2012 National VIP Timeshare Scam Update:
If you Are a Victim of a Timeshare Scam, Email The Time Share Chronicles Today with your contact information and SPECIFIC DETAILS of your situation to vip@timesharechronicles.com
A telemarketing operation that preyed on timeshare owners desperate to dump their properties was shut down after the Federal Trade Commission won a temporary restraining order in U.S. District Court in Tampa, Florida, the agency announced today.
The government alleged that tens of thousands of unsolicited calls were placed by St. Petersburg-based Vacation Property Services, Inc. and two related companies since 2006 that pitched the idea the businesses could get them buyers for their properties. In exchange for getting a promise quick sale — they said they had buyers ready to make a deal — the property owners were asked to send payments of $200 to $8,000.
Telemarketers even offer phony congratulations to the victims, the government said in court filings. When they questioned the fees, they were told they were to cover sales-related costs including a title search and processing fees.
After the payments were made, the FTC said, it became clear there were no buyers lined up. When the timeshare owners complained and asked for refunds, they were ignored or rejected, the court filings said. They led consumers to lodge hundreds of complaints against the telemarketing companies.
The FTC also charged the company with making hundreds of thousands of telemarketing calls between November 2009 and November 2010 to people registered on the national Do Not Call list — a violation of federal law.
In addition to Vacation Property Sellers, Timeshare Experts, Higher Level Marketing, (dba Vacation Property Services) as well as principals Albert M. Wilson, David S. Taylor and Frank M. Perry, Jr. were named in the court order. Wilson and the same companies were named in a series of complaints and subsequent settlements with the Florida Attorney General — in which the businesses agreed to stop the the practices the FTC cited. That was in 2007 and 2008.
These types of scams have proliferated in recent years as the timeshare resales market collapsed during the economic downturn. The FTC shut down a similar operation, Timeshare Mega Media, in the fall. That outfit was operating from a Fort Lauderdale-area boiler room that took in millions from timeshare owners.
Timeshare owners, particularly those struggling financially, became a good target for scams because they are typically on the hook for maintenance fees and money owed on the property. As they came to realize that recovering their initial investment — or even getting a substantial portion back — was difficult their vulnerability grew.
The scams aimed at the idea that not only would you free yourself of the obligation, it was even possible to make a profit — something that had seemed impossible.
“In a time of high unemployment and reduced access to credit, these twin promises can be alluring to consumers caught in difficult economic straits,” the FTC said in a statement.
The investigation into Vacation Property Services involved the U.S. Postal Inspection Service, Florida Attorney General’s office, the Florida Department of Agriculture and Consumer Services, and St. Petersburg police.
If you are approached to sell your timeshare, the FTC offers the following tips to help you avoid getting ripped off:
* Check out the reseller before agreeing to anything on the phone or online.
* Get the proposal in writing.
* Find out if the reseller has agents licensed to sell real estate where your property is located and verify that they are.
* Get specifics on how the timeshare will be marketed and how you will be updated on progress.
* Request details about fees, timing and how you can get a refund of any advance fees paid – and get that in writing.
UPDATE: FTC attorney William Maxson said: “The FTC’s complaint alleges that the defendants in this case victimized consumers from all walks of life, including a significant number of senior citizens. The FTC is cracking down on timeshare resale scammers. Timeshare resale fraud, however, remains a significant and on-going problem.
“Consumers should use extreme caution when dealing with timeshare resale companies – particularly companies that call consumers in violation of Do Not Call laws. If your phone number is on the Do Not Call Registry and you get an unsolicited call from an unknown company offering to resell or rent your timeshare, hang up and report the call to the FTC.”
THE COURT ORDER:
UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF FLORIDA
Tampa Division
FEDERAL TRADE COMMISSION,
Plaintiff,
v.
VACATION PROPERTY SERVICES, INC.;
VACATION PROPERTY SELLERS, INC. d/b/a
Timeshare Experts; HIGHER LEVEL
MARKETING, INC. d/b/a Vacation Property
Services; ALBERT M. WILSON; DAVID S.
TAYLOR and FRANK M. PERRY, JR.,
Defendants.
Case No. ____________________
COMPLAINT FOR PERMANENT
INJUNCTION & OTHER
EQUITABLE RELIEF
Injunctive Relief Sought
Filed Under Seal
The Federal Trade Commission (“FTC”) alleges as follows:
1. The FTC brings this action under Sections 13(b) and 19 of the Federal Trade
Commission Act (“FTC Act”), 15 U.S.C. §§ 53(b) and 57b, and the Telemarketing and
Consumer Fraud and Abuse Prevention Act (“Telemarketing Act”), 15 U.S.C. §§ 6101 -
6108, to obtain temporary, preliminary, and permanent injunctive relief, rescission or
reformation of contracts, restitution, the refund of monies paid, disgorgement of ill-gotten
monies, and other equitable relief for Defendants’ acts or practices in violation of Section
5(a) of the FTC Act, 15 U.S.C. § 45(a), and in violation of the FTC’s Trade Regulation Rule
entitled “Telemarketing Sales Rule” (“TSR”), 16 C.F.R. Part 310.
