Learning how to investigate & prevent timeshare resale related fraud

I spend a lot of time in these forums looking into companies for people, and while I do enjoy doing that I thought it would be useful for those of you who don't know these tricks already to be able to look up the information as well.

I'm going to list off a few simple tactics, and then if anyone has questions feel free to ask (or if you feel I've missed something).

----------1)

The simplest thing you can do is to Google "[company name] + keyword"

The various keywords that will bring up the most information:

A) Complaints

B) Scam

C) Lawsuit

D) Desist (this will bring up either Desist & Refrain orders or Cease & Desist orders).

E) Ripoff

----------2)

See who built the company website. You can do this by visiting Whois.com and searching the URL there. It's a pretty easy to use website, but if you have any questions you can reach out to me. This website will tell you when the website was created, when it was last updated and when it will expire. Most of these companies register their websites through private domain companies that hide their personal information, but if they haven't used one of those companies the website will be registered to someone at the company.

----------3)

Lookup the corporate documents. Find out which state the company claims to be in and Google:

"[state abbreviation here] + business entity search"

The state site with the online database search will be one of the first links (usually the very first link, but not always).

Some state business databases are easier to navigate than others, and some are more transparent than others.

One of the best things you can do is to look up the corporate documents, and find out who the registered agents/officers are, and then search for other companies registered to those people to see if they received any complaints or lawsuits there.

Unfortunately not all states let you search by registered agent/officer name, so this tactic isn't always an option. Also, many companies use attorneys or corporate registered agents, and those are usually dead ends.

----------4)

Research the claims the company makes. Go to their website and see what they claim. If they claim to be a non-profit organization, or if they claim to be real estate brokers, use these tactics to confirm that information to see if they're telling the truth or not. Just like searching for corporate documents all you have to do is Google:

"[state abbreviation] + real estate license search"

or

"[state abbreviation] + non profit registry search"

----------5)

Once you have all of the basic information you should Google that as well. Google the following to see what pops up:

A) Registered agent name

B) Officer names

C) Phone numbers

D) Address

The main reason for this is if they own multiple companies, they'll often times share a lot of this information. Also, many of these companies use virtual offices or mailbox companies, so when you google the address see if it pops up as a virtual office, UPS location, Mailbox Etc or anything along those lines. This means they're not using an actual office to collect mail, which means they're trying to hide their actual location.

----------6)

Red flags:

A) Company has a lot of complaints on the BBB, Ripoff Report, Scamorg, etc.

B) Website was created relatively recently (in the last 12 months).

C) Company was registered relatively recently (in the last 12 months).

D) They use a virtual office or one of the various mailbox services.

E) No information can be just as telling as bad information. If you can't find anything on a company at all that in itself is a red flag.

F) They cold called you. Let's not forget that the biggest red flag in the first place is that a company cold called you regarding your timeshare. I don't care if it's to sell it, rent it, transfer the lease or donate it to charity. If someone calls you in regards to your timeshare there is a 99.9% chance they're going to steal your money, and you'll still be stuck with your timeshare [that statistic is hyperbole, don't take it too literally].

I'll stop there for now. This is by no means a comprehensive list of research tactics, but it's a useful start. I hope this information is helpful, and if you have any questions or concerns please feel free to let me know.

Jordan thank you for the excellent post. The information is right on the money. I would just like to add a couple of comments. NEVER pay anyone money upfront to rent sell or get rid of your timeshare. If an offer sounds " too good to be true " then it is exactly that... too good to be true. Like Jordan stated if they cold call you it's a SCAM ! Unfortunately by the time most people come in the forum they have already been ripped off. Please believe their posts because they are telling their horror stories and not trying to extract money from anyone.

The Shills that come in here posting stories about how a company helped them or a relative for an " upfront fee " are thieves looking for their next victim. There are hundreds of scams out there claiming to free you from your maintenance fees through phony charities, advertisements, and attorneys. Don't fall for their false claims. They are shills working for the scammers.

