The Timeshare Resale Accountability Act was passed by the Florida Legislature in the spring. It was a top priority of state Attorney General Pam Bondi, who took office in January 2011 and said her office was immediately besieged with complaints about timeshare fraud.
“We cannot allow unscrupulous individuals to mislead and defraud our consumers, many of whom have invested their life savings in a dream home,” Bondi said at a press conference in October 2011 when she unveiled the bill.
In particular, the complaints came from owners of timeshares who were desperate to sell the unit in a rough economy. After listing their property, the sellers got calls from telemarketing firms claiming to be well-established timeshare resale companies.
In many instances, though, these firms would claim to have a buyer lined up to purchase their timeshare, as long as the seller could pay an up-front fee – often times ranging between $750 and $3,000.
Once the fee was paid, usually by credit card, the seller never heard from the firm again.
“If it’s too good to be true, it probably is,” Bondi said, while adding that her proposed legislation would give timeshare sellers seven days to cancel an agreement with a resale company, while also making it illegal to pay brokerage fees.
The law also requires greater disclosure on the resale agreement in a clear 12-point font, and makes it a crime to mislead a timeshare owner about the firm’s ability to find a buyer.
The measure imposes penalties of up to $15,000 per violation.
The new law goes into effect on July 1, and applies to any Florida timeshare advertiser. It would also cover calls into Florida by out-of-state advertisers.
To protect consumers, the law requires signed contracts before a client’s credit card can be charged, and establishes a time frame for any client to cancel services for a full refund.
Sales people can be held criminally liable for the fraud, and would no longer have the ability to jump to another company to avoid prosecution.
The bill was sponsored in the Legislature by state Sen. Andy Gardiner, R-Orlando, who told fellow lawmakers during debate on the bill that this was a serious consumer fraud problem that needed to be addressed.
“What happens is the individual receives that money — and the timeshare isn’t sold,” Gardiner said.
Bondi’s office has said the number of timeshare resale complaints her office gets exceeds nearly 7,000 each year, more than all the other fraud areas combined.
Seth Nock, owner and president of Selling Timeshares, Inc., said this bill would help legitimate timeshare resale companies by eliminating the scam artists from the field.
“We are seeing companies that promise way over market value for their clients’ ownerships and charge an exorbitant fee just to list, when our licensed agents will list your ownership at no cost, and give you an honest answer on what the ownership is really worth,” Nock said.
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