Court Finds Escondido's Welk Resorts Made False Promises and Statements
June 4, 2020
California is the leader of the pack when it comes to consumer protection. Courts are sympathetic to instances where the consumer is told one thing and given another.It appears Welk Resorts in Escondido made certain promises to entice consumers to buy into their programs. It seems the company's promises were not met, and a California court found the organization guilty and requires them to pay millions as reparations. This could be another reminder that honest representations need to be used when selling timeshare interests.
Timeshare sales tactics are known to be agressive. This case may set a precedent that is designed to protect consumers.
Escondido’s Welk Resorts to Pay Millions After False Timeshare Promises, DA Says
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 Escondido-based company denied any wrongdoing and noted that it immediately responded to complaints when first notified.
“Welk Resorts took immediate corrective action when first alerted to these issues nearly five years ago,” the company said in a statement. “Today, we are happy to have reached agreement on a resolution with the state of California and to have built one of the strongest and most transparent sales compliance programs in the timeshare industry. It’s important to note that no court has found that Welk Resorts violated the law, nor has the company admitted any wrongdoing.”
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.”
Welk Resorts said timeshare owners with questions about how this resolution may affect them can visit a special online site for more information.
Updated at 2:50 p.m. June 3, 2020
— From Staff and Wire Reports
ESCONDIDO’S WELK RESORTS TO PAY MILLIONS AFTER FALSE TIMESHARE PROMISES, DA SAYS was last modified: June 4th, 2020 by Debbie L. Sklar
In the end, agressive sales tactics are just that. There is no reason to say "Yes" to paying money for something that is not wanted or needed. Will power is the only issue here. Buyers must be willing to say "No thank you" to keep from making mistakes that cost thousands of dollars. The courts are there to judge whether the defendent actually did cause harm through egregious lies. Evidently, Escondido's Welk Resorts management was deemed to have done enough to enable the plaintiffs to reach a settlement.