Jordan gives sound advise to follow and if you do exactly what he suggests you should avoid being ripped off.

donp196 wrote:

Jordan thank you for the excellent post. The information is right on the money. I would just like to add a couple of comments. NEVER pay anyone money upfront to rent sell or get rid of your timeshare. If an offer sounds " too good to be true " then it is exactly that... too good to be true. Like Jordan stated if they cold call you it's a SCAM ! Unfortunately by the time most people come in the forum they have already been ripped off. Please believe their posts because they are telling their horror stories and not trying to extract money from anyone.

The Shills that come in here posting stories about how a company helped them or a relative for an " upfront fee " are thieves looking for their next victim. There are hundreds of scams out there claiming to free you from your maintenance fees through phony charities, advertisements, and attorneys. Don't fall for their false claims. They are shills working for the scammers.

Jordan gives sound advise to follow and if you do exactly what he suggests you should avoid being ripped off.

Thank you Don. Unfortunately what I've learned is that a lot of people have to see for themselves, and don't take other people's warnings to heart. If they can see all of the warnings for themselves in black and white sometimes it helps. Some of these snake oil salesmen are too good though. They can sell ice to eskimos.

I hope everyone had a wonderful Thanksgiving!

I wanted to add some keywords for the first tactic I mentioned.

"[company name] + [forum]"

In this case if you type the company's name and a forum name like Redweek or TugBBS and anyone has asked about the company on those forums the thread should pop up right away. Often times you can find very useful information from people there, but keep in mind that these companies post in forums posing as "satisfied" clients to try to trick people. They're usually pretty easy to spot though.

It occurred to me that another important aspect of timeshare related scams is how they evolve. As time goes on the timeshare fraudsters change the scam so they can claim that they're a different type of service, and that they're not the same as the other people who took your money.

A basic timeshare resale scam is when someone cold calls you claiming to have a buyer lined up for your timeshare, and all you have to do is pay the closing costs (or stamp tax or upfront deposit or any other number of made up reasons), and after you pay them the deal falls through. Sometimes they'll guarantee to rent it until it sells as well. This varies a little bit on the pitch. They might not always have a buyer lined up, but they'll guarantee to find a buyer. A big part of this pitch turned into resale companies having corporate partners who had already agreed to rent out all of the timeshares. In reality you've signed an advertising contract, and when push comes to shove they claim that they never said they would sell or rent the timeshare, and that your hundreds or thousands of dollars was only to pay for the poorly written advertisement on their website (often times with incorrect information).

Some companies have since taken to being upfront about just being an advertising company, but they then still make big promises that result in people paying hundreds or thousands of dollars for said advertising. This should also be avoided since you can find similar services for free or at least for very, very low cost.

Another big part of timeshare resale has been the PCCs (Post Card Companies). These are most often a part of another type of timeshare resale scam which is the property transfer scam. PCCs will mass mail post cards across the nation, often times not even focusing on timeshare owners. They have more of a throw everything at the wall to see what sticks approach. Often times the post cards will be very urgent, and state that if you don't call right away you'll lose out on the deal. Some of these companies have gone as far as to change the phone number on a bi-weekly basis, so that the postcards from one month will have different contact information from the next month, which allows them to disconnect their phone number and leave with all the money they took for that two weeks and then move on to the next group of people (this isn't incredibly common, but it is a tactic I have seen used).

Property transfer companies often times use the PCC approach, but not always. Property transfer companies claim to be able to transfer your timeshare property out of your name into someone else's name. Some of these companies are Viking Ships, which will transfer the properties into a shell corporation, and then bankrupt the corporation. This is an illegal process that will make it appear as though the property was transferred from your name, but it may came back to bite you months down the line. These companies more often than not charge thousands, even tens of thousands of dollars to transfer these properties (which of course rarely get transferred).

This is where some of the previous tactics can be used, because a lot of property transfer companies will claim to be licensed real estate companies or professionals. Now don't forget that if they do happen to have those licenses it doesn't necessarily mean they're legitimate.

The property transfer has several variations like the timeshare resale. One of the most in-depth transfer scams that also offered to buy/sell points and offered new resorts (that didn't usually exist) was the Point Rental Liquidators group of companies. Redweek regulars are very familiar with that story, and there are two threads dedicated specifically to that group of companies.

