Kathleen G. Kane - Pennsylvania Office of Attorney General - Protecting Pennsylvanians

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October 14, 2008

Attorney General Corbett announces lawsuits against Florida timeshare & vacation companies accused of advertising, real estate, and telemarketing violations

Bluegreen1-250x275HARRISBURG - Attorney General Tom Corbett today announced lawsuits today against four Florida-based companies accused of illegally marketing vacation packages, using "free" airline ticket offers and other worthless prizes to lure consumers into aggressive and deceptive timeshare presentations.

Corbett said consumer protection lawsuits were filed against Bluegreen Corporation, Bluegreen Resorts, Bluegreen Vacations Unlimited, Inc. and Great Vacations Destinations, Inc., all of Boca Raton, Florida. Bluegreen contacted consumers by phone and through kiosks at shopping malls, fairs, and festivals throughout Pennsylvania, and also operates full-time sales facilities in Hershey and King of Prussia.

"Virtually any consumer with a checkbook and a pulse allegedly qualified as a 'winner' in these promotions," Corbett said. "Unsuspecting consumers who believed they were contest winners were actually drawn into a high pressure bait-and-switch campaign designed to push timeshare vacation packages costing thousands of dollars."

Corbett said more than 5,700 Pennsylvania residents purchased Bluegreen timeshares, with many paying $20,000 to $40,000 or more for packages that violated Pennsylvania's Consumer Protection Law, the Real Estate Licensing and Registration Act, the Telemarketer Registration Act and other consumer regulations. 

Phony Prizes
Corbett said that Bluegreen representatives allegedly called consumers who believed they were entering contests and other promotions promising cars, cash and vacations. 

According to the lawsuit, consumers were told that they had not won the "grand prize," but had been selected to receive other items, like free airline tickets.  Consumers were also promised free gasoline and meals when they collected their prize, if they attended a 90 minute timeshare presentation.

Corbett said the lawsuit alleges that consumers who were contacted by Bluegreen were not actually randomly selected prize winners.  Instead, virtually everyone who entered the contests was contacted and falsely told that they were a prize winner. 

In one case, Corbett said a consumer informed a Bluegreen representative that the person they were trying to reach did not live at that address. The consumer was told that it wasn't a problem - they would give her a prize too. 

Bluegreen-Airfare1-366x244High Pressure Sales and False Advertising
Corbett said that in order to collect their "prizes," consumers were required to schedule an appointment with a Bluegreen sales representative.  In some cases, consumers who believed they would be attending a 90 minute timeshare presentation were actually subjected to relentless marketing pitches that lasted five hours or more. 

According to the lawsuit, numerous deceptive statements were made to consumers during these presentations in an effort to get them to sign contracts immediately, including phony claims that prices would increase the next day, misrepresentations about when and where consumers could travel if they made a purchase and false statements about certain fees being waived.

Corbett said that some consumers bought vacation programs because they were told they were entitled to a one-week stay in Hawaii, only to learn afterward that the program they purchased could not be used in Hawaii.

According to the lawsuit, consumers who sat through the timeshare presentations received "prizes" that were nothing like what they had been promised.  The "four free airline tickets" were actually booklets that offered two airline tickets with each hotel room reserved, at high prices, in a limited number of cities. In some situations, consumers were required to commit to a 10 night stay at overpriced hotel rates before being able to select a local airport for their flight.

Corbett said "free" gasoline and meals that consumers were promised turned out to be coupons or certificates with lengthy terms and conditions.  For instance, consumers who were promised $40 in free gas were required to submit written requests to obtain a series of gas coupons.  The coupons required consumers to pay for their gas first and then mail a receipt for reimbursement, with each coupon limited to a $5 purchase, with no more than one purchase per month.

Illegal Contracts
Corbett's said contracts used by Bluegreen failed to properly inform consumers of their right to cancel their purchase.  Pennsylvania law requires that consumers have five days to cancel any timeshare or campground purchase.  Bluegreen is also accused of violating a state law that requires all consumer contracts to be written in easy-to-understand terms. 

Bluegreen-Hershey-366x244Do Not Call Violations
According to the lawsuit, Bluegreen made numerous calls to consumers who were on Pennsylvania's Do Not Call list, allegedly basing those calls on referrals from other customers.  Additionally, the companies are accused of making repeated calls to consumers who clearly told them not to call again.

"Bluegreen took advantage of hardworking Pennsylvania residents eager to find an affordable getaway," Corbett said. "Using deceptive contests, relentless sales presentations and misleading contracts, consumers were pressured into paying thousands of dollars for vacation packages that don't meet their needs or their budgets."

Corbett said the lawsuits seek restitution for consumers who suffered financial losses because of these deceptive or illegal practices. 

Additionally, Corbett says the lawsuit asks the court to void all illegal consumer contracts and give consumers the right to cancel any agreement that did not include the state-required notice of cancellation.

The lawsuit also seeks up to $1,000 in civil penalties for each violation of the Consumer Protection Law, or up to $3,000 for each violation involving a senior citizen.

The lawsuits were filed in Commonwealth Court, in Harrisburg, by Senior Deputy Attorney General David Sumner of the Attorney General's Bureau of Consumer Protection.

Corbett says the investigation began after consumers contacted his office to report these practices.  He encouraged other consumers who have problems with Bluegreen to file a complaint by calling the Attorney General's Consumer Protection Hotline at 1-800-441-2555 or submit an online consumer complaint.

Corbett offered the following tips to consumers considering a timeshare:

  • Take your time. 
    Treat a timeshare purchase like the purchase of a home or any other significant commitment.  Don't let high pressure sales tactics and long presentations force you into a hasty decision. 
  • Do your research. 
    Check the market and the value of the vacation property before you buy and investigate the seller, the developer and the management company.  Ask for references and contact current owners to verify their satisfaction with the property. 
  • Know the cancellation period. 
    Pennsylvania provides a five-day cooling off period for buyers to change their mind and cancel a timeshare contract.  Consumers must notify the seller in writing via certified mail or return receipt mail. 
  • Recognize that timeshares can be difficult to resell. 
    Buy a timeshare only if you plan to use it.  It is an option for future vacations, not an investment.
  • Consider extra costs. 
    Most timeshares require consumers to pay annual assessment fees, maintenance fees and taxes, closing and broker commissions, and finance charges.  Some fees can rise dramatically in the future so it's important to ask if there is cap on future fees.  
     
  • Beware of scams
    If you are offered a prize as an incentive to attend a timeshare presentation, ask for details and watch out for hidden conditions and fine print.  Keep in mind that the value of promotional gifts may be low in comparison to the fees and charges associated with a timeshare purchase.  Any 'free' travel or vacations you are offered may have blackout dates and other restrictions. 
  • Read everything before you sign. 
    Carefully review contracts and all other paperwork before you sign anything, and get all special promises about discounts, waived fees or other promotions in writing.

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