Arizona’s attorney general is accusing a Tucson telemarketing company of bilking timeshare owners out of thousands of dollars.
Condosmart, LLC made hundreds of unsolicited calls to timeshare owners in Arizona and nine other states promising 10 to 12 weekly rental payments of $1,000, but failed to deliver on those promises, the Attorney General’s Office said.
Starting in November 2012, Condosmart told timeshare owners that Fortune 500 companies wanted to rent their properties. Often, the caller would give specific information about the properties.
However, the timeshare owners had to pay Condosmart an “activation” fee that ranged from $995 to $1,990, says a consumer fraud lawsuit filed Aug. 31 in Pima County Superior Court by Assistant Attorney General Shanelle Schmitz.
The timeshare owners didn’t see a dime after paying the fee, the lawsuit said. Instead, Condosmart would stay in touch with the timeshare owners for several months and then stop responding.
“In most instances, the phone numbers that defendants used to contact consumers were disconnected,” the lawsuit said.
The lawsuit alleges Cochise County resident Roy J. Swartz, owner of Condosmart, ran the scheme out of a Tucson office at 5151 E. Broadway. The company also allegedly operated as CS Marketing, CSR Financial, and Condosmart Marketing.
Swartz has not yet responded to the attorney general’s complaint and the lawyer listed in court documents as representing Swartz did not respond to a request for comment.
In several cases, Condosmart called timeshare owners months after the original transaction and said the properties had been rented.
The company would send checks ranging from $3,400 to $12,000. But first, the timeshare owners would need to pay “Nevada Taxes,” “Florida Hotel Taxes,” or other “taxes” ranging from $400 to $600.
Even after the “taxes” were paid, timeshare owners did not receive rent checks, the lawsuit said.
Alarm bells went off with some timeshare owners after they paid the “activation” fee and reviewed the contract sent by Condosmart, which disclaimed the promises made by Condosmart representatives.
When timeshare owners questioned Condosmart about the disclaimer, Condosmart representatives allegedly called the timeshare owners, rather than responding in writing, and assured them that a client was already available to rent the timeshare.
The attorney general is asking the court to prohibit Condosmart from operating in Arizona, to force it to pay back the timeshare owners and to pay the state up to $10,000 for each fraudulent transaction, as well as any proceeds from those transactions.
Prior to the attorney general’s lawsuit, the company already was in hot water with the Arizona Department of Real Estate, which issued a cease-and-desist order against Condosmart in June 2014 for providing timeshare rental services for compensation without holding an active real estate license.
