Timeshare Woes Turn Florida Vacation Dreams to Nightmares

Florida is a very popular locale for timeshares, but this elevated demand has created some questionable market practices -- and corresponding legal issues. About 35 percent of the roughly 197,300 timeshares found in the United States are located in Florida. Unfortunately, some of the worst scams and resulting lawsuits related to the timeshare industry have also originated here. This was the impetus for recent efforts to increase oversight and regulation for the industry.

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Vanishing Resales

The timeshare resale business has attracted multiple unscrupulous practitioners in an economy where timeshare values have plummeted. Since the market downturn left many timeshare owners eager to jump at prospective buyers, a middleman business to facilitate these resales increased drastically. These resellers would often cold call owners, claiming to have a buyer willing to pay an attractive price. The owner, they would say, simply had to pay some upfront fees. Sadly, too often the reseller would then disappear with the owner’s money.

Responding to consumer complaints, the Florida Attorney General’s Office filed lawsuits against three such companies in mid-2010. One was Timeshares Direct, better known as Timeshares by Owner, which was based in Orlando. The state had received 180 complaints about their practices by the time they acted. At the time the lawsuit was filed, Timeshares by Owner had no working website or phone number. However, it was involved with a radio show called Vacation Time.

Fraudulent resale companies like Timeshares by Owner were accused of several unethical practices. One was false telemarketing in which the seller was told of a ready buyer who did not exist. Others included not delivering refunds due the seller and not finding a buyer when promised, even though in most cases, the companies collected upfront fees for their services.

In May 2012, Timeshares by Owner settled its case with the Florida Attorney General. The company claims that the lawsuit had involved only a small fraction of its transactions, and that it was found to be innocent of deliberate wrongdoing.

Timeshare Recovery Scams

In recent years, Florida timeshare owners have lost millions to this type of shady company falsely claiming to have found them buyers. Now a new ploy has emerged to prey on already desperate victims. For a fee, these scammers claim to be able to recover timeshare resale losses on behalf of the seller. According to the South Florida Sun Sentinel, the Florida Attorney General received more than 600 related complaints between September 2010 and late 2011 and is actively investigating at least one firm. One operation, Creative Vacation Solutions in South Florida, was already prosecuted in Illinois for allegedly conning over $35 million from 22,000 people.

The Florida Department of Agriculture and Consumer Services is also investigating the issue from the angle of telemarketing law violations. Timeshare recovery operations often use telemarketing to target desperate owners who have lost money in resales. Sellers have filed more than 19,000 complaints over resale transactions they believe were fraudulent or mishandled. This is often public information that recovery operators can use to find targets. The Department has already identified 20 suspect firms that are telemarketing without a license.

The steps taken by the Florida legal system to target fraudulent companies victimizing the state’s timeshare owners have certainly helped to relieve the problem, but it is never possible to completely wipe out this type of illegal activity. If you own a timeshare, therefore, you should always be cautious when considering property services. If a promise sounds too good to be true, it probably is.

Boris Razmiki

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