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Timeshare Promoters Face Deceptive Marketing Charges

Companies used fake prizes to lure consumers into seminars

October 16, 2008

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Four Florida-based companies face charges in Pennsylvania of illegally marketing vacation packages, using "free" airline ticket offers and other worthless prizes to lure consumers into aggressive and deceptive timeshare presentations.

The 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," Pennsylvania Attorney General Tom 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

Bluegreen representatives are accused of calling 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. They were also promised free gasoline and meals when they collected their prize, if they attended a 90-minute timeshare presentation.

The lawsuit claims consumers who were contacted by Bluegreen were not actually randomly selected prize winners. Instead, virtually all who entered the contests were contacted and falsely told that they were prize winners.

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.

High Pressure Sales and False Advertising

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.

The lawsuit says numerous deceptive statements were made to consumers during these presentations in an effort to get them to sign contracts immediately. They included 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.

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 says "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.

Contracts used by Bluegreen allegedly 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 also is accused of violating a state law that requires all consumer contracts to be written in easy-to-understand terms.

"Do Not Call" Violations

Bluegreen made numerous calls to consumers who were on Pennsylvania's Do Not Call list, allegedly basing those calls on referrals from other customers, according to the lawsuit. 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."

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