Wisconsin Wins $566,831 Judgment Against Timeshare Exit Company and Its Owners

The bottom line: unregistered telemarketing and Do Not Call violations were core claims in a case about a deceptive service, and the owners were held to account personally.

The business model

According to the Wisconsin Department of Justice (DOJ), Nationwide used telephone and direct mail solicitations to bring Wisconsin consumers to sales presentations about their "timeshare exit" services. The state says the defendants and their agents then misled consumers into buying expensive timeshare exit services that they often failed to deliver.

The allegations

The state sued Nationwide Transfer in April 2021, upon referral from DATCP. It later amended the complaint to include Miles and Hammit. The amended complaint alleges:

1. Unregistered telemarketing. Nationwide made thousands of telemarketing calls to Wisconsin numbers without registering as a telephone solicitor, as required by state law.
2. Do Not Call violations. Nationwide made thousands of calls to Wisconsin numbers listed on the Do Not Call Registry, in violation of Wisconsin law.
3. Deceptive mailers. Thousands of mail solicitations failed to identify the principal seller and misrepresented that Nationwide had specific information about the recipient's timeshare.
4. Personal liability. Miles and Hammit were personally liable for the company's violations of Wisconsin direct marketing laws.

The judgment

Of the $566,831.20 total:

1. $231,079 goes to DOJ for restitution to 49 customers who did not receive the services they paid for.
2. About $230,000 covers a civil forfeiture, court fees and surcharges. (The release prints the figure as "$230,00"; the remainder of the total is $230,000.)
3. $105,752.20 reimburses DOJ and DATCP for costs and attorney's fees.

The injunction also includes conditions if the defendants resume marketing to Wisconsin residents:

1. They may not mislead consumers about their timeshare exit services.
2. If they offer a 100% money back guarantee, they must escrow all upfront payments until the services are complete.
3. They must document every timeshare exit that they claim to obtain.
4. They must refund customers who can verify that Nationwide did not get them out of their timeshare, or who got out on their own after paying Nationwide.

The Wisconsin Legislature's Joint Committee on Finance approved the resolution on September 13, 2023.

What this means for you

1. State registration rules matter. Wisconsin requires telephone solicitors to register. Both this case and Wisconsin's previous N.C.W.C. settlement began with that requirement.
2. Do Not Call claims stack on top of deception claims. The calling violations gave the state an independent, easy to prove theory.
3. Owners are not insulated. The amended complaint named the co-owners personally.
4. Phone plus mail is still telemarketing. Using calls to book in-person sales presentations does not take a campaign outside the rules.
5. Money back guarantees can come with escrow strings. If you advertise a guarantee, a regulator may make you hold the money until you deliver.