Tuesday, October 11, 2005
MADIGAN, OBRE FILE SUIT AGAINST OPERATORS OF TIME SHARE SCAM; CONSUMERS PAID UNLICENSED REAL ESTATE TELEMARKETERS
Acting on consumer complaints from three Illinois counties and 18 states, Attorney General Lisa Madigan and the Office of Banks and Real Estate (OBRE) have filed suit to shut down two Quad City companies for illegally contracting with consumers to resell their timeshares, a popular real estate purchase for vacationers.
The companies, which are not even licensed real estate brokers, never listed the properties for sale while collecting approximately $14,000 from the complaining consumers.
Named as defendants are Millennium Vacation Properties II, Inc., d/b/a Millennium Vacation Properties of East Moline and its owner, Shelly L. Reynolds of Rock Island. Reynolds, who also has lived in Florida, is a director in a second company named MS Factory, Inc. d/b/a Millinneum [sic] Vacation Properties. Michael Francesco of Rock Island, a co-director of MS Factory, also is named as a defendant.
Madigan noted that, according to OBRE, neither company is licensed as a real estate broker or timeshare resale agent as required by state law. In addition, both companies are rated “unsatisfactory” by the Better Business Bureau.
“These defendants cold called consumers claiming they were prepared to help the consumers sell their timeshares and that they had ready buyers. In fact, the defendants did not intend to perform any service, nor were they licensed to perform the services they market and sell,” Madigan said. “The bottom line is that these consumers were scammed.”
“This office will not tolerate fraud or deceptive practices such as those alleged against Millennium,” said D. Lorenzo Padron, Commissioner of the Office of Banks and Real Estate. “Unscrupulous individuals or companies should be on notice that we will find them and seek justice on behalf of the citizens of Illinois.”
Thirty-eight complaints have been filed with Madigan’s Consumer Fraud Bureau by consumers who claim the defendants offer their resale services during a telemarketing call. The defendants allegedly found consumers to pitch by cold calling people who listed their properties on the Internet or who were on a list of timeshare owners.
During a call, consumers are told that a title search and appraisal would be necessary at a cost between $199 and $599. An additional fee of $300 would be due at closing. After charging the fees to their credit cards, consumers would receive an information packet that included, among other things, a contract and a “Money Back Guarantee” promising consumers their money back if another company sold their timeshare first. The suit alleges that none of the timeshares were listed or sold and no consumers were reimbursed.
The companies and their officers are charged with violating the federal Telemarketing Sales Rule for making false or misleading statements to convince people to pay for their services. State charges include violations of the Consumer Fraud Act, the Illinois Real Estate Timeshare Act and the Illinois Real Estate License Act.
The suit, filed June 20 in federal district court in Rock Island, seeks a permanent nationwide injunction against the defendants, cancellation of all contracts, full restitution to consumers and a civil penalty of $50,000 and an additional penalty of $50,000 for each violation found to have been committed with intent to defraud. Madigan’s office has received complaints from consumers in McLean, Will and Winnebago counties in Illinois and out-of-state complaints from Arizona, California, Florida, Georgia, Indiana, Kentucky, Maryland, Michigan, Missouri, New Hampshire, New Jersey, Ohio, Pennsylvania, Tennessee, Texas, Virginia, Washington and Wisconsin.
The companies, which are not even licensed real estate brokers, never listed the properties for sale while collecting approximately $14,000 from the complaining consumers.
Named as defendants are Millennium Vacation Properties II, Inc., d/b/a Millennium Vacation Properties of East Moline and its owner, Shelly L. Reynolds of Rock Island. Reynolds, who also has lived in Florida, is a director in a second company named MS Factory, Inc. d/b/a Millinneum [sic] Vacation Properties. Michael Francesco of Rock Island, a co-director of MS Factory, also is named as a defendant.
Madigan noted that, according to OBRE, neither company is licensed as a real estate broker or timeshare resale agent as required by state law. In addition, both companies are rated “unsatisfactory” by the Better Business Bureau.
“These defendants cold called consumers claiming they were prepared to help the consumers sell their timeshares and that they had ready buyers. In fact, the defendants did not intend to perform any service, nor were they licensed to perform the services they market and sell,” Madigan said. “The bottom line is that these consumers were scammed.”
“This office will not tolerate fraud or deceptive practices such as those alleged against Millennium,” said D. Lorenzo Padron, Commissioner of the Office of Banks and Real Estate. “Unscrupulous individuals or companies should be on notice that we will find them and seek justice on behalf of the citizens of Illinois.”
Thirty-eight complaints have been filed with Madigan’s Consumer Fraud Bureau by consumers who claim the defendants offer their resale services during a telemarketing call. The defendants allegedly found consumers to pitch by cold calling people who listed their properties on the Internet or who were on a list of timeshare owners.
During a call, consumers are told that a title search and appraisal would be necessary at a cost between $199 and $599. An additional fee of $300 would be due at closing. After charging the fees to their credit cards, consumers would receive an information packet that included, among other things, a contract and a “Money Back Guarantee” promising consumers their money back if another company sold their timeshare first. The suit alleges that none of the timeshares were listed or sold and no consumers were reimbursed.
The companies and their officers are charged with violating the federal Telemarketing Sales Rule for making false or misleading statements to convince people to pay for their services. State charges include violations of the Consumer Fraud Act, the Illinois Real Estate Timeshare Act and the Illinois Real Estate License Act.
The suit, filed June 20 in federal district court in Rock Island, seeks a permanent nationwide injunction against the defendants, cancellation of all contracts, full restitution to consumers and a civil penalty of $50,000 and an additional penalty of $50,000 for each violation found to have been committed with intent to defraud. Madigan’s office has received complaints from consumers in McLean, Will and Winnebago counties in Illinois and out-of-state complaints from Arizona, California, Florida, Georgia, Indiana, Kentucky, Maryland, Michigan, Missouri, New Hampshire, New Jersey, Ohio, Pennsylvania, Tennessee, Texas, Virginia, Washington and Wisconsin.
# posted by John @ 12:59 PM 