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SUMMARY OF THE CASE
2. This case concerns Defendants’ telemarketing scheme that has injured
numerous timeshare property owners across the country. Defendants trick consumers into
paying large up-front fees, typically using one of two deceptive sales pitches. Defendants
represent to consumers that: (1) Defendants have buyers lined up and waiting to buy the
consumers’ timeshare properties; or (2) Defendants will find a buyer for the consumers’
timeshare properties within a short period of time. Regardless of the pitch used, Defendants
demand that consumers pay an up-front fee, ranging from $200 to more than $8,000. After
making the hefty up-front payment, consumers ultimately learn that Defendants have no
buyers lined up to purchase their timeshare properties and that no such buyers are in the
offing.
JURISDICTION AND VENUE
3. This Court has subject matter jurisdiction over this action pursuant to 28
U.S.C. §§ 1331, 1337(a) and 1345, and 15 U.S.C. §§ 45(a) and 53(b). This action arises
under 15 U.S.C. § 45(a).
4. Venue is proper in this district under 28 U.S.C. § 1391(b)-(c) and 15 U.S.C.
§ 53(b).
PLAINTIFF
5. The FTC is an independent agency of the United States government created
by statute. 15 U.S.C. §§ 41-58. The FTC is charged with, inter alia, enforcement of Section
5(a) of the FTC Act, 15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices
in or affecting commerce. The FTC also enforces the Telemarketing Act, 15 U.S.C. §§ 6101-
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6108. Pursuant to the Telemarketing Act, the FTC promulgated and enforces the TSR, 16
C.F.R. Part 310, which prohibits deceptive and abusive telemarketing acts or practices.
6. The FTC is authorized to initiate federal district court proceedings, by its own
attorneys, to enjoin violations of the FTC Act and the TSR, and to secure such equitable
relief as may be appropriate in each case, including rescission or reformation of contracts,
restitution, the refund of monies paid, and the disgorgement of ill-gotten monies. 15 U.S.C.
§§ 53(b), 57b, 6102(c), and 6105(b).
DEFENDANTS
7. Defendant Vacation Property Services, Inc. (“VPS”) is a Florida corporation
with its principal place of business at 7005 4th St. N., Ste. 5, St. Petersburg, FL 33703. VPS
transacts or has transacted business in this district and throughout the United States.
8. Defendant Higher Level Marketing, Inc. d/b/a Vacation Property Services
(“HLM”) is a Florida corporation with its principal place of business at 300 31st St. N., Ste.
615, St. Petersburg, FL 33713. HLM transacts or has transacted business in this district and
throughout the United States.
9. Defendant Vacation Property Sellers, Inc. d/b/a Timeshare Experts
(“Timeshare Experts”) is a Florida corporation with its principal place of business at 300 31st
St. N., Ste. 602, St. Petersburg, FL 33713. Timeshare Experts transacts or has transacted
business in this district and throughout the United States.
10. Defendant Albert M. Wilson is an officer, director and owner of VPS. At all
times material to this Complaint, Defendant Wilson has formulated, directed, controlled, had
the authority to control, or participated in, and had knowledge of, the acts and practices set
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forth in this Complaint. Defendant Wilson resides in this district and, in connection with the
matters alleged herein, transacts or has transacted business in this district and throughout the
United States.
11. Defendant David S. Taylor is a current or former officer and owner of VPS.
Defendant Taylor receives significant proceeds from VPS’s business activities. Defendant
Taylor has formulated, directed, controlled, had the authority to control, or participated in,
and had knowledge of, the acts and practices set forth in this Complaint. Defendant Taylor
resides in this district and, in connection with the matters alleged herein, transacts or has
transacted business in this district and throughout the United States.
12. Defendant Frank M. Perry, Jr. is an officer, director and owner of Timeshare
Experts and HLM. Defendant Perry also was, and may still be, an owner and manager of
VPS. At all times material to this Complaint, Defendant Perry has formulated, directed,
controlled, had the authority to control, or participated in, and had knowledge of, the acts and
practices set forth in this Complaint. Defendant Perry resides in this district and, in
connection with the matters alleged herein, transacts or has transacted business in this district
and throughout the United States.
13. Defendants VPS, HLM and Timeshare Experts (collectively, “Corporate
Defendants”) have operated as a common enterprise while engaging in the deceptive acts and
practices and other violations of law alleged below. The Defendants have conducted the
business practices described below through an interrelated network of companies that, at
various times, shared owners, employees, company logos and letterhead, business practices,
telemarketing licenses, telecommunications providers, Internet providers, expertise, customer
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testimonials, television commercials and telemarketing scripts, and have co-mingled funds in
conducting the deceptive telemarketing campaigns described in this Complaint. Because the
Corporate Defendants have operated as a common enterprise, each of them is jointly and
severally liable for the deceptive acts and practices and violations of law alleged below.
