FTC busts advance fee recovery scheme targeting timeshare resale and investment scam victims

government actionThe Federal Trade Commission (FTC) recently cracked down on an advance fee recovery scheme that targeted victims of timeshare resale and investment scams. After the FTC took court action, the defendants agreed to stop their operation during the ongoing litigation.

The FTC wants to permanently halt the operation, which it says took in close to $1.3 million from consumers, many of whom were elderly people who had already lost money to timeshare resale scammers and precious metal investment fraud.

According to the FTC complaint, telemarketers working for Consumer Collection Advocates, Corp and Michael Robert Ettus called consumers and guaranteed (falsely) that they could recover most of their investment–for an upfront fee. The defendants allegedly made guarantees that they could recover 60 percent or more of the consumers’ money within 30 to 180 days.

The defendants allegedly accepted a reduced fee for consumers who had lost large amounts of money and also charged consumers a back-end fee of 20 percent for any amount they recovered.

According to the FTC, upfront payments ranged from hundreds of dollars to as much as $10,000 and consumers who paid for the recovery service then stopped hearing from the defendants. According to the FTC complaint, few if any consumers received any money.

A court order announced on Nov. 10, 2014, prohibits the defendants from misrepresenting what they can provide consumers and from violating the FTC’s Telemarketing Sales Rule. They are also barred from selling or in any way benefiting from customers’ personal information.

The FTC credits Better Business Bureau Serving Southeast Florida and the Caribbean with helping bring the case to court.