Illinois Attorney General issued the following announcement on Nov. 14.
Attorney General Kwame Raoul announced a settlement totaling $250,000 in relief for consumers with vacation club Global Connections, Inc. (Global Connections) and its distributors, GVN Illinois, Inc. (GVN), and Madmol, Inc. (Madmol). Raoul alleged that the companies utilized unlawful and deceptive marketing tactics to sell travel club memberships.
Under the settlement, GVN and Madmol will pay a total of $250,000 for consumer restitution. Going forward, the settlement also mandates that customers who purchase a membership during a sales presentation receive a recorded verification call providing important disclosures, including the right to cancel. The companies are also required to give customers the ability to cancel a membership up to seven days after purchase. Additionally, the companies must adopt a set of marketing and business practices that meet enhanced quality assurance, record-keeping, disclosure and reporting requirements.
“I am committed to protecting consumers by holding companies accountable for their deceptive and unlawful marketing practices that pressure consumers into spending thousands of dollars on useless memberships,” Raoul said. “This settlement ensures consumers will be informed of their rights when purchasing a travel club membership with these companies, and provides restitution to those who were misled.”
As set forth in the Attorney General’s lawsuit, GVN and Madmol sent consumers direct mail solicitations offering free gifts and prizes for attending a sales presentation at a sales location. Raoul alleged that sales representatives gave presentations misrepresenting Global Connection’s travel club in order to pressure people into signing contracts to purchase travel club memberships. After buying expensive memberships, Raoul’s complaint said customers reported being unable to schedule trips on their preferred dates and locations. Additionally, the lawsuit alleged consumers were not able to redeem the promotional gifts or prizes they were offered in exchange for attending the sales presentations.
The cost of the memberships ranged from several thousand dollars to more than $10,000 in some cases. Raoul’s lawsuit alleged that GVN Illinois and Madmol offered customers credit using retail installment sales contracts and revolving lines of credit agreements provided by Global Connections. The contracts tied customers to substantial interest rates and years of making payments.
Original source can be found here.