14. Individual Defendants Wilson, Perry and Taylor have formulated, directed,
controlled, had the authority to control, or participated in, and had knowledge of, the acts and
practices of the Corporate Defendants that constitute the common enterprise.
15. At all times material to this Complaint, Defendants have maintained a
substantial course of trade in or affecting commerce, as “commerce” is defined in Section 4
of the FTC Act, 15 U.S.C. § 44.
DEFENDANTS’ BUSINESS ACTIVITIES
Defendants’ Deceptive Sales Practices
16. Since at least 2006, and continuing thereafter, Defendants have engaged in a
plan, program, or campaign to deceptively advertise, market, promote, offer for sale, or sell
timeshare resale services through interstate telephone calls to consumers throughout the
United States.
17. Defendants, directly and through their agents and telemarketers, contact
consumers through unsolicited telemarketing calls. Many of these consumers registered their
phone numbers with the National Do Not Call Registry prior to being called by Defendants.
18. Defendants target consumers who own timeshare properties. Many of
Defendants’ victims are elderly consumers and/or immigrants who speak English as a second
language. Defendants also deceive many other segments of the population.
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19. When contacting a consumer, Defendants often already have information
about the consumer’s timeshare property, such as the property’s location, the amount of
“points” the consumer has banked, and the amount of maintenance fees the consumer must
pay to the property management.
20. In many cases, Defendants’ telemarketers represent to the consumer,
expressly or by implication, that they have a buyer for the consumer’s timeshare property,
and that the sale can be closed within a specified period of time, often within a matter of
weeks. The telemarketer typically tells the consumer the price the purported buyer is willing
to pay for the timeshare property, and often congratulates the consumer for his or her good
fortune.
21. In other cases, Defendants’ telemarketers represent to consumers, expressly or
by implication, that their timeshares are sought-after properties. These telemarketers
typically assure consumers that numerous potential buyers have already contacted
Defendants to express interest in the consumer’s timeshare resort property. Accordingly,
Defendants’ telemarketers frequently promise that these consumers’ timeshares will sell
within a short period of time – often days or weeks.
22. After representing that Defendants will quickly arrange for the sale of the
consumer’s timeshare, the telemarketer frequently tells the consumer that he or she must pay
Defendants a fee in order for the sale to proceed and close. Defendants often represent that
this payment will cover various sale-related costs, such as title searches or document
processing.
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23. If the consumer asks whether Defendants can deduct the fee from the proceeds
that will be owed to the consumer at the time of the sale, the telemarketer responds
negatively. The telemarketers provide various explanations for their answer, including that
such payment arrangements are illegal, against company policy, or may result in the loss of
the telemarketer’s license.
24. When a consumer expresses doubt about the truthfulness of Defendants’ offer,
Defendants’ telemarketers often respond with representations about the legitimacy of
Defendants’ service – such as telling the consumer that Defendants’ industry is heavily
regulated by the FTC and, therefore, Defendants must be “on the up and up.”
25. Defendants’ telemarketers have also assured skeptical consumers that
Defendants’ fee will be refunded if the sale does not close as promised.
26. In many instances in which Defendants claim to have already located a buyer
for the consumer’s timeshare, the telemarketer provides the consumer with details about the
purported buyer, such as the buyer’s name and/or nationality. Defendants’ telemarketers
frequently tell consumers that the purported buyer is foreign.
27. The telemarketers often provide consumers with a timeline for the purported
sale of their timeshare, including the date on which the sale should close and the date on
which the consumer should anticipate receiving a check with the closing proceeds. They
frequently tell consumers that a check with the proceeds from the sale will arrive via FedEx
and instruct the consumers to be at home, with proper ID, on the day the settlement check
arrives in order to receive the check.
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28. The amount of Defendants’ up-front fee varies widely, ranging from $200 to
more than $8,000. Defendants frequently offer to reduce the fee if the consumer expresses
displeasure with the size of the fee.
29. Believing – as they were promised – that Defendants have a buyer for their
timeshare property and/or will have it sold within a short period, and that Defendants’ fee
must be paid up-front in order to assure that the sale will go forward, many consumers agree
to pay Defendants’ fee.
30. After securing credit card payment information or payment by check or other
means, the telemarketer often tells the consumer that he or she will receive a follow-up call
to confirm the payment information. The telemarketer typically states that the follow-up call
will be from Defendants’ “legal department” or “verification department.”
31. In some cases, Defendants’ telemarketers tell consumers that the person
making the follow-up phone call will not know about the purported pending sale and thus
will pose questions to the consumer that are not relevant to the sale.
32. Defendants’ telemarketers often tell consumers that, in order to move forward
with the sale, they must agree to all the statements made by the person making the follow-up
call.
