AUGUSTA, Maine — A Nevada company sold a bogus points-based vacation package to more than 1,000 Mainers, according to Attorney General Janet Mills, who filed a 10-count lawsuit against Festiva Hospitality Group in Kennebec County Superior Court last week.
The state alleges that Festiva sold Maine consumers “points” for membership in a vacation club during high-pressure sales presentations held at the Rangeley Lake Resort and at its sales office on Riverside Drive in Portland.
Buyers were told that points could be used to vacation at resorts around the country, including at Rangeley Lake. Additionally, Mainers who owned shares in the Rangeley Lake Resort were pressured to sell their shares to Festiva, the lawsuit states.
Those former shareholders were told their regular maintenance fees would decrease and that booking vacations at Rangeley Lake or elsewhere would become easier with club membership.
Neither claim was true, Mills asserts. Club members often were unable to book any vacations that fit their schedule and location preference, the lawsuit states.
“They were also surprised to receive bills for higher and higher maintenance fees and special assessments,” according to a release from the attorney general’s office. “Consumers who tried to cancel their memberships were told they had signed a 40-year contract obligating them to pay fees and assessments, even if the purchaser is unable to schedule a vacation at a Festiva resort.”
In a prepared statement, Mills said, “Festiva promised dream vacations, but delivered deception.”
“Festiva pressured Maine consumers into buying an expensive but basically worthless product using misleading tactics,” she wrote. “Festiva tells them membership in its vacation club is a convenient and inexpensive way to vacation, but the reality is exactly the opposite. Consumers end up paying too much money for too long a time for something that never materializes.”
Linda Conti, assistant attorney general handling the Festiva case, said more than 1,000 Mainers were sold a bill of goods and that many of them had called the state to allege unfair business practices by Festiva.
“Certain important information was not conveyed to consumers, and it was done in a rushed, high-pressure atmosphere where consumers did not have the opportunity to read the documents they were signing,” Conti said in an interview Tuesday.
Conti also said Mainers paid between $4,000 and $6,000 for club membership, not to mention a growing array of annual or biennial “maintenance fees” that grew every year.
The sales techniques — as well as the packages sold and benefits promised, which didn’t match the product actually received — amount to 10 separate violations of Maine’s Unfair Trade Practices Act, the AG’s lawsuit states.
The state is seeking civil penalties, reimbursements for members and a court order for Festiva to stop any “deceptive practices.”
Festiva is represented by Portland attorney Eric Wycoff of Pierce Atwood. On Tuesday, Wycoff said he would not comment on the merits of the case, but said that the company would contest the charges.
Festiva has “an established record of providing quality vacations to over 20,000 club members every year,” he said in an email. The firm ”is also committed to ensuring that its sales processes comply with all applicable laws and provide potential members with an accurate picture of the benefits and obligations of a club membership.
“Given that the club has thousands of satisfied members, Festiva is proud of the job it has done in this regard,” he said.
Follow Mario Moretto on Twitter at @riocarmine.