Cozumel News February 17th, 2014

In Cozumel News today, February 17th, 2014, we feature a report on the Town Hall Meeting for United States Citizens held by the United States Consulate Staff on February 14th, and an article on time share fraud in Mexico by Lic. Spencer Richard McMullen. Carnival activities are in full swing! Check out our schedule of activities!

Town Hall Meeting Report

United States Consulate Staff held a town hall meeting on Friday February 14^th, 2014, to explain the reason the Cozumel Consulate office has been closed and how consulate business will be handled in the future. In attendance from the consulate were Samantha Mason, Anne Harris, Susan Mc Guirre, and her assistant Richard. (Sorry, I did not get Richard’s last name, nor did I have the opportunity to check the spelling on these names.)

The bottom line is Ms. Mason had received complaints about the closing of the Cozumel office and wanted to clarify why the closing took place. The decision to close some offices apparently has been in the works for years and was made based on data that identified the volume of services provided at each location. As a result, a number of offices have been closed; Cozumel is the last of the most resent 4 offices closed in Mexico this year.

Emergency services do not need an office. This is when an United States Citizen gets arrested, lands up in the  hospital with a  medical emergency, maybe loses all his or her identification and money, or dies here while on vacation. A part time employee will be hired this month to handle these emergencies only. The person will work from home and be on-call to assist in these emergency situations only. The majority of Consulate work in Cozumel in the past years have been emergency services.

Cozumel has had a very low volume of routine services. Routine services are passport renewals, passport cards, death certificates, notary services, and information.  These services will now be handled out of the Playa del Carmen office BY APPOINTMENT ONLY. (You can take a chance and visit the Playa office, but since priority is given to Emergencies, you are taking a chance that the staff might not be available to assist you.) The office in Playa has been handling these services in recent months and assures everyone that services will be handled efficiently and in the same time period.  The process for renewing your passport will take 3 to 4 weeks, so plan accordingly.

Susan Mc Guirre encouraged all U.S. Citizens living in Mexico to purchase a passport card to carry with them at all time.  She explained the card can be used to identify you as an American Citizen in case of injury or death. The process to get a passport card takes 5 weeks; it costs money and is good for 10 years. My suggestion is a copy of your passport in your purse or wallet will serve the same purpose.

All United States Citizens are also encouraged to register with the Department of State. It is important that the Government knows we are in Cozumel in the event of an emergency evacuation. The next of Kin listed in this registration is the contact that the consulate uses in case of an emergency or death. Register at: https://step.state.gov/step/.

In the question and answer section, I learned that the new funeral home, “San Jose” that offer cremation services does not actually cremate on the island, but arranges to have it done at their location on the mainland. Apparently, the island has not received authorization to have a crematorium.

The Playa del Carmen office is located at Calle 1 Sur between Ave.  15 & Ave. 20. (It is walking distance from the Ferry.) Telephone: 01-984-873-0303 U.S. Vonage # 202-370-6708 email: pdcca.appointments@gmail.com.

I will include all the information handed out at the meeting in the U.S. Consulate and Information section of the Cozumel Sun. by the end of this week.

Timeshare Real Estate Scams Victimizing People

By:   Lic. Spencer Richard McMullen

Multiple scams have been identified recently that have already cost people tens of thousands of dollars of their retirement savings. The scams, which seem to be copycats of each other, involve approaching people who own Mexican timeshare real estate by phone calls, mail or by email, and pretending to have ready buyers. The catch is that the prospective sellers are told they need to prepay some phony closing costs and other fees into a phony escrow account in the US, to be reimbursed at closing, which, of course, never occurs.  This occurs after they are sent a signed sales contract using the words “Guarantee” or “Guaranteed” to trick the seller into thinking that it is a sure thing.