This is already a lengthy post with just a few variations of timeshare resale scams. If anyone else would like to suggest other variations of the scam please feel free to contribute.

Again, the best bet is to ignore anyone calling about your timeshare no matter what they're offering, but sometimes a new sounding offer can cloud your judgement, especially if you're desperate to be rid of your timeshare.

jordanv6 wrote:

Another big part of timeshare resale has been the PCCs (Post Card Companies). These are most often a part of another type of timeshare resale scam which is the property transfer scam.

The PCCs are not necessarily scams. They're just not a recommended approach to getting rid of a timeshare.

It's been pointed out many times on these boards what the PCCs' MO is. After they convince an owner to pay them thousands of dollars to get rid of his timeshare, the PCCs get the owner to sign a Power of Attorney which gives the PCC power to do what it wants with the timeshare.

The PCC will then list it on E-Bay for a starting bid of one dollar. They might even use some of the thousands of dollars the owner paid towards the next maintenance fee and then, in the E-bay ad, let buyers know that the next maintenance fee is paid. If someone buys it, then the previous owner is now free of his timeshare and the PCC did what the owner paid them to do. Hence, it is not necessarily a scam.

The obvious downside is that there might not be anyone who want to buy this timeshare. If nobody buys it, then the owner is still the owner. As well, what the owner is paying the PCC thousands of dollars to do, he can do himself for a fraction of the cost.

Therefore, what is usually recommended on boards like these is to try to give it away yourself rather than pay a PCC to possibly end your ownership.

lancec13 wrote:

jordanv6 wrote:

Another big part of timeshare resale has been the PCCs (Post Card Companies). These are most often a part of another type of timeshare resale scam which is the property transfer scam.

The PCCs are not necessarily scams. They're just not a recommended approach to getting rid of a timeshare.

It's been pointed out many times on these boards what the PCCs' MO is. After they convince an owner to pay them thousands of dollars to get rid of his timeshare, the PCCs get the owner to sign a Power of Attorney which gives the PCC power to do what it wants with the timeshare.

The PCC will then list it on E-Bay for a starting bid of one dollar. They might even use some of the thousands of dollars the owner paid towards the next maintenance fee and then, in the E-bay ad, let buyers know that the next maintenance fee is paid. If someone buys it, then the previous owner is now free of his timeshare and the PCC did what the owner paid them to do. Hence, it is not necessarily a scam.

The obvious downside is that there might not be anyone who want to buy this timeshare. If nobody buys it, then the owner is still the owner. As well, what the owner is paying the PCC thousands of dollars to do, he can do himself for a fraction of the cost.

Therefore, what is usually recommended on boards like these is to try to give it away yourself rather than pay a PCC to possibly end your ownership.

You're right. I guess I should have clarified that while there are PCC scams that take the money and run, that doesn't necessarily mean all PCC companies are scams. Sometimes there are legitimate companies, and the outright scams, and then some people manage to find themselves in between the two somewhere.

We have sadly owned timeshares at Hanalei Resort since 2004. We have never been able to trade out either through Interval International or Trading Places. The resort is in deplorable condition since Celebrity lost ownership to the AOAO. What is the most revealing is that Dick Sweikart and David Nichol and their wives have moved around the BoD and never leave the Executive Board. They are the ones who chose for the rest of us to pay for all the assessments through the years. Each year we have paid additional assessments in mid year for property that is in bad shape. the restaurant burned in 2012 and has not been rebuilt despite the building being insured. The lounge bar isn't open and the staff is generally lazy and inattentive. Each person we speak to will not tell us what the AOAO has had to pay vs. the timeshare owners. The first places renovated were the actual resort owners. We are still being ripped off as the value according to timeshare resales is approx 1,000-2,000 dollars per unit. What is amusing is that we paid 15,000 dollars cash for the every year and a multitude of additional assessments per year for a place that is valued as a SALE for 1,000 dollars. What a rip off. We hold onto it because no one wants to buy such a pile. the best views on the island of KAUAI for the worst managed and biggest folly on the island.WHAT a sad shame and this resort gives all timeshare properties a horrible name.