Timeshare News and Scams

If you are a timeshare owner and happen to get a call from a telemarketer promising cash in exchange for your “bonus weeks,” Arizona Attorney General Mark Brnovich suggests hanging up.

Brnovich has filed a consumer fraud lawsuit against Condosmart LLC, an Arizona-based timeshare resale and rental advertising business. The suit accuses the company of making hundreds of unsolicited telemarketing calls to consumers who owned timeshare properties all over the U.S. 

According to Brnovich's records, consumers in Arizona, Arkansas, California, Florida, Georgia, Nevada, New Jersey, New York, Pennsylvania, and South Carolina may have paid Condosmart thousands of dollars for services that were not provided.

The suit claims Condosmart, which also does business as CS Marketing, CSR Financial, and Condosmart Marketing, engaged in deceptive and misleading business practices as it targeted consumers who owned timeshare properties.

“Routine misrepresentation”

Brnovich says the company's telemarketers were armed with a lot of information about the condo owners, including their name and where the property is located. He says that during sales calls, the telemarketers would routinely misrepresent that the owners had bonus, or extra, weeks that were available for sale to third parties.

For example, in some cases Brnovich says timeshare owners were told well-known Fortune 500 companies wanted to rent their extra timeshare weeks for large events like automobile races, trade shows, and sporting events.

The catch, says Brnovich, is the condo owner would be required to pony up anywhere from $995 to $1995 to market his or her “bonus” weeks.

The suit claims the company has violated the Arizona Telemarketing Solicitations Act by failing to file a verified registration before soliciting consumers and by failing to maintain a surety bond, as required by Arizona law.

Florida crackdown

In states where there tend to be a lot of timeshare properties – like Florida – state officials spend a lot of time prosecuting alleged timeshare fraud. Florida Attorney General Pam Bondi says her office is constantly investigating telemarketers that push their services on timeshare owners trying to get out from under their obligation, either by selling or renting their time.

Florida passed sweeping consumer protection legislation in 2011 that, among other things, prohibits a timeshare resale advertiser from providing brokerage or direct sale services, or misleading a consumer as to the advertiser’s sales success rate.

Bondi says timeshare owners should always be wary of any marketer who calls out of the blue, expressing the opinion that the consumer's property is in a “hot” area and in demand. Unless it's a South Beach property for the week between Christmas and New Years, it probably isn't.

Bond has other tips for avoiding timeshare resale scams here.

Consumers can be victims of scams any time but are often especially vulnerable when they go on vacation. The reason is simple: Vacationers are usually in a happy, relaxed mood and may be less wary to a con. They usually are carrying more cash than usual.

So it's no mystery why scammers show up in popular vacation spots, where there are thousands of relaxed, well-financed potential victims. As bank robber Willie Sutton is reputed to have said, “That's where the money is.”

Pickpockets

The most aggressive form of scam is the pickpocket. The operator, or an accomplice, distracts your attention as he or she deftly lifts your wallet.

This scam takes some skill and carries a good bit of risk. However, you are more likely to encounter it where there are large crowds and a lot of noise and confusion.

You can guard against it by keeping your money and valuables in a secure pocket, preferably one with a button flap.

Shady businesses

A more subtle form of scammary is to simply overcharge you for a purchase. It can happen when a business tacks on fees, doesn't charge the right amount for a service, or even gives you back the wrong change.

The best way to guard against these scams is to know exactly what you are buying and what it costs. Make sure you get a receipt for each transaction and count your change, don't just rely on the cashier's accuracy.

High-pressure pitches

If you are visiting a popular resort area, chances are good you will encounter a high-pressure pitch to purchase a timeshare. These come-ons usually start with a guy on the street handing out “free” tickets to some event. The catch – you have to sit through a sales presentation.

Not all timeshares are scams, of course, but high-pressure sales tactics are when the salesman uses deception and trickery to close the deal. Florida Attorney General Pam Bondi, who deals with lots of timeshare complaints, says scams are prevalent on the purchase transaction as well as the resale.

Her advice? Watch out for the “you must act now” close. She says consumers always have the right to leave the sales office and come back later. Read your contract to determine what cancellation rights you have after you have signed the papers.

And before buying a timeshare, by all means consider whether you will want to return to the same vacation spot each year. Once you buy a timeshare, Bondi says you may not be able to sell it due to a depressed resale market.

