Attorney General Becerra and San Diego District Attorney Stephan have obtained up to $3,550,000 in restitution for consumers harmed by Welk Resort’s “misleading marketing and sales tactics,” according to a press release from the California AG’s office on Wednesday.
The settlement provides victims with the largest consumer relief package ever obtained by California for violations of California’s Timeshare Law.
The settlement was announced against Welk Resorts Inc. for its alleged misconduct in connection with the offering and sale of timeshare interests.
Welk develops and operates vacation timeshare resorts in both the U.S. and Mexico. This week’s settlement resolves allegations that Welk’s sales practices violated California’s Timeshare Law, the Vacation Ownership Timeshare Act of 2004 (VOTA), the Unfair Competition Law (UCL), and the False Advertising Law (FAL).
The proposed stipulated judgment requires Welk to provide up to $3,550,000 in consumer restitution – the largest consumer relief package ever obtained in a case against a timeshare company – and sets injunctive terms that will require Welk to implement a compliance program aimed at preventing future VOTA violations. The complaint, stipulation, and stipulated judgment were filed today in San Diego County Superior Court. The proposed stipulated judgment is subject to court approval.
Following a string of consumer complaints, Becerra’s Office, the San Diego District Attorney’s Office, and the California Department of Real Estate launched an investigation into Welk’s sales practices. Undercover operations conducted with assistance of the California Department of Consumer Affairs revealed that Welk was making false statements and misrepresentations in high-pressure sales presentations at its resort in Escondido, California. These deceptive business practices harmed consumers considering timeshare purchases.
As part of the settlement, Welk will establish a consumer restitution program that will provide up to $3,550,000 in restitution to consumers who were affected by Welk’s deceptive sales practices.
That program allows consumers who previously submitted a written complaint with the option to (1) rescind their timeshare purchase agreement with Welk and obtain a full or partial refund or, (2) retain their timeshare interest and instead obtain restitution in the form of cash, a resort credit, or additional timeshare points; and
It also provides notice to other potential victims and the opportunity for them to submit a claim for restitution in the form of cash, a resort credit, or additional timeshare points.
The restitution program provides relief to two groups. The first are consumers who purchased timeshare points from Welk between January 1, 2011 and March 2016 and have been pre-identified as eligible because they submitted a written complaint alleging a VOTA violation in connection with their purchase.
The second group are consumers who purchased timeshare points during the same time period, but who have not previously submitted a complaint related to their purchases. These consumers will be notified of the judgment and settlement terms and will be given an opportunity to submit a claim form if they believe that Welk committed a VOTA violation in connection with their purchase.
Additionally, Welk has agreed to injunctive terms that require it to implement a compliance program aimed at educating its sales and executive staff on VOTA requirements and preventing violations. The settlement also requires Welk to pay Attorney General Becerra’s Office and the San Diego District Attorney’s Office a total of $2 million in penalties and reimbursement of investigative costs.
Welk customers who have questions about the settlement or regarding their eligibility for relief under the settlement should visit www.welkresorts.com/resolution for more information as it becomes available. Consumers who wish to contact the AG’s office regarding Welk Resorts, Inc., or other consumer protection issues may do so online at oag.ca.gov/report.