REALTORS® are warning timeshare owners to be careful of resale fraud. Their warning is in response to a recent consumer alert issued by the California Department of Real Estate due to the increasing number of scams perpetrated in connection with timeshare resales.
"Due to the current economic climate, there are timeshare owners wanting to sell their timeshares as quickly as possible because they can no longer keep up with the maintenance and special fees, or because they are facing foreclosure. Their situation makes them vulnerable to scam artists," said Suzanne Yost, president of the Silicon Valley Association of REALTORS®.
Yost adds it is important for home owners to know in California, only licensed real estate brokers or salespersons employed and supervised by the brokers may list and sell timeshares for resale. The unlicensed perpetrators ask for money up front and pocket the fees paid by the timeshare owners without delivering the services they promised.
Below are three common fraudulent practices that the DRE has seen:
1. Unlicensed, unregulated, and illegitimate timeshare reseller fraudsters pose as and use the identities of licensed real estate brokers, providing a false sense of security, and then demand payment up front in connection with the purported resales.
2. Scammers falsely tell timeshare owners that the "agent" has found a "ready and willing" buyer for their timeshares. In certain cases the scammers were operating from and based outside of California, but they were using a California mailing address. Often, the address was simply a mail drop.
3. Fraudsters pose as timeshare buyers and use such advertising slogans as "Will Buy Your Timeshare for Cash," "Timeshares Wanted," or something similar, to lure timeshare owners, and then ask the owners for "a small amount of" money (which is often $1,000 or more) up front to process the paperwork for the transfer. Once the money is paid, the owners never hear from the scammers again.
The DRE alerts consumers to the following red flags to look out for to avoid being a victim of timeshare resale fraud:
1. Requests for upfront payments (advance fees) before any services have been provided.
2. Requests that you pay only in cash, or by wire transfer, or by money order or a certified bank or cashier's check.
3. An unwillingness to meet in person, to give you a business phone number, an actual physical business office address, and/or to provide you with a business card.
4. Advice that you do not need to read or understand an agreement or any other document that you have been asked to sign.
5. Claims from the timeshare reselling agent that the market for your timeshare, or timeshare resales generally is "on fire," "hot," "extremely active."
6. Unqualified guarantees or promises that the timeshare reseller can get your timeshare sold within a certain period of time, or "money-back" guarantees with respect to those monies you are asked to pay upfront.
7. Requests that you provide personal financial information.
8. Advice that you can simply walk away from your timeshare by transferring it to some third party.
9. Statements that you must act immediately, or without any delay.
10. Advice that you should not talk with your family, attorney, accountant, and/or anyone else.
11. Use of a post office box.
12. The use of lofty or complicated language that you cannot understand.
If you think you have been scammed, you may file a complaint with the DRE at http://www.dre.ca.gov/cons_complaint.html. You may also file a complaint with the California Attorney General, at www.ag.ca.gov/consumers, or the Federal Trade Commission at www.ftc.gov.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.