33. The person making the follow-up call typically tells the consumer that he or
she is calling from Defendants’ “legal department” or “verification department,” and
proceeds to quickly run through a series of questions and statements.
34. Defendants’ verifier (the caller on the follow-up call) confirms the consumer’s
personal and payment information, as well as details about the consumer’s timeshare
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property. In many cases, the verifier also quickly informs the consumer of Defendants’
seven-day rescission period and states that Defendants will advertise the timeshare property
until sold, while stating that Defendants cannot guarantee how long it will take to sell the
property, or the price at which it will sell.
35. If the consumer states that he or she does not understand what the verifier has
said, or suggests that the verifier has made statements that differ from the promises made by
the telemarketer concerning the supposedly imminent sale of the consumer’s timeshare, the
verifier typically transfers the consumer back to the telemarketer.
36. In many cases, the telemarketer then tells or reminds the consumer that he or
she must agree to the verifier’s statements in order to ensure that the sale will go forward,
reassuring the consumer that – since the sale of his or her property is imminent – the
verifier’s statements do not apply to the consumer’s situation.
37. In some instances, when questioned about the verifier’s statements regarding
advertising the timeshare, the telemarketer tells the consumer that Defendants previously
advertised his or her resort. As there is already a buyer for the consumer’s property, the
telemarketer explains, Defendants will now move his or her account from “advertising” to
“financing” to reflect the pending sale.
38. In other cases, the telemarketer reassures the consumer that the discussion of
advertising services must be included in the terms of service for legal reasons, due to laws
governing timeshare sales.
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39. After providing reassurances and explanations, the telemarketer often
transfers the consumer back to the verifier, who again quickly runs through the list of
verification questions and statements.
40. Defendants maintain that these “verification” calls are recorded. In numerous
cases, Defendants utilize purported transcripts from these calls when responding to refund
and chargeback requests or consumer complaints filed with state agencies or Better Business
Bureaus (“BBBs”). Defendants do not claim to record the actual sales calls, which are
typically much longer and more detailed than the verification calls.
41. In many cases, after completing the verification process, Defendants place a
brief description of the consumer’s timeshare on one of the websites maintained by
Defendants, such as alllandsales.com, timeshareexperts.com, besttimesharesales.com,
sellingtimeshare.com, soldmytimeshare.com, vacationsbuyowner.com or
rentingtimeshare.com. The brief descriptions typically include basic details about the
consumer’s timeshare, such as location, number of bedrooms and bathrooms, usage terms,
maintenance fees and asking price.
42. Within 10 to 14 days of payment, most consumers receive a confirmation
document. The confirmation document typically includes various details concerning the
sales process and/or the consumer’s timeshare property. The confirmation document also
includes a section entitled “Terms of Advertising Agreement,” which typically states:
(1) Vacation Property Services is a For-Sale-By-Owner advertising
company that is not a real estate broker. This advertising program
involves pooling advertising resources with those of other advertisers
to maximize exposure to potential buyers or renters.
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(2) Vacation Property Services forwards all offers about my timeshare
directly to me and allows me to negotiate the sale of my property
without the involvement of any broker, and without any commission.
(3) Vacation Property Services assumes that my timeshare sells, rents or
exchanges within a SIX-month period unless I advise Vacation
Property Services to the contrary, prior to the expiration date of six
months. Upon notification Vacation Property Services will renew my
advertisement at company expense.
(4) Our refund policy states this is a one time fee with a 7 day right of
rescission from the date your advertisement is listed. After the 7 days
it is only refundable if your property is sold or rented any other way
within 10% of the original price upon proof of sale or rental.
(5) Pursuant to [Florida Statute] 721.20(9)(a), the ratio of the number of
timeshare interests listings for sale versus the number of timeshare
interests sold by Vacation Property Services is zero for each of the
previous two calendar years. Because Vacation Property Services is a
For Sale By Owner timeshare advertising company, it does not obtain,
track, or keep records of sales from its timeshare property
advertisements.
43. Upon reviewing the confirmation document, many consumers immediately
attempt to contact Defendants to obtain a refund, recognizing that the “advertising” terms in
the document do not match the telemarketer’s promise of a quick sale.
44. Other consumers do not react to the confirmation document, either because:
(1) Defendants’ telemarketer promises the consumer that his or her property is not subject to
the typical advertisement agreement because a buyer has already been identified and the
timeshare property will soon be sold; (2) the consumer reviewed the confirmation document
during the initial sales call and was promised by the telemarketer that, notwithstanding the
fact that the terms of service discuss advertising, the fee paid by the consumer to Defendants
will be used to pay fees and expenses necessary for consummation of the promised sale;
(3) the telemarketer told the consumer during the sales call that the property would be
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advertised, while also promising a quick sale – often within days or weeks; or (4) the
consumer managed to speak with the telemarketer, who assured the consumer that the terms
discussed in the confirmation document have no impact on the imminent sale of the
consumer’s timeshare.
