Pro Timeshare Resales: FTC Ban and a Ferrari, a Rolex and a Diamond Ring Surrendered

The bottom line: telemarketing a "buyer is waiting" promise to collect an advance fee is a textbook Telemarketing Sales Rule (TSR) case.

Here is what happened

The defendants were Jess Kinmont, John P. Wenz, Jr., Pro Timeshare Resales of Flagler Beach LLC, Pro Timeshare Resales LLC and J. William Enterprises LLC. According to the FTC, between November 2011 and December 2016 they:

• Called timeshare owners and falsely claimed to have a buyer or renter ready to buy or rent the property for a specified price.
• Promised to sell timeshares quickly, sometimes within a specified period.
• Charged up to $2,500, and sometimes more, in advance, and did not deliver.
• Strung some owners along with more false claims, such as that money from a sale was on its way, and collected additional "closing costs" or other fees.
• Denied or ignored refund requests.
• Called numbers on the National Do Not Call Registry.

The court entered a temporary restraining order on December 13, 2016, froze the defendants' assets and later appointed a receiver. Read the FTC's complaint against Pro Timeshare Resales.

The settlement

The May 2018 order:

1. Permanently bans the defendants from marketing or selling timeshare resale services, or helping others do so.
2. Bans them from telemarketing, directly or through an intermediary.
3. Prohibits material misrepresentations in selling any other product or service.
4. Bars them from collecting on customer accounts and from selling or benefiting from customer information.
5. Imposes an $18.7 million judgment, suspended once they surrender assets worth approximately $3.4 million.

According to the FTC, those assets included $1.84 million in cash held by the receiver; real property worth approximately $600,000 owned by Kinmont, along with his Range Rover, Ferrari, Bayliner boat and Rolex watch; and, from Wenz, $215,000 in brokerage and bank accounts, two homes, two trucks, silver coins and a diamond ring.

On October 10, 2019, the FTC mailed out 8,088 refund checks totaling nearly $2.7 million, an average of $332 each.

The law in plain English

The TSR prohibits misrepresenting any material aspect of the goods or services offered in a telemarketing call, including the likelihood of results. It also prohibits calling numbers on the Do Not Call Registry without consent or an established business relationship. A claim that a buyer is ready to purchase at a set price is a material representation. If it is false, the fee it produces is at risk.

What this means for you

1. Never claim to have a buyer, renter or result you do not actually have.
2. Do not use "closing costs" or other add-on fees to extend a sale that is not happening.
3. Honor refund policies as stated.
4. Scrub every call list against the Registry.