FTC Cracks Down on Timeshare Resale Scams

PHOTO: Robert Burk, of Nevada City, Calif., is a former victim of a timeshare resale scam.

When Robert Burk of Nevada City, Calif., wanted to sell his timeshare in Lake Tahoe, he researched a handful of companies that contacted him, offering to resell his timeshare.

At the end of 2008, Burk, an electronics engineer who is now 53, had gotten laid off for the first time in his career and thought selling the timeshare would be one way to help "weather this unemployment storm."

In 1999, he bought a timeshare for about $14,000 that gave him access to the two-bedroom townhouse for one week every other year.

Around August 2009, Timeshare Mega Media, based in Florida, contacted him.

"I was getting a little bit desperate, because I was worried I wouldn't get a job," he said. "They told such a convincing story, and their website looked legitimate, and it all sounded really good."

Their upfront fee was about $2,450 to list Burk's property on their website and help broker a sale. They even promised to recoup $1,200 he had lost from another resale company.

"I put down on a credit card, thought everything was good. They sent me the paperwork. I was still a little hesitant. I would call and they would answer their phone," Burk said.

The company, more than once, told him they had a buyer for his property. But each time, he said, "they started hemming and hawing."

Burk said it was "one excuse after the other," such as a problem with financing, or his representative was re-assigned to their Las Vegas office. He said he never heard the buyer's name or what the offer was.

Law enforcement agencies are working to stop travel and timeshare resale scams like the ones Burk experienced.

The Federal Trade Commission announced on Thursday 191 actions brought against 184 individuals facing criminal prosecution by U.S. Attorneys and local law enforcement, not related to Timeshare Mega Media. The announcement includes 83 civil actions brought by 28 states.

Fraudulent timeshare resellers lure consumers into paying hefty up-front fees, claiming to have interested buyers ready to pay for the properties, but consumers often get nothing.

The scammers caught by the FTC for these recent actions defrauded victims of more than $14 million. Many of the victims are elderly or in financial distress, the FTC said.

"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. Our message to timeshare owners is simple: never pay for a promise, get everything in writing first, and pay only after your unit is sold."

Around the spring of 2010, Burk complained to state authorities in Florida and the Federal Trade Commission. Over a year ago, the state of Florida collected money from Timeshare Mega Media through a surety bond program from which Burk received about $1,900.

"I didn't get all the money back, but I thought it was a relatively good deal," Burk said.

Burk found a new job after being unemployed for nine months. He is no longer trying to sell his timeshare, but he said he still receives solicitations to sell.

When asked for his reaction to the FTC's news on Thursday, Burk said, "This is an amazing number of charges brought against different companies."

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