Agency Investigation Leads to Arrests in Timeshare Fraud

The Federal Trade Commission (FTC) brought formal charges against Universal Timeshare Sales Associates (UTSA) for committing timeshare resale scams. Philip Johnson, an investigator for the Oregon Real Estate Agency broke the case while investigating complaints from time- share owners in several states across the nation. His research pointed to an Oregon business address, which turned out to be a mail drop for a group based in the Domini- can Republic. After a thorough investiga- tion, he gave his findings to the FTC.

The FTC launched a nationwide and international mass arrest in June against UTSA and similar groups. Mr. Johnson’s efforts led to the firm being shut down, its owners indicted, and its assets frozen. More importantly, his report cut the amount of time the FTC needed to conduct its own investigation. The FTC was able to act be- fore UTSA could cause more damage. Read more about the case in the FTC’s official press release.

Timeshare Resale Fraud - How it Works

Timeshare resale fraud has become increasingly common and effective. Financially strapped timeshare owners are looking to sell their timeshares to get out from under the burden of timeshare maintenance fees. The scammers take advantage of owners’ desperation by seemingly offering them what they want for a “fee.” There are four steps to most cases of timeshare resale fraud: Contact. A timeshare owner lists their timeshare for sale and receives a call 1. from a company or firm saying they have a buyer lined up. Fees. Before the company can sell the timeshare, they ask for payments from 2. the owner in advance – filing fees, closing costs, maintenance fees, etc. Avoidance. The closing date passes and the timeshare is unsold. After sev- 3. eral days of missed phone calls and excuses, the company is evasive on its promise to sell the timeshare. Loss. In actuality, the buyer never existed. By the time the seller finds out, 4. it is too late; they have lost hundreds, sometimes thousands, of dollars they cannot reclaim in fake “fees.” Not all timeshare resale services are scams. Timeshare reselling in Oregon requires a broker or principal broker license. Real estate licensees must follow Oregon Revised Statute chapter 696 and 94.940 when selling timeshares located in Oregon. For more information about timeshare resale fraud, visit the Federal Trade Com- mission’s website.

Oregon Real Estate News-Journal

October 2013


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