Trendwest Resorts Settles State Lawsuit

Time share operator Trendwest Resorts Inc. agreed Wednesday to pay more than $4 million to settle a lawsuit filed by state officials who alleged it misrepresented products and customers’ rights to cancel contracts, disregarded valid requests to cancel and failed to honor “do-not-call” requests.

Redmond, Wash.-based Trendwest, the third-largest time share company, is owned by New York-based Cendant Corp., whose brands include Ramada, Days Inn, Avis, Coldwell Banker and Century 21. It operates 48 time share properties in the western United States, Mexico, Canada and the South Pacific, including facilities in Big Bear, Palm Springs and Oceanside.

Time share is a form of real estate ownership under which a property, usually a vacation resort, is held by a number of people, each with the right of possession for a specified time.

Trendwest didn’t admit wrongdoing but agreed to reform its business practices to settle charges brought by the state Department of Real Estate, said Atty. Gen. Bill Lockyer and James P. Fox, the district attorney for San Mateo County, where the suit was filed in Superior Court.

The action listed 16 types of false and misleading statements and 28 practices that violated a state fair-practices law, including telling consumers they had won specific prizes when they had not, misrepresenting time share purchases as a good investment and hiding costs for exchange programs, maintenance and association dues.

In a statement, Trendwest said the settlement “reflects our company’s commitment to respond effectively to any and all consumer concerns.” It said it had improved its policies and procedures, had made its employees and vendors more accountable and had repaid many of the customers who complained.

Trendwest agreed to pay restitution to consumers who purchased time share contracts since March 21, 2001, and who requested cancellation within 45 days, and to participants in the firm’s so-called Explorer Program -- a short-term, lower-cost trial offering -- who have yet to exercise their rights under that contract. Total restitution could top $2 million, said Deputy Atty. Gen. Michael B. Hughes.

Hughes said the company would pay a $625,000 fine to the state and $170,000 to San Mateo County, as well as covering costs for attorneys, a yearlong investigation and future audits of its compliance with the settlement.

Although the problems at Trendwest were “pervasive,” complaints are common industrywide for time shares, “a product that consumers do not seek out and which therefore requires a harder sell than most,” he said.