Hilton Head Island's Dirty Little Secret

While multi-millionaires sleep late; walk the beach; play a round of golf; or cruise on their extravagant yachts -- there's a dirty little secret known mostly to residents of this beautiful South Carolina coastal resort. There's timeshare fraud taking place on a daily basis, as unsuspecting consumers from far away states are fleeced for thousands of dollars.

There are a variety of ways timeshare companies lure intended victims to Hilton Head Island. The primary inducement is the fact that Hilton Head Island is frequently rated among the top vacation destinations in the United States. Who wouldn't want to visit the renowned Hilton Head Island?

This initial temptation is soon followed by other enticements including cash back; money for dining; cruises; or other adventures. All of these make a 90 minute presentation sound like a very minimal price to pay for such a wonderful vacation at this luxurious and idyllic resort island community.

Yet most consumers are unaware of the shady practices of many of the timeshare peddlers at Hilton Head. In fact, many of the time share companies engage in outright fraud and nothing is done about it.

Specifically, the South Carolina Real Estate Commission has investigated Coral Resorts (owner and operator of several HHI timeshare resorts) for multiple, continuous, and flagrant violations. But they have found "no violations" or wrong doing. So, the scams continue despite all the "locals" knowing the underlying truth: Hilton Head Island timeshare companies are intentionally defrauding consumers of millions of dollars a year.

The timeshare industry seems to have a business model which depends largely upon two factors:

1) Some consumers will default on their obligations. This may be due to financial circumstances, which prevent them from meeting their payments; or they default due to disgust with the fraudulent sales activities, which leaves consumers with far less than they agreed to or bargained for in their contracts.

The "bait and switch" tactics cause some consumers to make what might otherwise be considered a smart business move. In the event a business project is determined to be much less than expected (in terms of expected "return on investment"), then it's typical to not follow good money after bad. In other words, stop investing in the project.

Yet in the timeshare world, this only benefits the timeshare merchants, as they keep all monies already paid; pursue legal action to recover the remainder; and the property reverts to them. The consumer is left empty-handed, and the timeshare companies have yet more product to traffic to unsuspecting consumers (i.e. suckers).

2) The timeshare companies have "deep pockets". They can easily defend themselves against any one consumer.

For example, while Coral Resorts claims to be a member of the Hilton Head Island Chamber of Commerce, they have no acccreditation with the Better Business Bureau, and on a scale of A+ to F, their rating is F.

As of this writing they have 173 complaints over the past three years and 39 complaints in the past 12 months. The BBB describes one of these complaints as serious, with 14 complaints not being resolved, and another 9 complaints resulting in a failure by Coral Resorts to respond in any manner whatsoever. The BBB did say that 132 cases had been resolved with BBB assistance.

What's the implication? Well, my math seems to suggest that there's a 76% chance of resolution for those who contact the Better Business Bureau. I guess that's not bad, but it seems far too short of the real solution.

I think it's time to assist ALL consumers who've been defrauded, not just those few who have reached out to the Better Business Bureau. Further, it's necessary to prevent similar fraudulent practices going forward. This would seem to suggest a class action lawsuit involving thousands of property owners, with recovery of all monies lost and punitive damages as well. Or perhaps it's too late for that and a full-blown criminal investigation is in order.

All of this comes as such a great disappointment to me personallly, and I feel victimized by the entire Hilton Head Island community, as well as Beaufort County and the State of South Carolina.

My timeshare purchase at Coral Resorts' Island Links came in late 2010, many years after the South Carolina legal system became aware of the criminal activites of several HHI timeshare resorts. The failure of the legal system to protect consumers by issuing injunctions, against the likes of Coral Resorts, to cease and desist their predatory behavior has me perplexed to say the least.

I have always had great respect for the community of Hilton Head Island and I've held them in high regard. It has been difficult for me to realize that I've been victimized, and that the community of Hilton Head Island allowed it to happen. It's much the same as someone being mugged, robbed, or raped in the presence of other citizens, who calmly walk away or turn their backs while the crime is being committed.

Nobody wants to get involved. They say, "It's not their business". But what they really fear if they speak out or help the victim is retribution of some kind from the criminals. In this way criminals are allowed to take over neighborhoods or cities. In certain extreme cases, entire societies can be corrupted by organized crime behavior.

Is that what's going on at Hilton Head? Well the latter case would be an exaggeration, but the former is entirely possible.

How can the community of Hilton Head Island and the State of South Carolina do absolutely nothing about the fraud being perpetrated against consumers? Is it necessary for SLED (South Carolina Law Enforcement Division} to come in and shut down Coral Resorts? Is it necessary to take away all the personnel in handcuffs, while loading trucks with files, computers, and other evidence?

The existence of fraud is overwhelming and undeniable. Yet the prospect of a class action law suit now seems almost insignificant. Maybe it's too little -- too late. Things have probably progressed to the point that the FBI must get involved and the perpetrators sentenced to many years in federal prison. This might well turn out to be the largest real estate fraud in the history of South Carolina.

It's all such a shame really, as I still find it hard to believe that Hilton Head Island, my beloved vacation destination, has participated in a crime against me and my family - or - at the very least stood by while we were being robbed. It's feels as though I've been betrayed by a best friend. If I could ask some questions of the residents and businesses of Hilton Head they might sound something this:

Why? Why have you allowed me to be robbed after all these years of friendship? Hasn't it been enough for me and my family to come and spend our time and money in your community? Is it necessary or permissible to knowingly allow thieves to rob us while you stand by idle and unconcerned? Is it really enough to prevent petty crimes, while allowing wholesale, white-collar crime to take place in the heart of the community?

Shame on you my friend! Your betrayal cuts at my heart like a dagger. I'm still in shock, amazement, and disbelief. It's truly surreal.

I've tried to deny that my good old friend would betray me in this manner. Yet the truth is inescapable. I'm not sure if I want to say good-bye yet to my good, old friend. But I do want the world to know what's really going on at Hilton Head Island. Contrary to the businesses and residents of the area, I feel an obligation to let everyone know about Hilton Head Island's dirty little secret.