Getting you coming and going

And if you get scammed into buying a timeshare you really don't want, chances are good you could be victimized again by a scammer promising he can sell it for you – for an upfront fee.

The Florida Attorney General's Office sued nine Florida-based timeshare resale companies in the first half of 2013 for fraudulent activity and filed motions requesting temporary restraining orders against six of those companies.

To avoid falling victim to vacation scams, try to carry little cash and instead, use a credit card for most purchases. Know where your wallet is at all times. And run when a smooth-talking guy on the street offers you free tickets or a prize.

Have you ever had an unctuous salesperson offer you some wonderful freebie — free luxury-restaurant dinners, free show or concert tickets, free stay in a vacation resort hotel — provided you agree to spend an hour or two attending a vaguely described “sales presentation?” If so, then watch out: chances are someone’s about to try selling you a timeshare.

In just the past month we’ve had readers from all over the world complain about what they say are deceptive or high-pressure timeshare-sale tactics from Wyndham Vacation Resorts, but before sharing their stories, we want to remind you of three things you should remember while dealing with all salespeople, not just timeshare peddlers:

One: Don’t trust anyone who offers you something valuable in exchange for listening to a sales pitch. If what they’re selling were really such a good deal, they wouldn’t need to bribe potential customers into hearing about it.

Two: Never trust a salesperson who tries making you feel hurried or uncomfortable. “We’re offering a stunningly awesome deal, but only if you buy right now! This instant! No, you can’t take time to think about it! You can’t sleep on it tonight and make your decision tomorrow! You must sign a contract now now now right now!” 

Three: Never buy anything from a salesman who tries guilt-tripping you into a purchase. “I desperately need you to buy this, ’cause if you don’t I’ll lose my job and my children will be homeless and we’ll all starve!”

So as you read the reviews we collected about Wyndham Vacation Rentals this September, keep these three rules in mind — and notice how every single anecdote features a salesman breaking at least one of them.

Approached in a mall

Jana S. from Whangaparaoa, New Zealand, doesn’t even own a Wyndham timeshare, but still wrote us on Sept. 30 to say, “I am getting very sick and tired of these people … We were approached in a mall, asked if we would like to take part in a little competition and win a holiday, cash or TV.”

So they did, and they won! What amazing good luck, right? They took their valuable prize and went home?

Of course not. “When we won we were told we had to attend a 90-minute sales presentation. I pointed at the kids and said only one can go, but the lady was adamant that there was kids' entertainment and we had to attend both to redeem the prize. We agreed that it is 90 minutes of our holiday (and were set on not buying anything), but hey, we would get a free holiday in return.”

Or so they thought. Next morning, they went to the sales presentation. “It was a pokey little office and the kid’s entertainment was a TV and some colouring-in sheets. We had to wait for another couple and then the presentation started. It took about 45 min and the two of us just looked at each other and we knew there would be no sales agreement. Anyway, after the initial presentation, we were placed with a sales rep and he started to fill out a questionnaire. Then he talked us again through the program with all the fancy sales schnickschnack.”

Jana and her husband work in financial services, and are presumably more contract-savvy than the average person, so they ignored the salesman’s high-pressure pitch and “got straight to the point."

"We asked a lot of questions and he showed us what would be available and at what points amount, etc.," she said. "But our questions were never answered. We asked whether it's a timeshare (my other half still has one somewhere in Asia, worth not even the paper the contract is written on). The sales rep told us adamantly it isn't.”

They asked the salesman for the contract, so they could “read it in peace and quiet, do a little bit of research and then decide. That's when his manager stepped in and tried to lure us in, decidedly not to give us the fine print. We weren't moving an inch, and my other half even asked them if they would buy anything without reading the contract first.”

That was three years ago. Jana and her husband eventually escaped without signing anything, but Wyndham now had their contact phone number, and wasn’t afraid to use it.

“A couple of months later it started. Every so often I get called -- I had won something. After 3 years of harassment I told them to effing take me off their callers list, as they are scammers and there would be no way that I would ever buy anything from them. Well, one of ’em rung me today ... But, my new phone has an ignore function and that was hopefully the last I ever heard of them!”

Hopefully.

