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Time-share firm throws consumers a curveball before the pitch

December 09, 2009|David Lazarus

A few days before her 61st birthday on Sunday, Janet Engelbrecht received a postcard from what appeared to be a Costa Mesa travel agency. There was a birthday cake and the words "Happy Birthday!" on one side.

On the other was the surprising and welcome news that, "in celebration of your birthday," Engelbrecht would receive "two round-trip airfares to anywhere in the continental U.S.," plus a seven-day car rental if she called within 48 hours.

"We are excited for you!" the card says. "We've been going crazy trying to contact you!"

Engelbrecht told me she initially believed she'd won a free trip.

"I thought, 'Oh wow -- airplane tickets!' " she said. "Then I started to wonder who these people were. They had my birth date and address. The more I thought about it, the more disturbed I was."

She was right to be concerned. Turns out there were two problems with the deal:

She wasn't really given any plane tickets.

There's no such travel agency in Southern California.

State authorities say they'll now investigate to see whether the thousands of such birthday cards mailed out monthly represent an illegal bait-and-switch ploy.

Engelbrecht never called the toll-free number on the card. If she had, the San Francisco resident would have learned that she'd have to attend a 90-minute seminar on time-share vacation properties, and that she wouldn't necessarily be able to fly anywhere she wanted any time she pleased.

Among other conditions, she'd only be able to fly mid-week and only on a day of the airline's choosing, not hers.

"This is common," said Cindy Martin MacMillan, co-founder of a Torrance company called Timeshare Relief Inc., which assists people in getting out of time-share contracts.

"They offer you something that looks attractive, and it turns out to be an invitation to a high-pressure sales pitch for a time share and to actually have a lot of conditions you may not be able to meet."

Some people swear by time shares, insisting that they're a great way to save on vacation costs. Others end up paying through the nose for something that they say either didn't turn out as advertised or that they didn't use often enough to realize any savings.

As the real estate and travel markets have cooled, experts say, time-share sellers have grown increasingly bold in their efforts to get potential customers to attend sales pitches.

"They know they have only one shot at you," MacMillan said. "If you walk out the door without buying, you're gone."

Engelbrecht's birthday card identifies the provider of the travel arrangements as 1st Class Travel of Costa Mesa. "Travel provider is a California registered seller of travel," the card says.

The California attorney general's office, which registers all "sellers of travel" statewide, said it has no record of a 1st Class Travel in Costa Mesa.

Nor does it have any record of 1st Class Travel's real name: Global Vacations Marketing Corp., based in Mission Viejo, or that company's other alias, Global Exchange Vacation Club.

"Really?" said Tim Michalec, director of marketing for Global Vacations Marketing, when I told him what I'd learned. "That's crazy. I'll definitely follow up on that."

He subsequently blamed the registration issue on a misunderstanding and said his company was straightening things out with the attorney general's office.

Michalec said his company buys lists of potential customers from a professional list broker and mails about 40,000 birthday cards throughout California every month.

He said Global Vacations Marketing is "a very straightforward, upfront company," and that he doesn't believe the birthday cards are misleading.

However, Michalec acknowledged that the company deliberately doesn't disclose the time-share offer until people call about the ostensibly free airline tickets.

"If we said 'time share,' our response rate would probably go down," he said. "That's why we say, 'call for details.' "

Michalec also said the company uses "1st Class Travel" on the cards because "it sounds a heck of a lot better than Global Vacations Marketing."

He said he wasn't familiar with Section 17537.1 of the California Business and Professions Code, which says it's illegal "to offer any incentive as an inducement to the recipient to visit a location, attend a sales presentation or contact a sales agent . . . unless the offer clearly and conspicuously discloses in writing, in readily understandable language," all pertinent information.

This includes "a general description of the real or personal property or services which are the subject of the sales presentation and a clear statement, if applicable, that there will be a sales presentation."

Tom Pool, a spokesman for the California Department of Real Estate, said the cards from Global Vacations Marketing seem to violate the law by not clearly disclosing either the time-share offer or the required sales presentation.

"I guarantee you we'll be looking into this," he said.

Benjamin Diehl, a deputy attorney general, also said an investigation was warranted.

"This cries out for further action," he said. "This raises tremendous concerns that the company is operating in disregard of the law. It needs to be looked into promptly and diligently."

I told Engelbrecht that her concerns about the card she received from Global Vacations Marketing seem to have been well-founded.

"If they're on the up and up," she replied, "why do they have to go to such lengths to dupe people?"

Good question -- one that state officials will be asking the company any day now.

David Lazarus' column runs Wednesdays and Sundays. Send your tips or feedback to david.lazarus@latimes.com.

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