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SCAM: Timeshare Victims Compensation Fund

Consumer Defense Resource Group

Summary. There is a scam currently being perpetrated against people who have lost money through timeshare frauds. The perpetrators apparently have obtained a list of names and contact information for people who lost money. So, when the unsuspecting victim receives a phone call, they assume it must be legitimate since the caller appears to know things that only an official government agency or financial institution would know.

How We Learned of the Scam. ResourcesForLife.com became aware of this scam because the crime syndicate, operating in Florida, is fraudulently telling people they are the Consumer Defense Resource Group or CDRG (the name of our consumer advocacy group). We were told by one victim that the perpetrator said they are a branch office of the ResourcesForLife.com CDRG. In our investigation, when calling the only known number for these people, they indeed answered the phone “CDRG” and claim to be the Consumer Defense Resource Group.

How the Scam Works. As explained above, victims of timeshare fraud are being contacted. Apparently some funds are being dispersed, perhaps to establish the victim’s trust prior to stealing their money. Typically a deposit/credit is placed on the victim’s credit card. This gives the victim false security that they will get more money after paying a 35% recovery fee. In reality, the deposit/credit is reversed after the crime syndicate receives cash through Western Union or a bank transfer.

Timeshare Victims Compensation Fund. The perpetrators of this scam claim that there is a Timeshare Victims Compensation Fund. If you do a Google search for Timeshare Victims Compensation Fund, you’ll notice that no official government website shows up with any information about such a fund.

The FBI and other federal agencies, along with local law enforcement and the Florida Attorney General are taking action on the above criminal activity. If you have been the victim of fraud, or have any information about the above scam, please contact the FBI and Florida Attorney General’s office as described below.

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The following information is from an FBI notice on 15 January 2012 [source] which was also posted on the IC3.gov website:

FBI Warns Consumers of Timeshare Marketing Scams

01/25/12—Timeshare owners across the country are being scammed out of millions of dollars by unscrupulous companies that promise to sell or rent the unsuspecting victims’ timeshares. In the typical scam, timeshare owners receive unexpected or uninvited telephone calls or e-mails from criminals posing as sales representatives for a timeshare resale company. The representative promises a quick sale, often within 60-90 days. The sales representatives often use high-pressure sales tactics to add a sense of urgency to the deal. Some victims have reported that sales representatives pressured them by claiming there was a buyer waiting in the wings, either on the other line or even present in the office.

Timeshare owners who agree to sell are told that they must pay an upfront fee to cover anything from listing and advertising fees to closing costs. Many victims have provided credit cards to pay the fees ranging from a few hundred to a few thousand dollars. Once the fee is paid, timeshare owners report that the company becomes evasive—calls go unanswered, numbers are disconnected, and websites are inaccessible.

In some cases, timeshare owners who have been defrauded by a timeshare sales scheme have been subsequently contacted by an unscrupulous timeshare fraud recovery company as well. The representative from the recovery company promises assistance in recovering money lost in the sales scam. Some recovery companies require an up-front fee for services rendered, while others promise no fees will be paid unless a refund is obtained for the timeshare owner. The IC3 (Internet Crime Complaint Center) has identified some instances where people involved with the recovery company also have a connection to the resale company, raising the possibility that timeshare owners are being scammed twice by the same people.

If you are contacted by someone offering to sell or rent your timeshare, the IC3 recommends using caution. Listed below are tips you can use to avoid becoming a victim of a timeshare scheme:

Be wary if a company asks you for up-front fees to sell or rent your timeshare.
Read the fine print of any sales contract or rental agreement provided.
Check with the Better Business Bureau to ensure the company is reputable.
To obtain more information on Internet schemes, visit www.LooksTooGoodToBeTrue.com.

Anyone who believes they have been a victim of this type of scam should promptly report it to the IC3’s website at www.IC3.gov. The IC3’s complaint database links complaints together to refer them to the appropriate law enforcement agency for case consideration.

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The following notice was posted on the Florida Attorney General website as of 9 March 2012, but has subsequently been removed. Only the print version remains on the site.

