Timeshare Resale Scams Involving Fake Property Appraisals
One company which offers resale services for timeshare units, campground sites and deeded vacation holdings says they are agents for English and Danish companies who successfully market timeshare units and campgrounds throughout Great Britain and the European Economic Community ("EEC") countries. They tell you the market for resales is "hot" and that their company has a high success rate in reselling units. They claim to have extensive lists of sales agents and potential buyers.
They say that there is a strong demand for timeshares overseas, and that they can sell your property at a high price. They may even state that if they do not sell your timeshare within a specified time, typically nine to twelve months, you are guaranteed to receive, from another overseas company, 90% of either the appraised value of the property or the property's list price.
They may charge an advance listing fee from $200 to over $4000 for this service. To further entice you, they even offer a money-back guarantee or a $1,000 government bond if they can't sell your timeshare within a year.
Sadly, it is unlikely that the company can sell the timeshare at all, let alone at a price equal to or greater than your original purchase price. Their lists of sales agents and buyers consist of people who have never heard of the company or have no interest in buying a timeshare.
In addition, certain consumers whose timeshares don't sell after a year are presented with a long-term government bond presently worth only $60 or $70. Or, never intending to provide the promised sales or service, the agents simply change names then move their operations, along with your money, to another location.
Timeshare Terrorism Tax
As far as getting out of contracts - that's a tough one. You probably already know there is little resale value on a timeshare so that usually isn't an option. A lot of the people I've talked to have been willing to lose their original investment if they could just stop paying the annual fees and walk away but the company won't let them.
Our friends at RHC just sent out a letter to their members - this year everyone is getting a "special assessment" in addition to their annual fees due to 9/11.
Real Estate Liquidation Firms
Tens of thousands of frustrated property owners across the United States and Canada are getting sucked into an explosion of real estate “liquidation” firms. The liquidation firms, in exchange for an advance fee in the area of $250 to $1,000, promise to find buyers for un-salable property.
With a barrage of sophisticated direct mail and telemarketing solicitations, these firms are telling weary property owners that the up-front charge is a marketing fee needed to cover the cost of promoting the properties on television, radio, a nationwide computer database, mass mailings, ad nauseum. Property owners are assured that their property will be marketed until sold!
The fact is, that in most cases, once the fee is collected, the firm is never heard from again. That is called the “No-Pester” guarantee.
Once you send them your money, we’ll guarantee they won’t pester you. It leaves the person still holding the property and the loss of hundreds of dollars. These land liquidation promotions have generated complaints in almost all US states and Canadian provinces.
Further, a lot of these land liquidation schemes use assurances such as stating they are registered and bonded by state agencies, giving the false impression that they can also provide real estate brokerage services, even though they are not licensed to do so.
These liquidation scams are cruel because they exploit the desperation of property owners who want to sell a piece of land or a property, but have not been able to do so.
The land liquidation firms use familiar abuse tactics to get the people to part with their money. Owners of raw land, timeshares, and trailer park lots are particularly susceptible.
These firms are under investigation all across the United States. In Texas, where a woman sent in a $388 check to a liquidation firm, she was told she would momentarily be receiving a contract in the mail. Of course the contract never arrived.
In Oregon, a man sent $495 via Federal Express to the liquidation firm so he could sell his timeshare. When a contract was sent to this man, he refused to sign it because the terms differed substantially from what was discussed on the phone solicitation.
But the company refused to refund the sales fee. A recorded conversation between real estate liquidation sales persons in Idaho got one couple on the hook for a fee of $695 by stating: “At a price of $16,000, I am showing that if you keep it at that, I have got between 18 and 20 buyers registered in the computer that we can show it to today.”
In Arizona, Cease and Desist orders have been issued against seven out-of-state and six in-state real estate liquidation firms. In Alabama, one man sent in $250 in response to someone offering to sell his property for seven times its actual market value.
Let’s face it, this is a typical scheme: Empty promises, sophisticated outreach to potential victims, and demand for advance fee, followed by unresponsiveness. But in these particular cases, the author does not feel particularly charitable toward most of the victims.
As in any fraud, you need a perpetrator and a victim. Both of them must be willing participants.
In this, as in almost every other case, the perpetrator has hit the greed (and admittedly in some cases the desperation, for which we do feel sympathy) factor on the victim.
The victims think they are going to put something over on someone else and unload a worthless piece of real estate.
Some of the companies involved that have received cease and desist orders are:
ADNET Inc., DBA the Advertising Network (Texas);
American Land Liquidators, Inc. (Texas);
Resort Properties Marketing, AKA Resort Nationwide Land Liquidators, AKA Nationwide Liquidation Services Inc., (Texas);
Prime Property Locators, Inc.(Missouri);
Properties Marketing (Texas);
Universal Land Liquidators Inc., AKA Universal Liquidators, Inc., (Texas).