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A Times investigation: State regulators failed to address onslaught of timeshare resale schemes

From Sunday's Tampa Bay Times investigation: Timeshare resale schemes have quietly become the most rampant form of consumer fraud in Florida, affecting people across the United States and in some foreign countries. The state Attorney General's Office received 964 complaints against Florida timeshare resale companies in 2008. Then 2,929 in 2009. Then 12,257 in 2010.

Last year, even with a dip in calls, Florida's fraud hotline fielded more complaints about timeshare resale companies than the next four categories of consumer complaints combined.

The Tampa Bay Times reviewed thousands of those complaints and spent six months investigating timeshare resale companies and the state's attempts to stop their abuses. Despite an avalanche of allegations, Florida regulators and law enforcement agencies at every level have failed to take basic steps to protect consumers and curb fraud:

• State rules ban people convicted of certain crimes from getting licensed to run telemarketing companies or work for them, including timeshare resale. But until last summer regulators did not run background checks on most applicants. Instead, the Department of Agriculture and Consumer Services took their word that they had no criminal history.

• The department repeatedly renewed licenses for timeshare resale companies that had been fined for breaking state rules and, in some cases, accused of fraud by dozens of customers.

• When timeshare companies break the rules, the Attorney General's Office avoids criminal prosecutions in favor of settlement agreements that let companies stay in business and do not require owners to admit wrongdoing. The agreements have recouped about $6 million, a fraction of the money victims have lost.

• Despite more than 2,600 complaints against timeshare companies in Pinellas and Hillsborough counties, many of them alleging criminal fraud, police agencies here have not built a single case. That leaves federal agencies to chase far more cases than they can possibly handle.

Spokeswomen for Attorney General Pam Bondi and Agriculture Commissioner Adam Putnam said their agencies do everything they can to curb resale fraud.

"We do the best we can with the resources we have," Putnam spokeswoman Liz Compton said. "We recognize the weaknesses and try to correct them as we can."

Bondi spokeswoman Jennifer Meale defended settlements as the best way to quickly get money back for consumers. Lawsuits and criminal prosecutions can be costly and take months or years to complete.

Bondi's biggest achievement in the fight against resale fraud, Meale said, is a new bill that would require timeshare resale companies to be more forthright about their advertising methods. Bondi announced the bill in October, after months of records requests from the Times and three days before a scheduled interview with the paper.

Read the entire investigation here.