INDIANAPOLIS — The Better Business Bureau issued a warning Friday about bogus businesses tricking people into paying thousands of dollars of their hard earned money.
Scammers pose as timeshare resale companies and deceive consumers by asking them to pay closing fees and taxes to sell their properties.
Jenny Allee of Cloverdale has owned a timeshare in Branson, Missouri for four years.
"We don't use it that much," Allee said. "Timeshares are very expensive. The maintenance fees I pay every year are so much where I could take a really nice vacation."
Allee went online to research how to sell her timeshare, and soon after, she got a phone call.
"They said 'hey, we would love to sell your timeshare and we have people in line waiting to buy it,'" Allee said.
Allee did some research and learned it was a legitimate, well-known company.
So when they asked her to wire advertising and legal fees, she did it.
"That should have been a red flag, but I ignored it because I was really looking forward to not having to deal with this timeshare every year," Allee said.
When the timeshare company said they found a buyer for Allee's timeshare, they asked her for a contingency deposit which she'd get back within seven days.
"They blocked me completely, and then I couldn't reach them at that point," Allee said.
It turns out the timeshare company was an imposter, a fake and a phony.
Now, Jenny Allee is out $4,100.
"It makes me feel like an idiot," Allee said. "It makes me feel terrible. That means bills could maybe not get paid if I never see that money again."
Allee filed a complaint with the Better Business Bureau in the hopes of getting her money back.
BBB Central Indiana President and CEO Tim Maniscalo said the timeshare resell scam is growing as many Hoosiers look to unload their properties.
"There's so many timeshares, and you can rent without owning it for much less than it costs to do the maintenance fees, so it's really an overbuilt market at this point," Maniscalo said.
It's such a concern, the BBB launched an investigation and found bogus companies claiming to operate in Central Indiana.
D & W International Holdings, a timeshare closing company, claimed to be located in downtown Indianapolis but when Call 6 Investigates stopped by the company did not exist.
"They were buying timeshares from people, but it wasn't really a legitimate business, but they were just trying to get fees and things like that out of people," Maniscalo said.
BBB issued a warning to consumers to use extreme caution when attempting to sell timeshares through D&W International Closings and Sunrise VP Solutions, which claims to be located in Nashville, Tennessee.
BBB investigations in Indiana and Tennessee found that neither business is at the locations listed on their websites. The Indiana Secretary of State has no record of any companies operating as D&W International Closings, according to the BBB.
Victims told the BBB they received a call from VP Sunrise Solutions offering to purchase their timeshare in Mexico.
After they negotiated a sale price and provided victims an offer in the form of a "Certified Agreement" signed by both parties, victims were referred to a closing agent — D&W International Closings.
Once consumers were transferred to D&W International Closings, they were provided with various forms of documentation via email.
The business informed customers that a closing fee, ranging anywhere from $1,000 to $4,000, was required to finalize the purchase of their timeshare.
The bogus companies then asked consumers to pay taxes allegedly owed to the Mexican government, transfer fees, title fees, brokerage fees, and registry of foreign investment fees, among others.
According to BBB Scam Tracker reports and consumer complaints, both companies used several aliases when trying to convince customers, and also used fraudulent or stolen real estate licensing information, records show.
When victims stopped paying the fraudulent fees, D&W stopped responding to questions, said the BBB.
This scam has happened in at least seven states in the United States and Canada, resulting in consumer losses of more than $242,000.
"The timeshare reselling industry is full of scammers," said Tim Maniscalo, BBB Central Indiana President and CEO. "Before enlisting any timeshare broker service, it's critical for timeshare sellers to thoroughly research potential brokers and ensure they are properly licensed."
Maniscalo said scammers could easily switch names or use the names of legitimate companies, so it's essential to look for red flags rather than focus on the name of the company.
"If they ask for unusual forms of payment such as a wire transfer, that's a red flag it's probably not a legitimate company," said Maniscalo.
As for Jenny Allee, she's not hopeful of getting her money back but wants to warn others about timeshare scams.
"I want people to be very skeptical, do your research," said Allee. "Make sure you know who you're dealing with before you ever send that money. And never wire money."
Tips to avoid timeshare resale scams:
- Research potential buyers and closing agents by viewing their business profiles at bbb.org or by calling 317-488-2222.
- Search BBB’s Scam Tracker database.
- Avoid businesses that request an upfront fee.
- Contact the resort or organization that originally sold the timeshare to see if they have knowledge of any ongoing scams.
- Check with your state’s real estate commission or other licensing board to ensure that the individuals you are working with are properly licensed or in possession of the necessary credentials.
- Look for businesses that provide a physical address (a PO box is not sufficient).
- Do not wire monies to any oversea banks.
- Avoid doing business with buyers who refuse to meet in-person.
If you’ve been scammed:
- File a complaint with the Federal Trade Commission (FTC), as well as the state’s Attorney General.
- Submit complaints and reviews to the Better Business Bureau and submit tips through BBB Scam Tracker.
- Consumers approached through the internet may want to file a complaint with IC3 (FBI’s Internet Crime Complaint Center).