FTC and Wisconsin aim to prove deceptive timeshare exit claims

Many people—including older consumers—find themselves locked into expensive timeshares that no longer meet their needs. They were attracted to idyllic resorts but now need to get away from them. Enter the timeshare industry and exit the industry. The concern, however, is that when operators claim they can get people out of timeshare contracts, but promise more than they deliver, they often leave consumers in deeper financial trouble. The Justice Department’s lawsuit, filed on behalf of the Federal Trade Commission and the Wisconsin Attorney General, alleges that a Missouri company called Square One Development Group and various affiliates and individuals used deceptive and unfair practices to steal approximately $9,000 from the company. Ten thousand U.S. dollars. Consumers are eager to get out of their timeshare contracts.

The defendants used glossy emails to invite timeshare owners to face-to-face “information sessions” at local hotels or restaurants, where they were said to “learn how to recoup 100% of the full purchase price of their timeshares.”Whatof On the menu?According to the FTC and the Wisconsin Attorney General, the promotions and one-on-one sales pitches claimed that the defendants would typically wean people off their timeshares within a year or two and would recoup 100 percent of consumers’ losses.of Timeshare purchase price – with fees of course.

To fill the seat, the defendant declared that “a Consumer Law representative will explain all of your rights regarding timeshare ownership.” Who or what is “Consumer Law Protection”? The defendants said they were “accredited by the Consumer Rights Council (CRC), an independent advocacy organization dedicated to assisting timeshare owners who wish to safely cancel or exit their timeshares . . . At the meeting, the defendant described himself as a “proud partner” of a well-known timeshare company. The defendants also claimed to be affiliated with the Better Business Bureau. Most importantly, the defendants promised in their sales pitches and contracts: “Our service is guaranteed under consumer law – we will get you out of your timeshare or we will give you a full refund.”

That’s what people eager to free themselves from the burden of timeshares hear, but the complaints suggest a much different story. The FTC and the Wisconsin AG claim that even if consumers pay fees ranging from $5,000 to more than $80,000, defendants often do not break out of their timeshare contracts and do not recover 100% of the timeshare purchase price. When consumers try to get updates on the case, defendant call center employees often stall them, saying the matter is “legitimate” or that COVID-19 is delaying timeshare exits. But according to the FTC and Wisconsin AG, “In fact, defendants have done virtually nothing to get consumers out of their timeshare contracts, regardless of the COVID-19 pandemic.” Additionally, the complaint alleges that in many cases, Defendants did not honor their money-back guarantees.

But what about the endorsement by the Consumer Rights Commission? According to the complaint, it was a sham nonprofit organization set up by the defendants for the sole purpose of making themselves appear legitimate. Also accused of being false: Those who claim to have partnerships or affiliations with prominent figures in the timeshare industry and the Better Business Bureau.

The complaint involves Square One Development Group, Consumer Law Protection, LLC, Consumer Rights Council, Premier Reservations Group, LLC, Resort Transfer Group, LLC, Timeshare Help Source and others, alleging multiple violations of federal and state laws, including ” Federal Trade Commission Act, Cooling Off Rule, Wisconsin Direct Marketing Rule and Wisconsin Fraudulent Misrepresentation Act. Another noteworthy allegation is that the defendants’ “high-pressure tactics and deceptive sales practices” are unfair and violate the Federal Trade Commission Act.

The case is pending in federal court in Missouri. Even at this early stage, it offers points that apply beyond the world of timeshares.

Established federal and state consumer protection laws apply to the timeshare exit industry. Many consumers are struggling to pay for their timeshares. If you say you can help them exit their timeshare or get some or all of their money back, you need evidence to back up your claims, and you must keep those promises. The same long-term principles apply to other promotions targeting financially distressed consumers.

Avoid misrepresentations of affiliation. Companies cross a line when they try to hide their allegedly illegal practices using “consumer-friendly” names or terms, or by promoting false associations with other businesses or organizations.

Honor your money-back promise. Especially when consumers are hesitant to purchase, a money-back guarantee is a highly materialistic manifestation. That’s why so many cases have been filed by the Federal Trade Commission and state attorneys general, challenging the tactics of companies that talk a good refund game but don’t deliver on their promises.

unity is strength. State and federal law enforcement officers work together to combat fraud. This case is just the latest in a series of collaborative actions aimed at protecting American consumers.