AG Shapiro announces lawsuit against former Mercer County timeshare reseller and its officers

HARRISBURG — Attorney General Josh Shapiro today announced that his Office has filed a lawsuit against former Mercer County timeshare reseller Groupwise, Inc. and its former officers, Derek J. McGuire and Andrew J. Harkins. The suit alleges that the defendants violated the Consumer Protection Law by failing to honor the terms of their service agreements. The Attorney General’s Bureau of Consumer Protection has received 88 complaints to date against Groupwise, alleging a pattern of misconduct.

Groupwise sold its timeshare resale services to consumers nationwide. In exchange for a fee ranging from approximately $3,500 to $6,300, Groupwise agreed to assume the consumers’ financial obligations relating to their timeshares until the defendants located buyers for the timeshares and finalized sales. However, Groupwise allegedly failed to honor the terms of these agreements, leaving consumers burdened with the ownership of their timeshares and all of the associated costs and fees. The lawsuit also alleges that the defendants failed to escrow the consumers’ payments, despite requirements of certain state laws, including Florida and South Carolina.

Over time, the defendants increasingly struggled to locate buyers for the timeshares under contract and could no longer keep up with the financial responsibilities. Groupwise ceased all operations in September of 2018, leaving at least 930 consumers nationwide with incomplete timeshare transfer transactions and no financial relief.  According to the Complaint, consumer losses are valued at $2.9 million. The Commonwealth’s complaint seeks consumer restitution, civil penalties and costs. In addition, the Commonwealth seeks to permanently enjoin Harkins and McGuire from engaging in the timeshare industry in Pennsylvania.

“The defendants took advantage of consumers who were seeking relief from timeshares that they no longer wanted or couldn’t afford, and instead made their financial burdens even worse,” said Attorney General Shapiro. “Consumers should do thorough research when trying to get out of timeshare agreements to make sure they are wise about their options and don’t get scammed. I’m grateful for the hard work of my Bureau of Consumer Protection and Senior Deputy Attorney General Amy Schulman to hold this company and its officers accountable and secure relief for the consumers they scammed.”

Attorney General Shapiro offers the following tips to consumers who are looking to get out of their timeshares:

  • Before paying anyone to assist you in getting out of your timeshare, contact your timeshare resort to find out if they offer a timeshare “buy back” or “exit” process. Many of the larger timeshare resorts offer these programs.
  • If you do retain a timeshare reseller to assist you, make sure you do your homework beforehand by researching the company on-line to see if there are any complaints.
  • Deal only with licensed real estate brokers and agents.
  • Get everything in writing and make sure you understand all the terms and conditions, including what services the reseller will perform and the related fees and costs.
  • Seek out companies that do not collect fees until the services are performed and the timeshare is sold.
  • Ask for references from satisfied customers.

Consumers who believe they have been a victim of Groupwise, Inc. and its officers’ unlawful practices should contact the Bureau of Consumer at 800-441-2555 or at scams@attorneygeneral.gov.

Source: Office of Attorney General

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