45. Consumers frequently receive the confirmation document more than seven
days after paying Defendants’ fee. If consumers become suspicious after carefully reviewing
the terms contained in the confirmation document, any refund request made by a consumer as
a result of such suspicion will be filed more than seven days after the consumer has paid
Defendants’ fee. Indeed, Defendants often deny refund requests as untimely.
46. After Defendants receive their up-front fee from a consumer, they typically
ignore his or her inquiries. When the consumer attempts to contact Defendants by email,
Defendants often ignore the emails or provide boilerplate responses unrelated to the
consumer’s request or inquiry. When the consumer calls their offices, Defendants’
employees frequently tell the consumer that the telemarketer in charge of his or her
transaction is unavailable. Defendants’ employees repeatedly tell consumers seeking postpayment
assistance that the telemarketer in charge of their transaction is “out of the office,”
“sick,” “in the field,” “in a meeting,” etc. Likewise, Defendants rarely respond to
consumers’ post-payment voicemails and messages.
47. Defendants also stymie any attempt to obtain refunds, including attempts
made well within Defendants’ seven-day cancellation period, by, among other stalling
tactics: (1) refusing to permit cancellation via email, phone call or fax; (2) refusing to provide
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consumers with a written address for cancellation letters; (3) refusing to acknowledge receipt
of cancellation letters; and/or (4) refusing to respond to calls and emails, as discussed above.
48. When a consumer succeeds in contacting the relevant telemarketer within
Defendants’ cancellation period, the telemarketer often attempts to convince the consumer to
forgo the refund request by assuring him or her that the promised sale of the timeshare will
proceed as planned.
49. The promised date for the sale of the timeshare property, or the date by which
Defendants promised to locate a buyer, typically passes without any contact from Defendants
and without a sale of the timeshare property or identification of a real buyer.
50. When consumers realize they have been deceived, they often seek refunds
directly from Defendants and/or initiate chargebacks with their credit cards companies.
51. Consumers have also logged hundreds of complaints against Defendants with
law enforcement agencies and BBBs.
52. When credit card companies contact Defendants regarding a chargeback
request, or BBBs contact them regarding consumer complaints, Defendants typically deny
that they made any promises regarding locating buyers or the time that it would take to sell
the consumer’s timeshare property.
53. Defendants typically respond to refund requests initiated through consumers’
credit card companies or BBBs by stating that Defendants’ fee is non-refundable after seven
days and claiming that their service is limited to posting an online advertisement for the
consumer’s timeshare property, “just like a newspaper.”
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54. Defendants typically produce a copy of their confirmation document to the
credit card company or the BBB, citing the terms of service as proof of the consumer’s
agreement to pay for Defendants’ services. Defendants often present the document as proof
that the consumer was on notice regarding their seven-day rescission policy.
55. In many cases, Defendants provide, or offer to provide, the credit card
company or the BBB a purported transcript of the brief verification call. Frequently,
Defendants produce a template of a verification call script, instead of the actual transcript.
56. In many instances, Defendants rely upon the confirmation document and the
purported verification transcript (or the template of a verification script) to defeat consumer
chargeback challenges.
57. Consumers’ attempts to obtain refunds directly from Defendants are similarly
futile. Even when the consumer repeatedly contacts Defendants to cancel the transaction
within seven days of payment, Defendants often fight or ignore the consumer’s request, a
contravention of Defendants’ own “terms of service.”
Prior Enforcement
58. In July 2007, HLM entered into an assurance of voluntary compliance
(“AVC”) with the Office of the Attorney General of Florida (“Florida AG”) to settle
allegations that it made false promises to consumers, including promises that HLM “had a
buyer or renter already identified for the [consumer’s] timeshare.” HLM agreed that it would
not engage in various unlawful practices, such as making calls to consumers listed on the
National Do Not Call Registry and making false and misleading promises to consumers when
pitching HLM’s timeshare resale services. HLM agreed to pay $7,500 to the Florida
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Department of Legal Affairs Revolving Trust Fund and refunded $10,223.50 to consumers.
Defendant Perry signed the AVC on behalf of HLM.
59. In March 2008, VPS entered into a similar AVC with the Florida AG to settle
allegations that it made false promises to consumers, including promises that VPS “had a
buyer or renter already identified for the [consumer’s] timeshare.” VPS promised that it
would not call consumers listed on the National Do Not Call Registry or make false or
misleading statements about its timeshare resale services. VPS agreed to pay $15,000 to the
Florida Department of Legal Affairs Revolving Trust Fund and refunded $12,266.50 to
consumers. VPS further agreed to escrow $10,000 for any unidentified refund requests made
prior to the effective date of the AVC. Defendant Wilson signed the AVC on behalf of VPS,
and also in his personal capacity.
