale Accountability Act.
Florida has a specific law covering timeshare resales because it has so many of the properties, whose owners are often desperate to unload them.
In this latest case, Bondi sued Prime Resorts International, based in central Florida. She accuses the company of making telephone calls to timeshare owners all over the country, telling them they have a buyer for their timeshare. She says the company also claimed to be able to guarantee the deal would close.
Bondi says the company then collected upfront fees that ranged as low as $595 and high as $4,000. Her suit alleges there were no buyers.
The attorney general opened her investigation after she said her office got more than 85 complaints, claiming to have lost more than $110,000. The suit seeks a permanent injunction against the company, consumer restitution, and a civil penalty of $10,000 per violation.
Thousands of timeshare owners were victimized in the aftermath of the financial crisis, when many owners were out of work and unable to make payments. Both state attorneys general and federal regulators began to crack down on abusive timeshare resale practices.
Signs of a scam
Lisa Lake, a consumer education specialist at the Federal Trade Commission (FTC), says timeshare owners getting an unsolicited pitch from someone who says he or she has a buyer lined up should listen carefully for tell-tale signs of a scam.
Writing on the FTC website, Lake says if the broker promises a lot of money but requires payment of an upfront fee, you can be sure it's a scam. In fact, she says timeshare owners should be skeptical of any offers to help sell it.
In particular, Lake says look out for claims that the timeshare market in your area is “hot” and that they are “overwhelmed” with buyer requests. The timeshare market is almost never “hot,” which is why it takes a high-pressure sales job to move them.
Look out for claims that a buyer has already been lined up, or that the company can guarantee a sale within a specified time. Reputable real estate agents never make those kinds of claims.
Where's the contract?
Scammers rarely provide a sales contract that spells out the terms of the deal. Ever listed a piece of real estate without a contract?
Finally, the biggest red flag of all is the requirement that you pay an upfront fee. You can be sure there is no buyer, the guarantee is worthless, you'll still be stuck with the timeshare, and you'll be out whatever you paid the scammer.
If you have been thinking about purchasing a timeshare, the problems people have selling them – and their exposure to these types of schemes – might serve as a cautionary tale.
Here's what the FTC says you should consider before taking the plunge.