It’s not an easy time to be a timeshare owner. And the last thing they need is a company making false promises that corporate buyers and renters are clamoring for their timeshares — if owners will just pony up a “registration fee” between $500 and $2,000. According to a lawsuit filed by the FTC and Florida AG, that’s what was going on with an Orlando-based outfit called Information Management Forum.
How does the operation work? Telemarketers allegedly cold-call owners, claiming they can rent or sell the person’s timeshare property quickly and for a good price. Often, the telemarketers assure consumers they have renters or buyers lined up, including major businesses that need lodging for corporate events. After dropping a few instantly recognizable company names, sales people create a sense of urgency by claiming that an upcoming convention or other event has made timeshares in their locale particularly hot.
The patter was persuasive:
The name of our company is Vacation Property Marketing. What we do is market and advertise the rental and sale of resort properties to corporations who use them for conventions, training seminars, employee perks, business trips as well as their own vacation time . . . . Does that make sense? . . . . Now, the reason that I’ve been calling you is because this weekend there is going to be a major event . . . . We currently have over 700 corporate buyers and renters coming into town for this event. This would be phenomenal exposure for your property as long as you both know you want to rent/sell and secure a return on your investment.
To cash in on the demand, all owners have to do is pay that “registration fee.” No worries, the telemarketers claim. If the unit isn’t rented or sold as promised, owners could get a refund within a set time. The telemarketers further claimed owners could get their money back for any reason within a certain period, usually 7 days. According to the complaint, some owners who expressed concern about the upfront fee were assured they’d have cash in hand from the sale or rental before or soon after the charge to their credit card was due.
What did owners get for their money? First, what they didn’t get. According to the FTC and the AG, they didn’t get a buyer or renter or money from a sale or lease. The defendants typically flat-out refused to give refunds, even when owners tried to cancel within the specific time. Other people were strung along with further deceptive promises until after the refund period had elapsed. So what did the consumers get? An online listing on an obscure website.
The company’s contracting practices also raised law enforcers’ eyebrows. The complaint alleges that many owners didn’t get written contracts at all. Others got paperwork that didn’t reflect what they’d been told. Instead it was a marketing contract to advertise their timeshare online. For the first time, in small print at the bottom, the defendants revealed they’re a “for sale by owner marketing company,” which has “sold zero timeshare properties for the previous two years.” In equally small print, the defendants disclaim all promises that they can sell timeshares within a specific time frame or for a specific price.
The complaint alleges violations of the FTC Act, the Telemarketing Sales Rule, and Florida’s Deceptive and Unfair Trade Practices Act. A federal court has halted the operation and has frozen the defendants’ assets pending further litigation.
Know a timeshare owner trying to sell? Share Selling a Timeshare Through a Reseller: Contract Caveats.