North Carolina Department of Justice
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Travel club banned from face-to-face marketing, AG Cooper says

Release date: 1/8/2016

Many Festiva Adventure Club members will get refunds, have contracts cancelled

Raleigh: A travel club that promised members great savings on trips but failed to deliver is now banned from face-to-face sales in the state for three years and must pay refunds, Attorney General Roy Cooper said today.

“People who wanted affordable family vacations instead got stuck with a costly travel club membership that they could hardly even use, and they deserve better,” Cooper said.  

Under a settlement with Cooper’s office, Festiva Development Group of Nevada will pay $286,144 for consumer refunds and reform the way it markets travel club memberships in North Carolina, including being banned from marketing in person in the state for three years.

Festiva, based in Asheville, sold and marketed memberships for Festiva Adventure Clubs at resorts in locations such as Atlantic Beach, Banner Elk, and Charleston. According to consumers who complained to Cooper’s Consumer Protection Division, the company used aggressive marketing tactics, promising them a free hotel stay, free laptop or free dinner to attend a 90-minute sales presentation.

Consumers say instead they got a high-pressure sales pitch that misrepresented the costs and benefits of purchasing the travel club membership. While they were told the membership meant discounted stays at in-demand resorts, consumers found that rooms were not available to book as promised and complained that the reservation system was difficult to use. One consumer tried six times to book travel through Festiva and each time was told nothing was available—unless he paid an extra fee.
 
Consumer refunds
Under a settlement reached last week, several North Carolina consumers who purchased Festiva memberships but were unable to book travel when they tried to will be able to get money back. The amount of individual refunds will vary depending on how much consumers paid, whether or not they were able to use the membership when they tried to, and what problems they experienced. Fees to join Festiva ranged from $5,000 to as much as $20,000. Some consumers will also be eligible under the settlement to have their contracts with Festiva cancelled, saving them ongoing annual fees of around $500-$1,500.

North Carolina consumers who purchased a Festiva Adventure Club membership and had problems using it should file a complaint with the Attorney General’s Consumer Protection Division online at ncdoj.gov or by calling 1-877-5-NO-SCAM toll free within North Carolina. Consumers who file a complaint by February 29, 2016 will be considered for refunds and cancellation of contracts. Consumers who have already filed complaints with Cooper’s office about Festiva will automatically be considered for refunds and do not need to file again.  
 
Reforms to Festiva marketing
In addition to money back to consumers, the agreement bars Festiva from face-to-face or in-person marketing in North Carolina for three years and requires the company to make a number of permanent changes to the way it does business in the state.
 
Under the agreement, Festiva cannot: 

  • Make false or deceptive statements to consumers about the availability of resorts or the amount of money consumers can save by purchasing a travel club membership.
  • Misrepresent, directly or indirectly, the cost of its service.
  • Trick consumers to get them to attend a sales pitch by misrepresenting the nature of the presentation.
  • Cannot falsely claim that consumers have won a prize or been specially selected to receive a Festiva membership.
  • Use fake names or imply that it is a government agency or a trade association.  
 
About travel clubs
While there are some legitimate travel club memberships, consumers who pay to join a travel club frequently complain that it doesn’t meet their expectations.
 
“Beautiful pictures of exciting vacation destinations can be tempting, but many travel club offers don’t live up to the hype,” Cooper said. “Think carefully before you pay for a travel club to be sure you’re getting a good deal.”
 
If you’re considering purchasing a travel club membership:
  • Be skeptical of any company operating out of a temporary location like a motel room.
  • Beware of high-pressure sales pitches or offers that are good today only.
  • Find out how easy the membership is to use, and investigate the places it would allow you to stay.
  • Determine if it would actually save you money. Consider all fees and costs, and how often you would realistically use the travel club.

For more tips on travel clubs and other travel topics, visit ncdoj.gov/travel.
 

Contact:  Noelle Talley

Phone:     919/716-6413