source: http://oag.ca.gov/news/press_release?id=1149&y=2003
COMPLAINT FOR INJUNCTION, CIVIL PENALTIES, OTHER EQUITABLE RELIEF THE PEOPLE OF THE STATE OF CALIFORNIA, Plaintiff, v. TRENDWEST RESORTS, INC., Defendant.
4. Defendant markets and sells timeshare and vacation contracts, and provides,
furnishes, contracts for, arranges, or advertises that it can or may arrange, or has
arranged, wholesale or retail air or sea transportation. As such, Defendant is subject to
Department of Real Estate (hereinafter, “DRE”) laws and regulations and to the laws
affecting a “seller of travel,” as defined in Business and Professions Code section
17550.1.
III.
IV.
FIRST CAUSE OF ACTION
Untrue and Misleading Statements in Violation of
Business and Professions Code Section 17500
(By Plaintiff Against Defendant Trendwest)
COMPLAINT FOR INJUNCTION, CIVIL PENALTIES, OTHER EQUITABLE RELIEF
members of the public to attend a sales presentation for a timeshare product and related
services, has made untrue or misleading statements. The untrue or misleading statements
were disseminated before the public in California, orally and in writing. Defendant
Trendwest’s communications, which violate Business and Professions Code Section
17500, include but are not limited to the following:
A. Informing consumers that they were finalists in winning a certain
promotional item or that they had already won a specific prize when such was not
true;
B. Misrepresenting to consumers the value of prizes, incentives, or
promotional items by stating that the incentives have a higher retail value than the
incentives actually have;
C. Misrepresenting to consumers the value and utility of promotional
incentives by offering the incentives without disclosing at the time of the offer all
of the terms, limitations or conditions which must be followed in order to utilize
the incentive;
D. Misrepresenting to consumers the nature of what is necessary to
receive a promotional incentive, gift or prize, by failing to state the requirement to
attend a sales presentation to obtain the promotional incentive;
E. Misrepresenting to consumers the nature of the vacation credits to be
purchased by failing to adequately disclose that the credits expire;
F. Misrepresenting to consumers the nature of the vacation credits
offered for sale, allowing the purchaser to believe the credits have a fixed value or
exchange rate, when the credits are actually subject to change in their valuation;
G. Misrepresenting to consumers the nature of a timeshare purchase as
having good value as a financial investment;
H. Misrepresenting to consumers the location of resorts or availability
of services;
I. Misrepresenting to consumers the quantity of vacation credits
needed to stay at a particular resort at a particular time or misrepresenting the
quantity of vacation credits sufficient to obtain any other benefit or service;
J. Misrepresenting to consumers the ability or ease with which an
owner may check the availability of a property or service, make a reservation, or
exchange vacation credits;
K. Prior to the execution of any contract, misrepresenting to consumers
the period of time that must elapse before a purchaser may use and/or make a
reservation to stay at a resort or other facility, or use any other goods, service, or
benefit;
L. Prior to the execution of any contract, misrepresenting to consumers
the future annual cost of participating in an exchange program and/or the cost of
annual maintenance and association dues;
M. Misrepresenting to the consumer, by failing to adequately disclose,
that part of the timeshare contract involves a negative option contract;
N. Representing that an offered “reduced” price of a timeshare interest
(vacation credits) may only be accepted at the time of the current sales
presentation, when such was not true; and
O. Misrepresenting to the consumer that Trendwest was not responsible
for verbal representations made by its agents.
P. Misrepresenting to consumers the estimated length of the sales
presentation they are scheduled to attend.
