Festiva Development Group reaches settlement with state
Maine Attorney General Janet Mills has released a statement that more than 800 customers of the Festiva Development Group, which runs a vacation club at a Rangeley Lake resort, have been notified that the company has reached a settlement with the state over alleged deceptive marketing and sales practices, according to the attorney general’s office, the Bangor Daily News reported.
The settlement resolves an action Mills’ office took in 2013 against six related Festiva companies based in North Carolina, their principals and the Festiva Adventure Club Members Association.
According to its website, Festiva was formed in 2000 as a vacation ownership company and has carved out a sizable niche in a number of vacation destinations in the United States. It also maintains a fleet of luxury catamarans in the Caribbean and the Greek Isles. Festiva markets and sells vacation ownership interests through a points-based membership program.
Its Maine offering, Rangeley Lake Resort, is marketed as “a four-season vacation destination where each season offers a variety of opportunities for vacationers.”
According to the attorney general’s office, “Festiva sold consumers points for memberships in its vacation club at high-pressure sales presentations held at the Rangeley Lake Resort and at its sales office on Riverside Drive in Portland. Festiva told consumers they could use points to take vacations any time at various resorts in Florida, the Carolinas, Missouri and at Rangeley Lake. However, many consumers discovered after they signed Festiva’s 40-year contract that membership in its vacation club was not what they thought.”
The statements say that consumers reported it was impossible to book a vacation because of a lack of accommodations at Festiva’s resorts, particularly at peak times and locations. Consumers who thought they could save points to use in another year found that their points could not be carried over. Many received escalating bills for maintenance fees and unexpected special assessments. Consumers who tried to cancel memberships were told they had signed a 40-year contract obligating them to pay fees and assessments even if they were unable to schedule a vacation at a Festiva resort.
The settlement provides relief to different groups of Festiva customers. Depending on the group, consumers may be released from their 40-year contract or have the term reduced to 10 years; and those who traded in a deeded timeshare week to buy a membership can get it back. Festiva will also request that credit reporting agencies remove any trade line on a consumer’s credit report related to money owed to Festiva. In addition, Festiva has agreed not to sell any Festiva Adventure Club memberships in Maine for three years.
“This was a very complex case,” Mills said in the statement, “and resolving the various complaints of 800 different consumers was a challenge. A common theme to all of these complaints was the 40-year contract and the escalating maintenance fees. We felt it was important to help get people out from under the financial burden imposed by an extremely long contract period not adequately disclosed during the sales process. This case should serve as a warning to other businesses that would try to deceive consumers into signing onto long-term contracts with fine print containing unexpected financial entanglements.”
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