June 25, 2008
Jefferson City, Mo. - A North Carolina business that allegedly used false and misleading sales tactics in selling timeshares at the Cabins at Green Mountain near Branson will pay $324,393 in restitution to consumers, $5,000 in civil penalties and $10,000 to the state in costs under an agreement announced today by Attorney General Jay Nixon. Nixon's assurance of voluntary compliance with Festiva Resorts LLC of Asheville, N.C., filed today in Cole County Circuit Court, also stipulates that the business stop violating Missouri state consumer protection laws by utilizing such sales tactics.
Nixon filed a lawsuit against Festiva in November 2005, alleging the business violated Missouri consumer protection laws by misleading customers into buying timeshares. The lawsuit alleged Festiva lured consumers by falsely promising to:
The Attorney General also alleged that Festiva did not provide consumers with enough time to make decisions, creating a sense of urgency and a high-pressure sales environment.
Under today's agreement, Festiva will stop using false and misleading sales pitches while marketing and selling timeshares in the future. In addition, the company will pay a total of $324,393 in restitution to consumers, including $106,885 to consumers who have filed unresolved complaints with the Attorney General's Office prior to June 25 and have utilized their timeshare at least once, and $217,508 to consumers who have filed unresolved complaints with the Attorney General's Office prior to June 25 and have never used their timeshare.
Consumers who have used their timeshare on at least one occasion have the option of deeding their timeshare back to Festiva and receiving a partial refund, of retaining their timeshare and receiving a small cash payment or of retaining their timeshare and receiving a free status upgrade. Consumers who have never used their timeshare will be refunded a substantial percentage of amounts they paid to Festiva if they agree to deed their timeshare back to the company.
Festiva will also pay a civil penalty of $5,000 as part of today's agreement, and $10,000 to the state to pay for the costs of the investigation and enforcement of the case.