The companies look almost legitimate on the internet—but not quite. They have clearly gone to some effort to build websites that look professional and have multiple references elsewhere. But the websites didn’t exist before last year. Their web sites show up on the internet as well as their company name but that only happens because they paid people to put their fake company name in directory listings on 50 internet sites in order to make their name come up in searches and give them legitimacy.  Also they list memberships in fake organizations on their web sites, groups that do not exist, they have even created scam law firms to later scam people a second time saying they can recover the lost funds for a fee of over $1,000 dollars!  These scam attorneys web sites even have fake testimonials.

They include phone numbers, but none of them are answered by real people unless their caller ID identifies them as one of the people being scammed. The phone numbers are VOIP numbers in the US or cell phones in Mexico City.

When questioned about the charges they provide an opinion letter from a supposed international CPA (Certified Public Accountant) for the US, Canada, and Mexico, but no such people actually exist. Their addresses, when searched on the internet, are phony, too, showing up as address “examples” in other contexts. They don’t give their phone numbers or their cédula numbers (official licenses), which could be verified on the internet. The phony letter also has a fake address and lists no phone number.

The documents look almost legitimate, too—but not quite. They use the real SAT (Mexican tax office) forms, but place false information and false payment codes and fee descriptions that do not exist or are grossly inflated by over 1,000%.  They use such nonsense titles and terms as “Guaranteed Purchase/Sale/Escrow Contract.” No such thing exists. And the list of expenses to be paid is filled with phony codes and line items, too, like IVA taxes, which are never part of timeshare transactions. And Foreign Investor Registration fees, which should never be expressed as a percentage of the selling price. Here are some line items that are phony or grossly inflated:

·         Maintenance Fee to date and Renovation Fee to date to be reimbursed at closing

·         Closing and Administration Fees paid by Seller to be reimbursed at closing

·         11% Foreign Investor Registration paid by Seller to be reimbursed at closing

·         16% Value Added Tax (IVA) paid by Seller to be reimbursed at closing

·         Removals of Liens to be paid by Seller to be reimbursed at closing

·         Free and Clear Certificate to be paid by Seller to be reimbursed at closing

·         5% Commission from Buyer to be paid to Seller at closing

·         Erasure of Records to be paid by Seller to be reimbursed at closing

·         Termination of Fideicomiso to be paid by Seller to be reimbursed at closing

In addition, the Mexican buyers’ names and signatures don’t look right because there’s just a first name and a last name, which is not how Mexican’s legal names look (first name, middle name, father’s last name, and mother’s last maiden name).

And, the seller is never given a set of regulations governing the escrow account, detailing how and under what circumstances the funds will be disbursed. The seller is just told to send the money to a particular account. In a normal escrow transaction the escrow company is licensed, maintains a separate trust account and requires specific authorization in order to disburse funds from the trust account.  The scammers have people send money directly to third parties and do not have licensing nor their own escrow trust account for managing or disbursing funds.

The only two escrow companies I have used for Mexican transactions have been Stuart Title and First American Title, both large companies with trust accounts and large staff in the US.

Scams involving the elderly are, of course, always despicable. In this case, the scams take advantage of expats’ likely confusion about how real estate transactions are handled internationally. And, they assume that elderly expats would probably jump at the chance to unload their timeshare for a profit in this shaky economy.

To avoid these kinds of scams, prospective sellers should:

·         Always be wary when approached in an unsolicited manner by anyone claiming that a “guaranteed” buyer is waiting.

·         Always be wary if they’re asked to pay any upfront closing costs whatsoever. Only buyers pay closing costs in Mexico as well as much of the world, sellers only pay capital gains tax and if that is paid, it is collected at the end from the payment made by the buyer and deducted from the seller’s proceeds.   Don’t fall for being promised a reimbursement at closing.

·         Always hire their own real estate lawyers to review real estate transactions. Never hire lawyers recommended by third parties as sellers need an independent advocate who is not partial and who can review the transaction and documents provided.

Lic. Spencer Richard McMullen is a litigating attorney and official court translator in the State of Jalisco with offices in Chapala and Guadalajara.  —