FTC Settlement Bans Marketer from Timeshare Business, Telemarketing

The owner of a telemarketing operation that deceived consumers who were trying to sell their timeshare properties is 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).  The case is part of the FTC’s ongoing effort to crack down on con artists who use fraud and deception to take advantage of consumers in financial distress.

According to the FTC’s March 2011 complaint, Vacation Property Services, Inc., 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 Vacation Property Services, Inc. and its manager and owner, Albert M. Wilson, with violating the FTC Act and the Telemarketing Sales Rule by misrepresenting 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 court held that there were genuine issues of material fact with respect to whether Wilson had sufficient knowledge of Vacation Property Services’ misstatements and illegal calls such that he could be held financially liable for the illegal conduct. The court also held that the company and Wilson failed to pay the required fees to access the 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.  The full judgment will become due immediately if Wilson is found to have misrepresented his financial condition to the FTC.  Charges against the other defendants in this case were resolved in a settlement order announced in April.

To avoid pitfalls when selling a timeshare unit, read the FTC’s Selling a Timeshare Through a Reseller: Contract Caveats, and Time and Time Again: Buying and Selling Timeshares and Vacation Plans.

The Commission vote approving the proposed settlement order against Wilson was 4-0-1 with Commissioner Ohlhausen abstaining.  The order was entered by the U.S. District Court for the Middle District of Florida, Tampa Division, on August 23, 2012.

NOTE:  This settlement order is for settlement purposes only and does not constitute an admission by the defendant that the law has been violated.  Settlement orders have the force of law when approved and signed by a District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.