June 3, 2008
Jefferson City, Mo. - The owners of a former Cape Girardeau health spa that closed suddenly last January, leaving numerous consumers holding worthless gift certificates and unable to receive refunds, will pay up to $103,000 in consumer restitution and another $4,000 to the state in costs under an agreement with Attorney General Jay Nixon. Nixon reached an assurance of voluntary compliance with Spa 151 and its former owners, Scott and Ashli Rowland, as well as a payment and guarantee agreement with former Spa 151 operator Brent Wills. The assurance of voluntary compliance was filed today in Cole County Circuit Court.
Nixon's office began receiving complaints shortly after Spa 151 suddenly closed on January 29 from consumers who purchased or held gift certificates used to obtain various products and services from the business. Purchasers of the gift certificates were left without the ability to redeem their certificates after Spa 151 closed, nor were they able to receive refunds of the money they paid to purchase the certificates.
"Consumers who paid up front for Spa 151 gift certificates did so in good faith and had no reason to believe that the business was about to close," Nixon said. "Businesses that accept full payment up front for services to be delivered to consumers in the future have an obligation to deliver those services or provide refunds, regardless if they're going out of business or experiencing financial problems."
According to today's agreements, Scott and Ashli Rowland will each pay $15,000 and Wills will pay $30,000 in restitution, for a total of $60,000, to reimburse purchasers of Spa 151 gift certificates who have filed complaints with the Attorney General's Office. The Attorney General's Office will use $7,392 of the restitution to reimburse credit card companies who have already charged back the gift certificate purchasers and re-credited consumer accounts.
Restitution will be paid to consumers who have already filed complaints with the Attorney General's Office against Spa 151 as well as consumers who file complaints against the business within 90 days of today's agreements. Should claims for restitution exceed $60,000, Scott and Ashli Rowland and Brent Wills will be liable to cover up to $43,000 in additional claims. Should payment on additional claims fail to be made, the Attorney General's Office will draw upon a letter of credit obtained by Wills with First Midwest Bank in Jackson on which the Attorney General's Office is the beneficiary.
In addition, Wills is also required to make a payment of $2,000, and Scott and Ashli Rowland $1,000 each, to the state to cover the costs of the investigation and enforcement of the case.
Consumers who wish to file a claim against Spa 151 may do so by contacting the Attorney General's Consumer Protection Hotline at (800)392-8222, or by going online at ago.mo.gov.