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Indiana Sues Timeshare Marketers

Promoters allegedly failed to honor refunds, award prizes, deliver the goods

December 4, 2007

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The State of Indiana is seeking penalties and restitution from three companies that operated a timeshare and travel club sales center out of Crown Point, Indiana before closing last summer.

Harbor Management Corporation, Harbor Management of Colorado, LLC, and Vacation Resort Management, Inc. are alleged to have misrepresented terms of consumer contracts, failed to provide products and services, and refused to honor refunds and prize giveaways.

“This operation was like a vacation bait-and-release program based on the information we’ve received,” Indiana Attorney General Steve Carter said. “This is a marketing strategy that has gone awry and caused thousands of dollars of damage to people along the way.”

The lawsuit alleges that the companies did business in Indiana under various assumed and fictitious names, including Harbor Resort Management Group, Harbor Management Resort Group, Harbor Resorts, Vacation Resorts, Star Vacation Club, Star Vacations, and VRM.

The violations alleged by the attorney general include:

• Failing to disclose the retail value or odds for the prizes listed in mailing notices sent to consumers
• Failing to disclose all the eligibility limitations and additional costs to receive prizes
• Failing to provide promised prizes or an adequate substitutes
• Telemarketing to consumers and making false representations of winning a prize or gift
• Failing to file the required registration to sell timeshares in Indiana
• Misrepresenting to consumers that they would receive a free prize or gift
• Misrepresenting terms of contracts with consumers
• Misrepresenting consumers’ financial obligations to third party finance companies
• Misrepresenting the consumers’ rights and remedies and obligations for refunds and cancellation terms
• Misrepresenting that they would perform the enrollment and fulfillment services for the consumer’s timeshare interests and vacation exchange club memberships.

The three companies operated from Indiana from 2005 until last summer. The companies and their principal officers also have ties to three other states, including Illinois.

Vacation Resort Management has offices in Batavia, Illinois and Oak Brook, Illinois. Harbor Management of Colorado, LLC has another location in Broomfield, Colorado.

Harbor Management Corporation has a location in Las Vegas, Nevada. The principal officers named in the lawsuit are Madeline M. Allerton of Illinois, David W. Haddad of Las Vegas, Nevada and Lisa B. Jantalezio (a.k.a. Haddad, Alonso & Rogers) with addresses listed in Arkansas & Nevada.

The lawsuit names nearly 15 consumers who entered into contracts and submitted down payments on timeshares and vacation club packages or memberships with the companies. The contracts ranged between $1,000 and $8,900. The attorney general’s office anticipates that umber to rise as more complaints are processed.

Harbor Management and Vacation Resort Management also have ties to another group sued last week by the attorney general’s office for making illegal pre-recorded telemarketing calls and for violating the Indiana Do Not Call law.

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