Governor Abbott Signs Law Cracking Down on Fraudulent Transfer Companies
The American Resort Development Association (ARDA) and ARDA Resort Owners’ Coalition (ARDA-ROC) applaud efforts by Texas Governor Gregg Abbott and the Texas State Legislature by passing legislation that ensures better protection for timeshare owners against fraudulent timeshare transfer company activity. H.B. 2261/S.B. 738 provides clearer definitions for “transfer” and “termination” as it relates to timeshare products, and seeks to deter illegitimate companies or individuals from conducting deceptive business practices such as falsely representing itself as a legitimate transfer or exit company.
“We thank Governor Abbott for his support on this legislation as it signals intolerance for unscrupulous players who unduly harm our owners. This bill is an important step towards protecting the integrity of timeshare ownership in Texas,” said Ken McKelvey, ARDA-ROC Chairman.
Timeshare transfer companies are companies that offer assistance in transferring ownership of a timeshare interest from the owner to another party. Timeshare owners are often targeted by unethical businesses claiming to provide assistance with the transfer or termination of their timeshare interest, but instead are defrauded out of thousands of dollars for services that are never rendered.
ARDA and ARDA-ROC caution owners to do their due diligence on any company or person offering assistance with the resale or transfer of their timeshare product. “It is important for owners to know that there are services offered by legitimate transfer companies,” said Howard Nusbaum, president and CEO of ARDA. “Unfortunately, the actions of a few fraudulent companies taint the entire secondary marketplace experience—and that is why legislation like this is so important in effecting change.”
The bill identifies the following as deceptive trade practices:
- Making false or misleading statements in connection with a timeshare resale, transfer or exit service, including the source of contact information for the timeshare owner, the identity of the service provider, and the term and conditions of the service offered.
- The collection of advance fees before the completion of services.
- Failure to notify a timeshare owners’ association of a transfer and to comply with reasonable association transfer policies.
- Failure to provide written disclosures that give the consumer important information on the details of the services being provided.
ARDA alerts owners of potential scams and has released numerous consumer advisories about the various types of fraudulent practices. “Our member companies, the resorts governing HOAs and timeshare owners have advocated for stronger consumer protections and stricter penalties for fraudulent secondary marketplace activity in state legislatures around the country,” said Nusbaum. “The passage of this bill reflects the collective hard work of our industry in cooperation with law enforcement and state agencies that strive every day to protect consumers from fraudulent schemes and dishonest individuals.”
For more information about timeshare transfers and resales, visit the ARDA-ROC Timeshare Resale Resource Center.
About ARDA
The American Resort Development Association (ARDA) is the Washington D.C.-based professional association representing the vacation ownership and resort development industries. Established in 1969, ARDA today has almost 1,000 members ranging from privately held firms to publicly traded companies and international corporations with expertise in shared ownership interests in leisure real estate. The membership also includes timeshare owner associations (HOAs), resort management companies, and owners through the ARDA Resort Owners Coalition (ARDA-ROC). For more information, visit www.arda.org or ARDA’s consumer website at www.VacationBetter.org.
About ARDA-ROC
The ARDA Resort Owners’ Coalition (ARDA-ROC) is a non-profit entity endorsed by the American Resort Development Association and funded by individual timeshare owner’s voluntary contributions, dedicated to preserving, protecting, and enhancing vacation ownership. ARDA-ROC is an alliance of owners, developers, and managers who are committed to advocating for local, state, and federal policies that enable the vacation ownership industry to thrive. For more information, visit http://www.ardaroc.org.