SECTION 5 OF THE FTC ACT
60. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits “unfair or deceptive
acts or practices in or affecting commerce.”
61. Misrepresentations or deceptive omissions of material fact constitute
deceptive acts or practices prohibited by Section 5(a) of the FTC Act.
THE TELEMARKETING ACT AND THE TELEMARKETING SALES RULE
62. Congress directed the FTC to prescribe rules prohibiting abusive and
deceptive telemarketing acts or practices pursuant to the Telemarketing Act, 15 U.S.C.
§§ 6101-6108. The FTC adopted the original TSR in 1995, extensively amended it in 2003,
and amended certain provisions thereafter. 16 C.F.R. Part 310.
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63. It is a deceptive telemarketing act or practice, and a violation of the TSR, for
any seller or telemarketer to make a false or misleading statement to induce a person to pay
for goods or services or to induce a charitable contribution. 16 C.F.R. § 310.3(a)(4).
64. It is a deceptive telemarketing act or practice, and a violation of the TSR, for
any seller or telemarketer to misrepresent any material aspect of the nature or terms of the
seller’s refund, cancellation, exchange, or repurchase policies. 16 C.F.R. § 310.3(a)(2)(iv).
65. Among other things, amendments made to the TSR in 2003 established a donot-
call registry (the “National Do Not Call Registry”), maintained by the FTC, of consumers
who do not wish to receive certain types of telemarketing calls. Consumers can register their
telephone numbers on the National Do Not Call Registry without charge either through a tollfree
telephone call or over the Internet at donotcall.gov.
66. Consumers who receive telemarketing calls to their registered numbers can
complain of National Do Not Call Registry violations the same way they registered, through
a toll-free telephone call or over the Internet at donotcall.gov, or by otherwise contacting law
enforcement authorities.
67. The FTC allows sellers, telemarketers, and other permitted organizations to
access the National Do Not Call Registry over the Internet at telemarketing.donotcall.gov, to
pay the fee(s) if required, and to download the numbers not to call.
68. The TSR prohibits sellers and telemarketers from calling any telephone
number within a given area code unless the seller on whose behalf the call is made has paid
the annual fee for access to the telephone numbers within that area code that are included in
the National Do Not Call Registry. 16 C.F.R. § 310.8.
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69. Under the TSR, an “outbound telephone call” means a telephone call initiated
by a telemarketer to induce the purchase of goods or services or to solicit a charitable
contribution. 16 C.F.R. § 310.2(v).
70. The TSR prohibits sellers and telemarketers from initiating an outbound
telephone call to numbers on the National Do Not Call Registry. 16 C.F.R.
§ 310.4(b)(1)(iii)(B).
71. The TSR prohibits sellers and telemarketers from initiating an outbound
telephone call to any consumer when that consumer previously has stated that he or she does
not wish to receive an outbound telephone call made by or on behalf of the seller whose
goods or services are being offered, or made by or on behalf of the charitable organization
for which a charitable contribution is being solicited. 16 C.F.R. § 310.4(b)(1)(iii)(A).
72. Pursuant to Section 3(c) of the Telemarketing Act, 15 U.S.C. § 6102(c), and
Section 18(d)(3) of the FTC Act, 15 U.S.C. § 57a(d)(3), a violation of the TSR constitutes an
unfair or deceptive act or practice in or affecting commerce, in violation of Section 5(a) of
the FTC Act, 15 U.S.C. § 45(a).
Defendants’ Disregard for Do Not Call Rules
73. Defendants are “sellers” and “telemarketers” engaged in “telemarketing,” as
defined by the TSR, 16 C.F.R. § 310.2.
74. Defendants are sellers of timeshare resale services to consumers. Defendants
have called consumers in the United States to induce the purchase of Defendants’ services.
75. Defendants are also telemarketers that initiate outbound telephone calls to
consumers in the United States to induce the purchase of Defendants’ services.
Case 8:11-cv-00595-JDW-MAP Document 1 Filed 03/22/11 Page 17 of 22 PageID 17
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76. Defendants have engaged in telemarketing by a plan, program, or campaign
conducted to induce the purchase of goods or services by use of one or more telephones and
which involves more than one interstate telephone call.
77. Defendants have called consumers’ telephone numbers that are on the
National Do Not Call Registry without limiting such calls to persons who had previously
purchased or inquired about Defendants’ products or services.
78. Defendants have called telephone numbers in various area codes without first
paying the annual fee for access to the telephone numbers within such area codes that are
included in the National Do Not Call Registry.
79. From November 2009 to November 2010, Defendants initiated more than
292,000 telephone calls to telephone numbers of persons who had placed their numbers on
the National Do Not Call Registry prior to being called by Defendants.
