WASHINGTON, D.C. — A federal court this past week ordered a key operator of a timeshare exit scheme to pay $140 million and permanently barred him from the industry after finding he defrauded consumers, many of them older adults, out of more than $90 million.
What This Means for You
- Consumers misled by timeshare exit services may receive compensation
- The ruling reinforces your right to cancel certain in-home sales within three days
- Federal regulators are increasing enforcement against deceptive sales practices
The ruling follows an investigation by the Federal Trade Commission and a lawsuit brought by the Department of Justice and the state of Wisconsin.
The court granted summary judgment — a decision issued without a full trial when the facts are not in dispute — against Christopher Carroll, one of the scheme’s primary operators.
Carroll was ordered to pay $95 million to compensate consumers and an additional $45 million civil penalty, which will be paid to the U.S. Treasury.
How the Scheme Worked
According to court findings, the operation used direct mail and in-person sales presentations to pressure consumers into paying large upfront fees for timeshare exit services.
The companies involved operated under multiple names, including Consumer Law Protection, Premier Reservations Group, Resort Transfer Group, Timeshare Help Source, and Square One Group, where Carroll served as president and CEO.
Officials said the businesses made several false claims, including misleading consumers into believing they were affiliated with legitimate timeshare companies and asserting that customers could not exit their timeshare agreements without paying the companies’ fees.
The operation also failed to provide promised refunds and required consumers to sign contracts they were told could not be canceled.
Consumer Protections Violated
The court found the scheme violated the FTC’s Cooling-Off Rule, which gives consumers the legal right to cancel certain door-to-door sales within three business days.
Regulators said the defendants ignored that requirement, limiting consumers’ ability to back out of agreements after signing.
Broader Enforcement Effort
The case stems from a lawsuit filed in November 2022 against Carroll and other operators, including George Reed, Louann Reed, Scott Jackson, and Eduardo Balderas.
Carroll was the final remaining defendant in the case.
In addition to the financial penalties, the court permanently banned Carroll from advertising, marketing, or selling timeshare exit services and from engaging in deceptive door-to-door sales practices.
The order also prohibits him from participating in other misleading or fraudulent business activities outlined in the complaint.
Next Steps
Federal officials said the ruling is intended to return money to affected consumers and prevent similar schemes from targeting vulnerable populations.
The case is part of ongoing enforcement efforts by the FTC and Justice Department to combat fraud in consumer financial services.
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