And hopefully Timothy P. of Melbourne, Australia, won’t have his next three years play out like Jana’s last three. Tim wrote us after attending a Wyndham sales presentation on Sept. 22, and concluding their salespeople were “unprofessional bullies.”

Tim almost considered buying a timeshare, he said, “until we were bullied and intimidated into a sale at the end of the presentation by a man whose name I cannot remember."

"His behavior was incredibly unprofessional and argumentative," Timothy said. "We left the presentation feeling angry and incredibly frustrated. I put a warning out to everyone who is looking to attend one of these presentations, as you will be treated like idiots and probably feel intimidated like we did. … Prior to the presentation I was told over the phone that it was a no-pressure, no-obligation presentation.”

Not so lucky

As annoying as Tim and Jana’s experiences were, at least they didn’t sign anything or part with any of their money. Most of our readers weren’t so lucky. Pamela P. of Worcester, Mass., wrote us on Sept. 16:

“We were basically accosted during vacation. For free tickets to a museum, we had to sit through a ‘no pressure’ timeshare presentation for 90 minutes. The presentation was over 5 hours and the salespeople wouldn't take no for an answer. By the time we left, we had purchased a deeded unit at Ocean Boulevard in Myrtle Beach.”

Uh-oh. As Pamela mourned, “We were told many lies.” The first: “We could use Bill Me Later for the down payment and if we couldn't pay it in 6 months, they would extend it another 6 months, interest free. After falling on hard times, we couldn't pay the down payment and were told by Bill Me Later that was not true, and Wyndham should not have told us that.”

What else? “We were told we would get 10 days of vacation during ‘primetime’ with the 84,000 points we bought into. Come to find out, for the property we bought, that only gets us 3 days, and SC is too far to travel to for just 3 days.” Also, “They didn't tell us our points expire. They have to be used or forfeited unless we pay a fee.

"We were told party weekends were for anyone who could attend just because Wyndham likes to treat their customers well. We later found out, you have to bring a guest and they have to sit through a sales pitch."

What else went wrong with their Virginia stay? “We were accosted again, and tricked into another presentation advertised as learning how your membership works and finding out about new resorts in New York and Boston, but it was actually another sales pitch. … We were told it would be 45 minutes but turned into over 4 hours.

Maintenance fees

Another time Pamela attempted to vacation at a Wyndham property, “We had to bring a guest over 28 with an income of over $70,000, or a person over 55, and they had to sit through a presentation. … They also never told us about all the fees that are associated with any services. … They never told us that the maintenance fees will increase when we signed up, but when they tried to get us to upgrade, they told us that we needed to get out of our current plan because it's just going to keep going up.”

Wyndham timeshare owner Ed M. of Tafton, Pa., also complained about maintenance fees, when he wrote us on Sept. 17 to say that “upgrades are basically buying more points with more maintenance fees.”

Ed never actually bought a timeshare, but explained that, “My wife inherited hers from her parents who bought it many years ago and they never went once. They since have both died and now we have it. We asked [Wyndham] how we could change a fixed week to points and they said, ‘This is all we have.’"

“When the smoke cleared we did change a fixed week to 126,000 points but when we signed the contract we went back to the room and saw that we bought another 126,000 points for $17,000, which we paid off within a month, thanks to Mom and Dad's will," Ed said. 

What are these points?

What are these “points” that Ed and other customers keep mentioning? Our attempts to find answers on Wyndham Resort’s incredibly annoying website went nowhere, though when we checked today’s eBay listings we found dozens of sellers trying to unload “Wyndham timeshare points,” with some auctions offering over 200,000 points for as little as a dollar.

The best explanation of the Wyndham point system we found came from a Fodor’s Travel Talk discussion forum, after a member asked, “Wyndham timeshares — should we or shouldn’t?”

Dozens of community members warned the advice-seeker to avoid all timeshares, and a commenter calling himself “No Timeshare” gave a more detailed warning against Wyndham’s in particular:

“If you buy, you will be purchasing a point system. It allows these resorts to sell then raise the amount of points it will take to stay there in the future. Then you have to buy more points. It’s a new twist to buying a week of timeshare. With the selling of weeks, resorts would eventually run out of inventory. With points, it is unlimited sales."