COUNT I
Deceptive Telemarketing Calls in Violation of the FTC Act
80. In numerous instances, in connection with the advertising, marketing,
promotion, offering for sale, or sale of timeshare resale services, Defendants have
represented, directly or indirectly, expressly or by implication, that:
A. Defendants have located a buyer for the consumer’s timeshare
property who has agreed to pay a specified price or that Defendants
will quickly sell the consumer’s timeshare;
B. Defendants will refund their fee to the consumer if the promised sale
does not take place; and
Case 8:11-cv-00595-JDW-MAP Document 1 Filed 03/22/11 Page 18 of 22 PageID 18
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C. Defendants will refund their fee to the consumer if the consumer
requests to rescind payment within seven days of the first appearance
of the consumer’s advertisement on one of Defendants’ websites.
81. In truth and in fact, in numerous instances in which Defendants have made the
representations set forth in Paragraph 80 of this Complaint:
A. Defendants have not located a buyer for the consumer’s timeshare
property who will pay a specified price and Defendants do not quickly
sell the timeshare;
B. Defendants do not refund their fee to the consumer if the promised sale
fails to occur; and
C. Defendants refuse to refund their fee, even if the consumer requests
rescission within seven days of the first appearance of the consumer’s
advertisement on one of Defendants’ websites.
82. Therefore, Defendants’ representations, as set forth in Paragraph 80 of this
Complaint, are false and misleading and constitute deceptive acts or practices in or affecting
commerce in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
COUNT II
Deceptive Telemarketing Calls in Violation of the TSR
83. In numerous instances, in the course of telemarketing their goods and
services, Defendants have made false or misleading statements, directly or by implication, to
induce consumers to pay for goods or services, including, but not limited to,
misrepresentations that:
Case 8:11-cv-00595-JDW-MAP Document 1 Filed 03/22/11 Page 19 of 22 PageID 19
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A. Defendants have located a buyer for the consumer’s timeshare
property who has agreed to pay a specified price or that Defendants
will quickly sell the consumer’s timeshare;
B. Defendants will refund their fee to the consumer if the promised sale
does not take place; and
C. Defendants will refund their fee to the consumer if the consumer
requests to rescind payment within seven days of the first appearance
of the consumer’s advertisement on one of Defendants’ websites.
84. Defendants’ acts or practices, as described in Paragraph 83 above, are
deceptive telemarketing acts or practices that violate the TSR, 16 C.F.R. §§ 310.3(a)(2)(iv)
and 310.3(a)(4).
COUNT III
Violating the National Do Not Call Registry
85. In numerous instances, in connection with telemarketing, Defendants initiated
or caused others to initiate an outbound telephone call to a person’s telephone number on the
National Do Not Call Registry in violation of the TSR, 16 C.F.R. § 310.4(b)(1)(iii)(B).
COUNT IV
Failing to Pay National Registry Fees
86. In numerous instances, in connection with telemarketing, Defendants have
initiated, or caused others to initiate, an outbound telephone call to a telephone number
within a given area code when Defendants had not, either directly or through another person,
paid the required annual fee for access to the telephone numbers within that area code that
are included in the National Do Not Call Registry, in violation of the TSR, 16 C.F.R. § 310.8.
Case 8:11-cv-00595-JDW-MAP Document 1 Filed 03/22/11 Page 20 of 22 PageID 20
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CONSUMER INJURY
87. Consumers have suffered, and will continue to suffer, substantial injury as a
result of Defendants’ violations of the FTC Act and the TSR. In addition, Defendants have
been unjustly enriched as a result of their unlawful acts or practices. Absent injunctive relief
by this Court, Defendants are likely to continue to injure consumers, reap unjust enrichment,
and harm the public interest.
THIS COURT’S POWER TO GRANT RELIEF
88. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court to
grant injunctive and such other relief as the Court may deem appropriate to halt and redress
violations of any provision of law enforced by the FTC. The Court, in the exercise of its
equitable jurisdiction, may award ancillary relief, including rescission or reformation of
contracts, restitution, the refund of monies paid, and the disgorgement of ill-gotten monies, to
prevent and remedy any violation of any provision of law enforced by the FTC.
89. Section 19 of the FTC Act, 15 U.S.C. § 57b, and Section 6(b) of the
Telemarketing Act, 15 U.S.C. § 6105(b), authorize this Court to grant such relief as the Court
finds necessary to redress injury to consumers resulting from Defendants’ violations of the
TSR, including the rescission or reformation of contracts, and the refund of money.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff FTC, pursuant to Sections 13(b) and 19 of the FTC Act, 15
U.S.C. § 53(b) and 57b, Section 6(b) of the Telemarketing Act, 15 U.S.C. § 6105(b), and the
Court’s own equitable powers, requests that the Court:
Case 8:11-cv-00595-JDW-MAP Document 1 Filed 03/22/11 Page 21 of 22 PageID 21
Case 8:11-cv-00595-JDW-MAP Document 1 Filed 03/22/11 Page 22 of 22 PageID 22
A. Award Plaintiff such preliminary injunctive and ancillary relief as may be
necessary to avert the likelihood of consumer injury during the pendency of
this action and to preserve the possibility of effective final relief, including,
but not limited to: temporary and preliminary injunctions, an order freezing
assets, immediate access, and the appointment of a receiver;
B. Enter a permanent injunction to prevent future violations of the FTC Act and
the TSR by Defendants;
C. Award such relief as the Court finds necessary to redress injury to consumers
resulting from Defendants' violations of the FTC Act and the TSR, including,
but not limited to, rescission or reformation of contracts, restitution, the refund
of monies paid, and the disgorgement of ill-gotten monies; and
D. Award Plaintiff the costs of bringing this action, as well as such other and
additional relief as the Court may determine to be just and proper.
