Timeshare Owners Beware: Resale Scams Could Cost You
Published on Tuesday, 17 April 2012 08:20 Written by TradersHuddle Staff
Visa and the U.S. Federal Trade Commission Join Forces to Educate Consumers
SAN FRANCISCO, April 17, 2012 /PRNewswire/ -- Visa Inc. (NYSE: V) and the U.S. Federal Trade Commission are working together to raise consumer awareness around timeshare resale fraud typically occurring on payment cards. According to the FTC, the number of consumer complaints about timeshare resale the agency received has more than doubled in recent years.
Here's how the scam works: A timeshare property owner gets a phone call with an offer to sell a vacation property to a waiting buyer. The timeshare owner is asked to sign a contract and pay a transaction fee – usually with a credit or debit card – before the alleged sale can proceed. But after the contract is signed and the fee collected, the timeshare owner rarely is contacted again by the reseller. In most cases, the buyer never existed, and the contract was for advertising services only. When the timeshare owner realizes this and calls to get the fee refunded, the fraudulent reseller typically ignores the phone calls, denies any refund requests, or stalls to go beyond chargeback timeframes and evade acquirer and Visa risk controls. Information is available at www.VisaSecuritySense.com.
Visa supports law enforcement efforts to identify and prosecute fraud. Visa has also alerted merchant acquiring financial institutions to this issue and is requiring them to review the marketing practices of their merchants to ensure compliance with relevant consumer protection laws and Visa Operating Regulations.
"We're taking a two-pronged approach to tackling timeshare reseller fraud by working with organizations such as the FTC to help alert consumers to this emerging scam and working with financial institutions to heighten monitoring of timeshare resale merchants," said Martin Elliott, Head of Americas Acceptance Risk and Global Brand Protection, Visa Inc. "We know that there are many legitimate timeshare resellers out there. Our goal is to weed out the fraudulent ones for the benefit of merchants and consumers."
"If you own a timeshare, chances are you will hear from fraudsters pretending to be resellers, promising a ready buyer, top dollar, or a quick sale. This is timeshare hot air," said David C. Vladeck, Director of the FTC's Bureau of Consumer Protection. "The more pressure you get to pay fees before your timeshare is sold, the more likely it's a scam. Check out the reseller, and get all the details of the contract in writing. That includes the fees, costs, and services you'll get for your money. If the contract you get isn't what you expected, don't sign it and don't pay any money."
Vladeck noted that the FTC has taken enforcement actions to stop timeshare resale scams, and that under a recent court settlement, a Florida couple were permanently banned from engaging in timeshare resale services.
On April 6, Florida Governor Rick Scott signed into law the Timeshare Resale Fraud Bill, which is intended to protect the many timeshare property owners in the state from unscrupulous merchants. The Florida Attorney General's Office reported receiving nearly 9,000 consumer complaints about timeshare resale fraud in 2011, representing the highest complaint category.
While introducing the state legislative initiative to address timeshare resale fraud last October, Florida Attorney General Pam Bondi said, "Florida is home to millions of timeshare periods that consumers purchase. We cannot allow unscrupulous individuals to mislead and defraud our consumers who are attempting to sell their timeshares, many of whom have invested their life savings into their dream vacation homes."
Visa and the FTC offer the following tips to timeshare owners on how to spot a timeshare resale scam:
- Don't agree to anything on the phone or online until you've had a chance to research the reseller. Contact the Better Business Bureau (www.bbb.org), state Attorney General (www.naag.org), and local consumer protection agencies (www.consumeraction.gov) in the state where the reseller is located. Ask if any complaints are on file.
- Before you sign a contract with a reseller, get the details in writing. The written contract should include the services the reseller will perform; the fees, commissions, and other costs you must pay and when; whether you can rent or sell the timeshare on your own at the same time the reseller is trying to sell your unit; the length or term of the contract to sell your timeshare; and who is responsible for documenting and closing the sale.
- Ask if the reseller's agents are licensed to sell real estate where your timeshare is located. If so, verify it with the state Real Estate Commission. Deal only with licensed real estate brokers and agents, and ask for references from satisfied clients.
- Ask how the reseller will advertise and promote the timeshare unit. Will you get progress reports? How often?
- Ask about fees and timing. It's preferable to do business with a reseller that takes its fee after the timeshare is sold.
Consumers who think they have been victims of a timeshare resale scam and who have not been able to resolve the issue directly with the merchant should call their card issuer to dispute the charge, if the fee payment was made with a credit or debit card. Consumers may also report their experiences to the FTC and find additional information on timeshare resale fraud including Selling a Timeshare Through a Reseller: Contract Caveats and Time and Time Again: Buying and Selling Timeshares and Vacation Plans. Information about other scams and tips for avoiding them are available at www.VisaSecuritySense.com.
About Visa Inc.: Visa Inc. is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable digital currency. Underpinning digital currency is one of the world's most advanced processing networks—VisaNet—that is capable of handling more than 20,000 transaction messages a second, with fraud protection for consumers and guaranteed payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, ahead of time with prepaid or later with credit products. For more information, visit www.corporate.visa.com.
SOURCE Visa Inc.