SAN DIEGO (CNS) – A local timeshare company has agreed to pay up to $5.5 million to settle a consumer protection lawsuit alleging false promises were made to customers during sales presentations, the San Diego County District Attorney’s Office announced Wednesday.
According to prosecutors, Welk Resorts will pay $2 million in penalties and up to $3.4 million in restitution to timeshare purchasers who were told various things during presentations held between Jan. 1, 2011, and March 31, 2016, including that customers were buying real estate; that the value of their investment would increase; that they could easily refinance their purchase; and that they could secure vacation spots during major holidays like Christmas.
Welk Resorts was accused of misleading consumers who purchased a timeshare in the company’s Platinum Program, in violation of the Vacation Ownership and Time-Share Act of 2004. The DA’s Office said officials received “hundreds of complaints,” triggering the investigation into Welk Resorts.
In addition to $5.4 million paid to timeshare purchasers, $180,000 will be paid to the District Attorney’s Office, the state Attorney General’s Office and the Department of Real Estate, according to a District Attorney’s Office spokeswoman.
The pending settlement, which contains no admission of liability, is subject to court approval.
“The bottom line is consumers need to know what they are getting up front without false promises,” San Diego County District Attorney Summer Stephan said.
“The law protects consumers by prohibiting timeshare salespeople from overpromising with misrepresentations,” she said. “Truthful disclosures are especially important in a high-pressure sales environment such as timeshare sales. The expertise in our DA’s Consumer Protection Team was brought to bear to protect consumers from false promises in purchasing timeshares.”
Prosecutors said that in addition to the monetary settlement, Welk Resorts has made changes to its vacation timeshare sales practices and procedures, created new sales training manuals, mandatory sales training, retained compliance counsel and implemented a policy of recording contract review and signing sessions with purchasers’ consent.
“Today’s settlement sets an unprecedented example for the timeshare industry — you cannot violate the law and expect to get away with it,” said California Attorney General Xavier Becerra. “This settlement is a significant win for California consumers. It provides victims with the largest consumer relief package ever obtained by the people for violations of the Vacation Ownership Timeshare Act, returning money to the pockets of those cheated by Welk.”