The FBI is warning about an increase in scams targeted towards the elderly, following recent arrests in timeshare scheme.
A Los Angeles man and another from Kansas were arrested this week for allegedly defrauding elderly individuals through a deceptive telemarketing timeshare scheme. This incident adds to the growing number of elder fraud cases, which the FBI has warned is on the rise. The accused, Michael Farole and Christopher Lang, claimed to represent companies that offered advertising and other services to timeshare owners. The arrests in timeshare scheme note the the pair and others allegedly persuaded victims to pay advance fees for services related to selling or renting timeshares, which were never rendered.
The Deceptive Timeshare Marketing Tactics
After the victims paid the initial timeshare marketing fees, Farole and Lang continued to contact them through phone calls, texts, and emails, attempting to extract more fees. The investigation revealed that at least 370 elderly individuals were defrauded, losing over $4.5 million. According to KTLA, the victims used funds from their social security income, investments, retirement accounts, and savings to pay the fraudulent timeshare companies. Despite paying recurring fees, none of the timeshare victims received the promised services or proceeds. The timeshare market, often associated with vacation properties, became a tool for deception in this case.
The Alarming Statistics and Timeshare’s Role
In 2022, adults over the age of 60 reported 88,262 complaints to the FBI, amounting to a total loss of more than $3.1 billion. This represents an 84% increase in losses compared to the previous year. The average loss per victim was over $35,000, and more than 5,000 victims lost over $100,000. California leads the U.S. in the number of elderly victims of fraud, with losses exceeding $624.5 million. Timeshare fraud has been a significant contributor to these statistics, as scammers exploit the timeshare industry’s complexity and the victims’ lack of familiarity with timeshare contracts and transactions.
Cryptocurrency: A New Avenue for Scams, Including Timeshare Fraud
The FBI’s internet crime complaint center received nearly 10,000 complaints from victims over 60 involving the use of cryptocurrency, including Bitcoin, Ethereum, Litecoin, and Ripple. Losses from these victims totaled more than $1 billion. The FBI highlighted that cryptocurrency is becoming a preferred payment method for scams, including timeshare fraud.
Common Elder Fraud Schemes Including Timeshare Scams
Elder fraud schemes continue to plague our society, preying upon vulnerable individuals, and wreaking havoc on their finances and emotional well-being. The Federal Bureau of Investigation (FBI) has recently shed light on the most prevalent forms of elder fraud, revealing a range of deceptive tactics used by scammers to exploit the elderly.
Different kinds of timeshare resale schemes exist in the vacation property market. One popular scheme which appears to have played out here is called the “Unsolicited Buyer” approach. In this scheme, a company reaches out to a timeshare owner claiming they have a buyer interested in purchasing their timeshare. Often, the company will ask for an upfront fee to help the sale go through. Once they’ve received payment, the company disappears, and the sale never goes through. This scheme targets owners hoping to sell their timeshare, who may not know the risks of dealing with unverified resellers.
Another prevalent timeshare resale scheme is the “Rental Income” promise. In this scheme, the timeshare owner is approached by a company that promises to rent out the timeshare to vacationers. The company claims that the rental income will be substantial and convinces the owner to pay an upfront fee for advertising and marketing services. However, after the fee is paid, the company fails to rent out the timeshare and does not provide the promised income. This leaves the owner with a financial loss and an unsold timeshare.
The “Trade-In” scheme is also common in the timeshare resale market. In this scheme, a company offers to help the timeshare owner trade in their current timeshare for a more desirable one in a different location. The company claims that this can be done with little to no additional cost. However, the owner is required to pay an upfront fee for the trade-in process. Once the fee is paid, the company either provides a timeshare of much lower value or fails to complete the trade-in altogether. This scheme exploits the desire of timeshare owners to upgrade or change their vacation properties without understanding the intricacies of the timeshare market.
Protecting Yourself and Loved Ones from Timeshare Scams
The FBI advises recognizing scam attempts and ending all communication with perpetrators. It is important to be cautious of unsolicited phone calls, mailings, and door-to-door service offers, especially those related to timeshares. Protect personal information, keep antivirus and security protections up to date, and never send money to someone you don’t know personally. Consulting with a trusted family member or friend when in doubt is also recommended. If you believe you or someone you know may have been a victim of timeshare fraud, report the incident to the FBI.
Disclosure: This article is for information purposes only and is not intended as legal advice.
Led by Timeshare attorneys J. Andrew Meyer and Michael D. Finn with over 75 years of combined legal experience. The Finn Law Group is a consumer protection firm specializing in timeshare law. If you feel you need to speak with a legal professional, contact our office for a free consultation at 727-214-0700 or email us at [email protected]
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