Seattle - Nov. 1, 2000 - A Lynnwood vacation club marketing firm that that has been the target of more than 150 consumer complaints will have to pay restitution, civil penalties and fees, according to a settlement announced today.
In papers filed in King County Superior Court by the state Attorney General’s Consumer Protection Division, Vacation Marketing Systems and its owner, Michael Vasey, must pay an undetermined amount of restitution to consumers and $40,000 in fees. Civil penalties of $100,000 will be suspended if the defendants keep their promise not to break consumer protection laws in the future.
The state’s lawsuit was filed in August of 1999. The firm was accused of using deceptive sales tactics, including using "free prize" offers to entice customers into high pressure sales presentations.
In the settlement, Vacation Marketing Systems is prohibited from misrepresenting material information to consumers, including the size, quantity and availability of discounts, its ability to respond to consumer questions and complaints, and misrepresenting the nature of any of its "orientation" presentations.
The settlement also requires the firm to adequately disclose the value of any prize, the odds of winning and any restrictions placed on the prize.
The company also must either refund money to consumers who file a complaint with the Consumer Protection Division or enter into arbitration to resolve those complaints. Today’s settlement traces its roots to a case against Ultima Systems, Inc., of Bothell, which settled a lawsuit with the Attorney General’s office in 1997.
Vacation Marketing appeared on the scene in March of 1999, shortly after Ultima claimed it stopped selling new memberships known as "The Advantage" -- a travel membership that promised deep discounts on travel and accommodations. Vacation Marketing sold the same travel club membership package as Ultima, employed the same customer service staff, and until last year, shared the same address and phone number.
Vacation Marketing, like Ultima before it, allegedly used a "free prize" offer scheme to entice customers to sales presentations. Those prizes were not free at all because in most cases, consumers were required to pay something in order to use them. The lawsuit also alleged that later meetings held to teach consumers how to make the most of their travel club memberships were actually high-pressure attempts to sell them interests in timeshare resorts marketed by Pahio Vacation Ownership. The state settled with Pahio Vacation Ownership last August.
"The business’s name may have changed, but the game was the same — deception," said Attorney General Christine Gregoire. "In both cases, consumers paid as much as $3,000 for memberships that didn’t deliver the travel discounts promised."