Commerce Department exposes fraudulent timeshare schemes
The Minnesota Department of Commerce has uncovered 11 unlicensed sham companies targeting timeshare owners falsely claiming to be able to sell or rent their properties and scamming them into paying thousands of dollars in transaction costs that never result in a sale or rental of their properties.
In every case, the company used a fake street address on their website and in the materials they provided to timeshare owners. The addresses either did not exist or were for buildings in which the sham company was not a tenant.
In one instance, a company used fake Minnesota business registration and license documents to convince a timeshare owner of its legitimacy. The Commerce Department ordered the eleven sham companies to immediately halt their alleged illegal activity in Minnesota.
The investigation comes on the heels of a Minnesota Department of Commerce enforcement action in late 2012 against Renaissance Marketing for running an alleged "bait and switch" timeshare scheme that targeted consumers across the country. The initial investigation triggered further complaints about companies offering to sell or rent Minnesotans' timeshares often using fake Minnesota addresses.
"The department took swift and decisive action against these alleged schemes duping timeshares owners," said Commerce Commissioner Mike Rothman. "These sham companies are preying on people desperate to sell their timeshares with the intent to scam and defraud them out of thousands of dollars."
The sham companies went by the names of: Global Properties Specialists, Integrated Escrow Services, Platinum Resort Services, ABS Consulting Company, World Transfer Title, Premium Properties Management, Net Management Group, Concord International Title, Continental Property Solutions, Twin Cities Property Advisors, and World Event Management.
Concord International Title, Platinum Resort Services, ABS Consulting Services, and World Transfer Title all used fake Minnesota addresses, while Net Management Group claimed to be based in Michigan and World Event Management claimed to be based in Colorado. Global Properties Specialists claimed an Arizona address but maintained it was affiliated with and used Integrated Escrow Services, which it represented had a Minnesota address. The department's repeated efforts to contact and obtain information from these companies by email, U.S. mail, and telephone calls went unanswered.
The department's investigation found that the scams all followed a similar pattern like the one used by Global Properties Specialists. Based on statements made by the scammed timeshare owner, Global Properties Specialists cold called the Michigan timeshare owner about selling their Costa Rica timeshare property and ultimately led the timeshare owner to believe that it had a buyer for the property.
The timeshare owner reported that Global Properties Specialists further stated it would guarantee the sale of the owner's interest in the property. Based on those representations, the timeshare owner agreed to wire cash in the amount of $6,550, which Global Properties Specialists claimed was a necessary transaction fee for service.
After wiring the initial payment, Global Properties Services advised the timeshare owner that an additional payment of $11,790 was necessary to pay a 15 percent sales tax plus a 3 percent foreign investment tax. After they had wired the second payment, the timeshare owner was again contacted by Global Properties Specialists for yet another $4,585 for a payment of a 7 percent commission. After making the third payment, the timeshare owner received an email from Global Properties Specialists stating that an additional payment of $4,422 was necessary for a bank surcharge. The timeshare owner declined to make the final payment, after which Global Properties Specialists stopped answering the timeshare owner's telephone calls and emails.
The department's investigation also found that the title company, Integrated Escrow Services, with which Global Properties Specialists represented it work with to complete the sale, used a fake Minnesota address and had supplied an Oregon resident with a fake Minnesota real estate and driver's license, and a fake Minnesota business tax registration to bolster its credibility.
The department worked with the Better Business Bureau of Minnesota and North Dakota in the investigation of these companies.
"Minnesotans need to exercise due diligence when selling their timeshares," said Rothman. "These scams are becoming increasingly prevalent and sophisticated, and Minnesotans should check with the Department of Commerce to confirm the licenses of purported timeshare resellers. Further, those who are considering the initial purchase of timeshares need to educate themselves on the potential benefits and disadvantages of timeshare ownership."