Florida Attorney General Takes Action Against Timeshare Fraud

March 9, 2012
Media Contact: Jenn Meale
Phone: (850) 245-0150

Attorney General Pam Bondi Announces Lawsuits and Arrests Against Timeshare Resale Fraud Companies and Owners

TALLAHASSEE, Fla.–Attorney General Pam Bondi today announced that her office has partnered with the Delray Beach Police Department to arrest two individuals for illegal activity related to timeshare resale fraud and that she has sued the individuals and the timeshare resale companies.

The lawsuit is filed against William Clarke, P.A., and its owner, Gerald W. Clarke; and Provident Choice, LLC, and its owner, Nicholas Paul. The Delray Beach Police Department assisted with the investigation into William Clark, P.A., and Provident Choice, LLC, and they arrested Gerald Clarke and Nicholas Paul.

The lawsuit alleges that G. William Clarke, P.A., Provident Choice, LLC, Gerald W. Clarke, and Nicholas Paul were operating as unlicensed telemarketers, targeting consumers who were previous victims of timeshare resale fraud. The defendants collected up-front fees ranging from $400 to $4,000 and promised to assist consumers with obtaining refunds from a non-existent state restitution fund. Additionally, the companies claimed to be working with various state agencies, including the Attorney General’s Office.

The investigation into G. William Clarke, P.A. and Provident Choice, LLC, was a joint effort between the Attorney General’s Office and the Delray Beach Police Department. Arrest warrants for criminal violations were executed upon the business owners at the time they were served with the civil lawsuits and orders for temporary injunction.

As a result of the Attorney General’s action, G. William Clarke, P.A, Provident Choice, LLC, Gerald W. Clarke and Nicholas Paul are prohibited from engaging in any type of timeshare resale or recovery business until further order of the court. The Attorney General’s lawsuit seeks a permanent injunction prohibiting the Defendants from any timeshare related business, restitution on behalf of all victimized consumers, civil penalties of $10,000 to $15,000 for each violation of Florida’s Deceptive and Unfair Trade Practices Act and the Florida’s Telemarketing Act, and reimbursement for fees and costs related to the investigation.

Consumers should remain vigilant and be aware:

The Office of the Attorney General does not make attempts to contact consumers through telemarketing cold calls. If a consumer wishes to check on any organization or person claiming to be employed by or to be associated with the Office of the Attorney General, consumers may check these statements by contacting our Consumer Hotline 24 hours a day, 7 days a week at 1-866-966-7226 from within FL, or 1-850-414-3990 from outside of Florida.

Consumers who transacted with timeshare resale marketing or timeshare recovery companies should be aware that there is no governmental restitution fund, victim’s compensation fund or government grant for monies for victims of timeshare resale fraud. Some telemarketers imply or even falsely allege they were hired to work for, with, or on behalf of the Florida Attorney General’s Office. It is important to note that the Florida Attorney General’s Office conducts its own investigations and does not work with outside companies, organizations, attorneys, or consumer advocate groups when investigating or litigating any cases. Consumers may file a complaint with our office for free by contacting the Consumer Hotline stated above or online at our website at www.myfloridalegal.com.

Consumers should also be aware that if our office is successful in obtaining restitution for victims, no advance fee of any kind is required. Our Office makes every attempt to identify, locate, and contact potential victims and to insure restitution is paid directly to the victim without any charge. Consumers should be cautious anytime that they are pressured into quickly sending an advanced payment to anyone. Payments made via certified checks, wire transfers, and money orders are similar to submitting cash and do not typically offer the same fraud protections as many other payment options.

Consumers who have been contacted by any person or entity falsely claiming to be associated with our office should note the name, address, and telephone number along with any other identifying information of those making this claim and file a complaint with the Attorney General’s Office.

By Greg Johnson

Greg Johnson is a freelance writer and tech consultant in Iowa City. He is also the founder and Director of the ResourcesForLife.com website. Learn more at AboutGregJohnson.com