So points (not money) are what you need to buy time at a Wyndham property, except points (unlike money) have a built-in expiration date, and points you can spend at one property aren’t necessarily good at another property. Which is why “No Timeshare” urged everyone at the Fodor’s forum:  “My advice … rent for your vacation. It's cheaper and your kids won't be stuck with it someday.”

Alicia S of Johns Island, S.C., wrote us on Sept. 6 about her Wyndham experience: “My husband and I purchased 154,000 points from Fairfield Ocean Ridge Edisto, SC on 06-16-00 for $15,150.00. We paid the (so-called) mortgage in full on 08-08-03. This purchase was a mistake for us because we weren't able to use it very often. We used it approximately six times over the 13-year ownership.”

Not for lack of trying, though.

“It was also extremely difficult to attempt to make reservations as there never seemed to be any availabilities when we needed. This exacerbated the already frustrating feeling we had over such a huge financial mistake. The maintenance fee started at $54.03 and is now $98.44. They want to hold you hostage to this maintenance fee (which they can raise at any time) for life."

"We asked by phone (in June 2013) to discontinue our ownership, wanting nothing other than to be done. We were told ‘it's just not that easy’ to do. We had paid our account in full in 2003 and never missed a maintenance fee. The points are worth nothing and you cannot give them away because no one wants to be stuck with a lifetime of maintenance fees," she said.

Eventually, Alicia said, “We consulted with an attorney. Our attorney said trying to deal with them was frustrating and actually made her angry at times. They just try and wear you down so you will give up. They have held up recording the deed as long as they can, to obtain more maintenance fees. Our attorney told them she didn't need their permission to record a deed in SC. Their response was, ‘Go ahead... we'll just record it back to your client.’ …  We have given them approximately 27,000-plus dollars over the last 13 years in exchange for maybe roughly 42 days of hotel/condo use. Again, I understand this was our mistake. But for them to make you feel you have no way out even when you owe them nothing is just wrong on so many levels. Their aggressive practices need to be stopped.”

And in conclusion ...

As one remorseful timeshare owner put it: “Trust me, people, just save your money every year and purchase your vacation the old-fashioned way. I am trapped into paying for a headache, and these bozos have even begged me to put Wyndham in my will for my kids! Like I really want to leave my kids the headache I foolishly bought into.”

The Federal Trade Commission (FTC) and state agencies today announced a major takedown of timeshare property resale scams and phony or misleading travel prizes used to rope in unsuspecting consumers.

The agency announced 191 separate actions, including three FTC cases, 83 civil actions filed by 28 states and 25 actions taken by law enforcement in 10 other countries. Also, 184 individuals are facing criminal prosecution by federal and state prosecutors.

“Con artists take advantage of timeshare owners who have been in tough financial straits and are desperate to sell their timeshares,” Charles A. Harwood, Acting Director of the FTC’s Bureau of Consumer Protection, said during a press conference in Miami.  “They persuade owners to pay fat up-front fees by saying they have someone ready to buy the property, but that’s a lie."

Harwood had this advice for timeshare owners: "Never pay for a promise, get everything in writing first, and pay only after your unit is sold."

Harwood was joined by Florida Attorney General Pam Bondi; Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida; Jay Levenstein, Deputy Commissioner of the Florida Department of Agriculture and Consumer Services; and a victim of an unscrupulous timeshare resale operation.

“We cannot allow our elderly and vulnerable real property owners to continue to be the target of fraud schemes,” Ferrer said. “These victims, many of them elderly or in financial distress, looked to sell their units to help make ends meet or pay other bills.  Instead, they were defrauded out of more than $14 million in total.  Such fraud will not be tolerated.”

How it works

Fraudulent timeshare resellers lure consumers into paying hefty upfront fees, falsely claiming to have interested buyers ready to pay top dollar for the properties.  They claim sales are about to happen, but there are no buyers, and consumers lose hundreds or thousands of dollars. 

Deceptive travel prize promoters trick consumers into paying for discounted or “free” vacation packages supposedly worth thousands of dollars, but most people get nothing of value or have to attend high-pressure timeshare sales presentations.  All of these scams reach consumers via unsolicited email, mailed travel vouchers, and radio, TV and online advertising.

To help people avoid these kinds of scams, the FTC has updated its consumer education materials on new and emerging travel and timeshare resale frauds at ftc.gov/travel.

