Timeshare Scams Target the Elderly

For too many elderly timeshare owners, their dream vacation getaways have turned into nightmares. As bad economic times force them to sell their timeshares, con-artists hawk promises to line up buyers when all they intend to do is take the owner's money – lots of it. Timeshare scammers also connive to trap the elderly in travel-prize schemes that turn into money holes.

Fortunately, the authorities are onto them. The Federal Trade Commission (FTC) announced 191 law enforcement actions to crack down on timeshare-resale and travel-prize scams, including three FTC cases, 83 civil actions in 28 states, and 25 law enforcement actions in ten other countries. 
 
All told, these swindlers bilked their victims out of tens of millions of dollars and 184 people face criminal charges so far. The FTC's announcement comes less than a year after timeshare-resale and travel-prize scams made the Consumer Federation of America's top-ten list of consumer complaints.

"Con artists take advantage of timeshare owners who have been in tough financial straits and are desperate to sell their timeshares," according to the agency. "They persuade owners to pay fat up-front fees by saying they have someone ready to buy the property, but that’s a lie."

Even worse, after a resale scammer has disappeared with thousands of dollars with no buyer in sight, a second con artist calls claiming to represent a "resale recovery services" firm, according to Forbes. This individual makes a false promise to recover the funds lost from the first fraudulent transaction for another hefty fee. After paying the fee, the victim never hears from them again.

The pressure may be intense for a timeshare holder, who can be on the hook for on-going maintenance fees (sometimes thousands of dollars per year) when the management companies fail to honor their contracts.

Typical travel-prize scams lure victims to high-pressure sales presentations with promises of free or discounted travel. For example, Forbes reports that Festiva promised large-screen TVs or cruises to seniors who attended Festiva sales presentations.  The office of the Louisiana Attorney General, which handled scores of complaints against the company, reported that "Once there, [victims] were forced to listen to a six-hour sales pitch. Some never received their ‘prizes,’ others complained that the free cruises ended up costing hundreds of dollars in fees."

To avoid getting scammed:

• never pay for a promise and be suspicious of up-front fees (don't pay until your unit is sold, advises the FTC)
• always get everything in writing first
• have any documentation reviewed by a trusted financial advisor, realtor, or attorney before signing – if a sales rep pressures you to sign or pay something immediately, don't
• pay close attention to maintenance responsibility and rules for selling a unit
• before agreeing to anything, check for complaints against timeshare resellers by going online, or contacting the state Attorney General and local consumer protection agency

Senior Scams

The IRS has issued an alert warning seniors that they are the target of yet another scam.

With April 15th looming, the con artist tells seniors they are entitled to a tax refund or stimulus payment but - as many scams go - in order to get the money they need to pay an upfront fee. Of course, the tax refund or stimulus payment never arrives and the upfront payment is never seen again.

This is a new spin on a list of scams that still work so they bear repeating. One scam that has stood the test of time involves the trickster who claims to be a "grandson" (or "granddaughter"), and who calls grandpa (or grandma) frantically explaining that they've been in an accident, arrested, and need money sent quickly to get out of jail. The phone is handed to the kid's "lawyer," who directs the grandparent to send thousands of dollars via Western Union.

This scam only works when worried elders are so rattled that they suppress their legitimate doubts. Don't fall for it!

Here is a list of the Federal Trade Commission's 10 tips to avoid fraud:

• Remember, once you wire money, you can't get it back.
• Don't send money to anyone you don't know.
• Don't respond to any message - phone call, text or otherwise - that asks for personal of financial information.
• Don't play foreign lotteries.
• Don't deposit checks from someone you don't know and then wire money back, no matter how convincing the story.
• Read monthly bills and statements carefully.
• After a crisis or disaster, give to established charities.
• Talk to your doctor before buying health products or signing up for treatments.
• Know where an offer comes from and who you're dealing with.