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The attorneys at Ballard Spahr have just released word that The Federal Trade Commission and the U.S. District Court for the Middle District of Florida have entered a final judgment and settlement against a number of fraudulent timeshare resale companies who employed illegal telemarketing techniques to bilk timeshare sellers out of thousands of dollars.

The Scam

The defendants contacted sellers via phone with a classic line: they already had buyers lined up and would just need an upfront fee to cover, in this case “earnest money deposits.”

This particular scam charged owners up to $3,150 in advance fees; while assuring clients their sales would be reviewed and approved by the FTC. Needless to say, the timeshares were never sold and the scammers routinely denied demands for refunds. The fraudulent timeshare resellers used PO Boxes to receive their funds (another timeshare scam red flag) and operated under a number of names including:

The Ruling

The defendants were charged with violating the FTC Act and the FTC’s Telemarketing Sales Rule. The judgment permanently bans all defendants from ever working in timeshare again, and imposes a fine of more than $6 million dollars. The huge settlement speaks to the FTC’s renewed dedication to the punishment of fraudulent timeshare resale operations.

What You Can Do

While the FTC and regional district courts continue to fight timeshare resale scammers, it’s ever more important for consumers to remain diligent in protecting themselves while selling their timeshare. Timeshare sellers should always work with a licensed real estate broker who specializes in timeshares and doesn’t charge an upfront fee.

And don’t just take their word for it. Scammers will tell you anything to get your money. It’s up to you to do the research. Do they have current real estate licensing? Are they BBB accredited? Do they belong to any broker’s groups? Do they have a real street address?

If you an answer “yes” all those questions, you’re on the right track to finding a broker who can safely sell your timeshare. And remember, the most important lesson we can learn from stories like this is, never, ever pay in advance to sell your timeshare.

SOURCES:

http://www.jdsupra.com/legalnews/63-million-judgment-awarded-in-alleged-41576/

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