Dated: March 22, 2011
22
RespectwlJr submitted,
'W //// / \"~~"\
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j t f
Dotan Weinman
FEDERAL TRADE COMMISSION
600 Pennsylvania Ave, N.W.
Mailstop H-286
Washington, DC 20580
(202) 326-2635 (Maxson phone)
(202) 326-3049 (Weinman phone)
(202) 326-3395 (facsimile)
wmaxson@ftc.gov
dweinman@ftc.gov
Attorneys for Plaintiff Federal Trade
Commission
FTC STATEMENT ON TIMESHARE FRAUD:
Court Shutters Telemarketers Peddling Bogus Timeshare Resales, Robert Paisola Reports for Reuters
Defendants Allegedly Claimed They Could Find Timeshare Buyers
At the Federal Trade Commission’s request, a federal district court has issued a temporary restraining order against a Florida-based telemarketing scheme that allegedly tricked timeshare owners who sought to sell their timeshare properties.According to the FTC’s complaint, since at least 2006, Vacation Property Services, Inc., two related companies, and their three principals have made tens of thousands of unsolicited telemarketing calls to timeshare owners claiming that they could quickly find buyers for the owners’ timeshares. The defendants allegedly trick consumers into paying large up-front fees, typically using one of two deceptive sales pitches – that they have buyers lined up and waiting to buy the timeshare properties or that they will find a buyer for the timeshare properties within a short period of time. Regardless of the pitch used, the defendants demand that consumers pay an up-front fee, ranging from $200 to more than $8,000.
The FTC alleged that after making the hefty up-front payment, consumers ultimately learned the defendants had no buyers lined up to purchase their timeshare properties and no such buyers were in the offing. And, when consumers realized they had been duped, the defendants routinely dodged consumers’ phone calls and denied their refund requests.
The FTC’s complaint charges the defendants with violating the FTC Act and the Telemarketing Sales Rule by misrepresenting their refund policies and the existence of potential buyers. The complaint also charges the defendants with calling hundreds of thousands of consumers between November 2009 and November 2010 whose phone numbers are on the FTC’s Do Not Call Registry.
The FTC is seeking to permanently stop the defendants’ allegedly illegal conduct and to provide money back to consumers who were harmed by their violations of the FTC Act and Telemarketing Sales Rule.
The Commission vote authorizing the staff to file the complaint was 5-0. It was filed on March 22, 2011, under seal, in the U.S. District Court for the Middle District of Florida, Tampa Division. In addition to Vacation Property Services, Inc., the complaint names Vacation Property Sellers, Inc., doing business as (d/b/a) Timeshare Experts; Higher Level Marketing, Inc., d/b/a Vacation Property Services; Albert M. Wilson; David S. Taylor; and Frank M. Perry, Jr.
The FTC would like to thank the following organizations for their help in bringing this case: The U.S. Postal Inspection Service, Tampa, Florida, Division; The Office of the Attorney General, Florida; the Florida Department of Agriculture and Consumer Services, the Better Business Bureau of West Florida; and the St. Petersburg, Florida, Police Department.
Consumer Education
This case is part of an ongoing FTC effort to crack down on con artists who use fraud and deception to take advantage of consumers hit by the recent economic downturn. Timeshare resale scams promise enticing rewards for consumers, according to the agency. First, they deceptively offer the return of the consumer’s principal investment in the timeshare property, often with a substantial profit. They also seemingly offer a way out of timeshare loan payments and mandatory maintenance fees, which can range from several hundreds to several thousands of dollars a year. In a time of high unemployment and reduced access to credit, these twin promises can be alluring to consumers caught in difficult economic straits.
The FTC has a new publication on how to avoid pitfalls when selling a timeshare unit, Selling a Timeshare Through a Reseller: Contract Caveats. The FTC also recently filed a similar complaint against another group of defendants known as Timeshare Mega Marketing.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics. “Like” the FTC on Facebook and “follow” us on Twitter.
- MEDIA CONTACT:
- Mitchell J. Katz Office of Public Affairs 202-326-2161
- STAFF CONTACT:
- William Maxson, Bureau of Consumer Protection 202-326-2635
(Vacation PS.final)
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