Timeshare Scam

Suspects may account for 90% of timeshare fraud in the Costa del Sol area in recent years.

On Friday, police in Spain announced that they had captured several individuals accused of timeshare fraud. The profits generated from these scams amount to more than 18 million euros. Though allegedly masterminded by an expatriate South African, this gang is known for its ties to British criminal elements operating in Tenerife as well as the UK.

Authorities claim that 90% of timeshare fraud on the Costa del Sol can be directly attributed to this organization, which operated behind more than 300 businesses.

While these arrests are a step in the right direction, I don’t think it qualifies as a happy ending just yet. Many people lost their life savings to these scams. In my view, a happy ending will only happen if all victims are compensated in full.

What’s the lesson to be learned here?
Do not take the purchase or sale of a timeshare lightly!
If you are one of thousands of people who have been defrauded in timeshare scams, you’ll know that buyer’s remorse often arrives too late. Choose an established company you trust to handle your timeshare transactions.

More on this story is available from the following sources:

Reuters
Typically Spanish
Times Online

Tiny Bahrain must put in place legislation to regulate timeshare sales, because the scams have already begun.

East of Saudi Arabia, in the Persian Gulf, lies the archipelago of Bahrain. This semi-arid country, with 161 kilometers (100+ miles) of coastline, draws 60% of its national income from petroleum and petroleum related products, but like so many countries in the Middle East, Bahrain is seeking to increase tourism as it looks toward a time of reduced dependence on the oil market.

In 2004, Bahrain signed a Free Trade Agreement (FTA) with the United States, the first agreement of this type between the US and a Persian Gulf state. And as we in the timeshare industry have seen, when the door is opened for commercial relations between the US and any country, development of timeshares can’t be very far behind.

While there are presently no timeshare properties in Bahrain, timeshare hustlers have already made their presence know. According to a January 28, 2006, article in the Gulf Daily News, a leading periodical published in Manama, Bahrain, “A new law regulating the sale of timeshare properties in Bahrain has been proposed…The move follows some alleged incidents by Bahrainis who purchased properties that did not exist…The MPs (Members of Parliament) want clear rules which would prevent such incidents from occurring in the future and which would clearly regulate all contracts.”

Good for them. The Bahrainis have put out the welcome mat for timeshare developers in their country, but are making the smart move of putting laws in place to regulate it even before the first developer has broken ground.

Keep your eye on Bahrain. The United Nations World Tourism Organization reports that tourism in Bahrain increased by 11% to 4.8 million visitors in the first nine months of 2005, with most of the visitors coming from Saudi Arabia, Kuwait, Qatar, Jordan, Egypt, the United Kingdom, the US, and Ireland.

The notorious “Timeshare Spammer” was sentenced today to one year in federal prison. Inboxes everywhere rejoice.

Search for “timeshare” on any online news service, and news stories about the nefarious “Timeshare Spammer” dominate the results. Convicted “Timeshare Spammer” Peter Moshou was sentenced today to serve 1 year in federal prison and was ordered to pay restitution in the amount of $120,000. The case has received worldwide attention because Mr. Moshou is among the first spammers to be sentenced for violations of the relatively new CAN-SPAM act.

I am particularly vocal when it comes to lousy business practices in the timeshare industry. It is for this reason that I feel obliged to comment on such widely-publicized news.

First, that this spammer was busily and indiscriminately flooding people’s inboxes with garbage causes him to rightfully earn the ire of everyone with an email account. Never purchase anything from spammers, nor should you offer money for their supposed “services”. Why reward bad behavior?

Second, this is a particularly dramatic example of shady marketing practices which persist in the timeshare sales community. The Timeshare Spammer’s sentence serves as an explicit warning, not only to all spammers everywhere, but also to certain unscrupulous types who infest the timeshare industry. Sorry guys, but bottom-feeder sales tactics are no longer acceptable in this business.

If only the “timeshare spammers” of the world would go find real jobs like everyone else…

Beware of timeshare resale companies that refuse to disclose their location. If they won’t post their physical address on their site, or if they hide behind a PO Box… they’re probably up to no good!

(Author’s note: for the purposes of today’s post, I’ll be using the term “transparency“. According to business-in-asia.com’s Business Glossary, “transparency” is defined as:

“The concept of making trade-related administrative processes easier to follow, including opening them to public scrutiny and subject to clear methods of challenge or amendment.”)

As stated in earlier posts, my goal for this weblog is to provide quality timeshare tips and advice for timeshare owners instead of promoting my own company. However, for today’s post, I would like to use my own company as an example to make a few observations about the current state of the timeshare resale industry.

I’ve often remarked that the timeshare industry is changing for the better. When big hotel brands entered the timeshare marketplace over a decade ago, these ushered in an era of greater accountability and honesty in the timeshare business. True, this multi-billion dollar industry attracts its share of scammers, but so does any other lucrative business. Essentially, the entire industry is undergoing a massive change in business practices, from the top down.

Though corporate policy is decided at the highest level, it can take a while for all these changes to filter down to the base of the pyramid, where most timeshare owners feel the difference. This is why, even while the entire industry is reaping the long-term rewards earned by years of sound business practices, it is an ugly fact that the timeshare resale sector has been the one segment of the industry LEAST receptive to these positive changes. Each day ARDA and other groups within the timeshare industry are taking new measures to put an end to “antiquated” high-pressure timeshare sales tactics. At the same time, hundreds of boiler-room operations across the world dazzle their prospects with false promises, badger their victims when they don’t rise to the bait, and eventually take the money and run.

Timeshare owners and resale companies have at least one thing in common: we’re both sick and tired of the deceptive practices in the timeshare industry. As a resale company, we compete with some of the most nefarious scam artists this side of organized crime. It frustrates me that these people actually get a share of the timeshare resale market while at the same time dragging the entire industry through the mud.

It is time to put an end to these lousy business practices once and for all. One way we can do this is to educate first-time timeshare buyers about the timeshare industry. Common sense dictates that a well-educated consumer is much harder to scam. The same consumer will inevitably respond well to honesty and fair treatment. This mode of thinking has caught on in some circles of the timeshare sales community, and I think that it is time to apply it to the resale sector too.

Another way to promote better business practices is through integrity, transparency, and honesty. For instance, a timeshare company that refuses to disclose its physical location probably has reasons for being duplicitous. If a company does not post its physical address on its website, or hides behind a post office box, there’s probably something funny going on. Maybe it’s a one-man operation conducted from a basement somewhere. We’ve all heard stories about fraudulent “businesses” based out of a cell in a maximum-security penitentiary. The bottom line is, if something that claims to be a timeshare resale company will not give out its actual physical location, do not give it any money!

In summary, transparency is the order of the day. It is the only way for a company to attain any degree of credibility in the modern age. This is especially true of online businesses, who by their nature can be subject to the scrutiny of millions of people all over the world at any time. Our business model is centered around long-term success in a modern business climate. Not only for ourselves, but also for our advertisers. It is in our best interests as a company to provide openness and accountability to both potential clients and long-term advertisers.