Fee -based timeshare claims are the latest focus of the Federal Trade Commission (FTC). The FTC is concerned about how businesses are presenting their fee-based offers for consumers to claim alleged refundable fees paid on now-defunct timeshares.
The agency says it has reached several settlements with marketers of these claims, including four that agreed to a total of more than $6.5 million in judgments.
“These schemes are illegal, and the FTC will continue to take action against them,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “We’re especially concerned about offers that require consumers to pay a fee before they can get their money back.”
The agency has received hundreds of complaints from consumers because of the difficulty in canceling and getting refunds after signing up.
What makes a timeshare claim a fee-based offer?
A fee-based offer is simply an offer that requires payment of a fee up front in order to get a refund or benefit later. The most typical examples include offers that require consumers to pay some kind of processing or registration fee before they can receive their money back. According to the FTC, such offers:
- Are not authorized by any law or regulation.
- Cannot be made to anyone receiving, investigating, settling, or participating in a timeshare claim; and
- Cannot be made to those who have already filed a claim on the same timeshare.
Luring consumers with false promise of refunds
The FTC has specific language that marketers cannot use when advertising their refundable fee offers. These include phrases such as “guaranteed,” “no risk,” and “act now.” The language must also disclose that the consumer is not required to pay a fee to file a claim or get a refund.
In many cases, the FTC says, the marketers of these schemes make false promises that consumers will receive a full refund of all monies paid. They also often fail to disclose significant terms and conditions, including the fact that the consumer may be required to forfeit the entire fee if they cancel their participation in the scheme.
How do I protect myself?
If you are considering an offer that requires payment of a fee before you receive your money back, do not respond. It is likely to be a scam.
If you are considering responding to an offer that requires payment of a fee before you can get your money back, don’t do it! If the offer sounds too good to be true, it probably is. Be leery of any offer with language like”no risk,” “guaranteed” or “100% satisfaction guaranteed.”
Don’t be fooled by false promises of refunds in fee-based offers. Remember, always read the offer carefully before responding and never pay a fee upfront to get a refund.
In addition, learn more about the FTC’s refund rules.
Where do I complain?
The FTC wants to hear from you if you get a fee-based offer for your timeshare. Report it at ftc.gov/complaint . Be sure to include all relevant details, including:
- The name of the company offering the scheme;
- How the company contacted you;
- What the offer was for;
- How much money you paid the company; and
- The contact information for the company.
If you feel like you’ve been scammed, file a complaint with the FTC.