If you think the bottom fell out of the real estate market, just think what happened to the timeshare market. Hundreds of thousands of consumers have found themselves stuck with timeshares they would like to sell, if only there were a market for them.

This has created fertile ground for companies promising quick and lucrative solutions that usually turn out to be little more than shams.

In one such case, Vacation Property Services, Inc., has been permanently banned from the timeshare resale and rental business, and from all telemarketing, under a settlement with the Federal Trade Commission.  The settlement followed a court ruling that the company violated the FTC Act and Telemarketing Sales Rule (TSR).  

Ivette of New City, NY, described her experience with the company in a ConsumerAffairs posting: "The gentlemen promised that my time share will be sold within 90 days. It has been several years and I am still waiting."

The FTC charged that Vacation Property Services made tens of thousands of unsolicited telemarketing calls to timeshare owners falsely claiming that they already had, or could quickly find, buyers for the owners’ timeshares. The defendants demanded that consumers pay a large up-front fee to facilitate the sale.

The FTC’s complaint charged that the company and its manager and owner, Albert M. Wilson, misrepresented the company’s refund policy and the existence of potential buyers. The complaint also charged the defendants with calling hundreds of thousands of consumers whose phone numbers are on the FTC’s Do Not Call Registry.

In May, the United States District Court for the Middle District of Florida entered a summary judgment order against Vacation Property Services, Inc. and Wilson.  The court held that the company deceived consumers into paying large up-front fees by claiming that it had buyers lined up or would find buyers to purchase consumers’ timeshare properties, and that it had violated the TSR by calling telephone numbers listed on the National Do Not Call Registry.

The settlement order announced today resolves the FTC’s remaining claims against Wilson. The order permanently bans him from all telemarketing and from participating in the timeshare resale and rental business.  It also prohibits him from misrepresenting material facts about any goods or services, and from selling or otherwise benefitting from consumers’ personal information.

The order imposes a judgment of more than $4.2 million, which will be suspended when Wilson has surrendered $120,000, a 2002 Porsche 911, a Spectre Sportfish boat, and his interest in Vacation Property Services.

A timeshare rental/resale telemarketing business and its owner are in hot water. 

The Federal Trade Commission (FDA) and Florida Attorney General Pam Bondi have brought legal action, charging the operation allegedly deceived thousands of consumers into paying up to $2,000 based on false promises that they had buyers or renters lined up for consumers' timeshare properties -- and then failing to deliver promised refunds. 

A federal court has halted the operation and froze the defendants' assets pending further litigation. 

Unkept promises 

According to the complaint against Edward Lee Windsor and Information Management Forum Inc., also doing business as Vacation Property Marketing and Vacation Property Marketing Inc., the defendants cold-called timeshare property owners and falsely promised they had renters or buyers who would pay a specific dollar amount for the consumers' properties. 

They also promised a full refund of consumers' fees, which ranged from $500 to $2,000, if they did not rent or sell the timeshares as promised, or if consumers asked for their money back within a certain time period. 

According to the complaint, the defendants falsely told consumers they had business relations with major corporations, such as Home Depot and Pepsi that had an immediate need for the consumers' timeshare properties. 

Using a script 

A telemarketing script filed with the court stated, "What we do is market and advertise the rental and sale of resort properties to corporations who use them for conventions, training seminars, employee perks, business trips as well as their own vacation time . . . the reason that I've been calling you is because this weekend there is going to be a major event . . . We currently have over 700 corporate buyers and renters coming into town for this event." 

Consumers were allegedly told the properties could be rented for a certain amount, such as $1,800 a week, or that there were buyers willing to pay specific amounts, such as $18,500, within 90 days. Some consumers were also falsely told they would receive the proceeds from their rentals or sales before or shortly after the charges to the consumers' credit cards became due. 

Consumers who sought refunds were often strung along with more false promises to the point that they could not dispute the charges with their credit card providers, and when they were able to dispute charges, the defendants often vigorously contested their efforts to get their money back. 

As alleged in the complaint, consumers who were charged fees by the defendants did not obtain renters, buyers, or refunds. In limited instances, the defendants offered consumers a small portion of their money back, but most often they denied refund requests, contending they had fulfilled their agreement by placing an ad on their Website, onlinevpm.com.