14. Within four years prior to the filing of this complaint, Defendant Trendwest
engaged in the following acts, among others, of unfair competition as defined in Business
and Professions Code section 17200:
A. Using and offering a gift, prize, or promotional incentive in an
untrue or misleading manner, in violation of Business and Professions Code
sections 17537, 17537.1 and 17537.2;
B. Offering a promotional incentive without disclosing all of the terms
and conditions of the offer, in violation of Business and Professions Code sections
17537.1 and 17537.2;
C. Offering a promotional incentive without sending the required
written confirmation of the offer, in violation of Business and Professions Code
sections 17537.1;
D. Offering a promotional incentive without disclosing that a certificate,
coupon, or rain-check redeemable for fulfillment for goods and/or services will be
provided as a promotional incentive, in violation of Business and Professions Code
Sections 17537.1(c), (d), or (e);
E. Failing to disclose prior to the execution of any contract or offer, in
clear and conspicuous language, that accrued vacation credits are subject to
expiration if not used within a stated period of time;
F. Failing to disclose prior to the execution of any contract or offer,
that vacation credit valuations and redemption schedules are subject to adjustment
up or down, and that an association decision could result in a diminution of
vacation credit values;
G. Stating that a timeshare purchase constitutes a financial investment;
H. Failing to provide to WorldMark members the easy ability for an
owner to check the availability of a property or service, or make a reservation or
exchange vacation credits, when having represented such existed;
I. Failing to adequately disclose, prior to the execution of any contract,
the period of time that must elapse before a purchaser may use and/or make a
reservation to stay at a resort or other facility, or use any other goods, service, or
benefit;
J. Failing to adequately disclose, prior to the execution of any contract,
the annual cost of participating in an exchange program and/or the cost of annual
maintenance and association dues, when applicable;
K. Failing to adequately disclose to the consumer the expected costs for
initial and renewal terms and to obtain the express written authorization from the
consumer for any purchase, subscription or enrollment which Defendant arranges
that results in automatic charging or billing of initial or periodic amounts to the
consumer;
L. Selling products, including a trial program with a rebate, without the
required authorization from the Department of Real Estate;
M. Failing to post the Public Report in a conspicuous and unobstructed
manner where Defendant is selling timeshare interests, in violation of
Section 11018.1(b) of the Business and Professions Code;
N. Failing to adequately inform prospective purchasers that he or she
can take as much time as he or she requires in order to read the Public Report and
any and all other documents necessary to consummate a sale before leaving the
premises or signing a contract or not allowing prospective purchasers the time and
opportunity to do so;
O. Attempting to disclaim responsibility for the verbal representations
P. Failing to adequately disclose the consumer’s right of rescission, in
violation of Section 11024 of the Business and Professions Code;
Q. Failing to provide to consumers all of the procedures necessary to
effectively cancel the purchase and failing to fully and promptly honor the
consumer’s right of rescission when consumers properly exercised their right of
rescission;
R. Acting as a seller of travel within the definition of Business and
Professions Code Section 17550.1, and receiving money or other valuable
consideration, without being registered under Business and Professions Code
Section 17550 et seq;
S. Acting as a seller of travel within the definition of Business and
Professions Code Section 17550.1, but failing to give the disclosures required by
Business and Professions Code Section 17550 et seq;
T. Failing to comply with the requirements of any applicable federal or
California law relating to a “do not call list,” including but not limited to the
requirements to forbear from making calls or failing to comply with a consumer’s
request to place the consumer’s name and number on the “do not call list”;
U. Using telephonic marketing methods unlawful in California, such as
use of an automatic dialing device without an unrecorded introduction;
V. Offering as a promotional incentive any travel certificate or coupon
which will not be readily redeemed without the consumer paying for an upgrade at
additional cost to the consumer;
W. Misleading consumers as to the estimated length of the sales
presentation they are scheduled to attend, in violation of Business and Professions
Code section 17537.1;
X. Having a consumer execute a contract in a language other than a
language in which the consumer appears to be fluent, and other than the language
in which material portions of the sales presentation was given;
Y. Failing to investigate consumer complaints which allege unlawful
business practices purportedly made during the solicitation, sales presentation, or
at any time within the applicable cancellation period, and to take appropriate
corrective action;
Z. Contacting a consumer in violation of applicable debt collection laws
or any bankruptcy orders;
AA. Allowing sales agents to continue a sales presentation, over the
objections of the consumer, and by allowing sales agents to follow a consumer
outside of the sale presentation building to the consumer’s car or residence; and
BB. Making those misrepresentations in violation of Business and
Professions Code section 17500 as alleged in paragraph 11 of the First Cause of
Action, which are incorporated herein by this reference as though fully set forth.
Dated: October 29, 2003
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