Twin Cities region continues to be claimed as home for foreign fraudsters
Burnsville, Minnesota – August 25, 2014 – Timeshare reselling schemes continue to plague the marketplace and just two recent cases have defrauded victims out of more than $40,000 and $20,000, respectively. Better Business Bureau of Minnesota and North Dakota (BBB) regularly receives inquiries about, and helps uncover, bogus timeshare reselling firms claiming addresses in the Twin Cities. Though these entities look legitimate at first glance, a closer review of their operations reveals they are not actually located here and exist solely to defraud consumers.
“Timeshare reselling scams have really ramped up in recent years,” said Dana Badgerow, president and CEO of BBB of Minnesota and North Dakota. “People who own timeshares should understand they’re dealing with professionals. Recently, a consumer’s attorney reviewed an agreement sent by one of these fraudulent entities. Even the attorney stated the documents looked legitimate.”
In most cases of this type of fraud, timeshare owners receive calls from individuals claiming to represent companies which had secured buyers or renters for their timeshares. The callers are told there will be no upfront fees. However, after receiving official-looking contracts, consumers are eventually informed they have to wire escrow funds to Mexico – or money to cover transfer fees, closing costs and/or taxes and liens – in order to close the deal. Upon wiring the funds as requested, customers are then usually told that still more unexpected costs have arisen and they will need to wire yet more money to complete the transaction. This process often continues until consumers realize something is amiss.
Just some of the fraudulent entities – claiming addresses in our area – which BBB has uncovered in recent months are: Business Events International, Century Title Escrow Inc., Corporate Services International Group and Financial Planning 2Go. More recently, BBB has learned Minne Realty Services and NSR Services, Inc. are not legitimate timeshare resellers.
BBB advises people looking to sell their timeshare properties to always:
- Be wary. If you currently own a timeshare and are approached by a company saying they have buyers or renters lined up, exercise caution.
- Investigate. Don’t be dazzled by a fancy website or one that has photos of exotic locales. Creating websites is fairly easy. Use a business you can trust by accessing free BBB Business Reviews at bbb.org.
- Look for an established track record. Does the company have a history or did they just “pop up on radar”?
- Watch out for upfront fees and requests to wire funds. Remember, unless it’s negotiated into the purchase agreement, only buyers pay closing costs. Many complaints to the BBB regarding supposed timeshare reselling entities involve situations where people were told they needed to wire "escrow funds," or that they just had to pay taxes or closing costs and their timeshare would be rented or sold. Never wire money to someone you don’t know.
- Confirm licensing requirements - Verify where the company is located and in what states it does business. Ask if the company's salespeople are licensed to sell real estate where your timeshare is located. If so, confirm that with the state licensing board.
- Get the facts on the figures - Find out if the business charges a commission. Do they handle the entire closing and provide escrow services? Do they charge an upfront listing or advertising fee? What does it cover and is it refundable?
- Don't fall for an offer that sounds too good to be true - Don't agree to anything over the phone but instead ask the salesperson to send you written materials; take the time to do your research and don't allow yourself to be pressured. Remember, scammers have gotten very good at creating official-looking contracts.
- Watch out for third-party companies. Fraudulent timeshare reselling entities often associate with alleged third-party title or escrow services in an effort to appear more legitimate. Be sure to research those companies as well. If you can't find any information on them, it could be a sign there's a problem.
- Be realistic. In regard to timeshares, it’s generally a buyer’s – not a seller’s – market. Unscrupulous timeshare resellers may claim that your property is in demand and they can sell it immediately; unfortunately, these promises often prove to be false.