Consumers Notified of Festiva Settlement With the State of Maine

February 29, 2016

AUGUSTA – Maine Attorney General Janet T. Mills announced that over 800 consumers who were customers of Festiva Development Group have been notified of the relief that Festiva is providing pursuant to a settlement reached by the parties through court-ordered mediation. The settlement resolves an action the Maine Attorney General’s Office brought in November 2013 against six related Festiva companies based in North Carolina, their principals and the Festiva Adventure Club Members’ Association. The Attorney General’s Office alleged that the companies engaged in unfair and deceptive practices in marketing and selling Festiva’s points-based vacation club memberships in Maine.

Festiva sold consumers points for memberships in its vacation club at high pressure sales presentations held at the Rangeley Lake Resort and at its sales office on Riverside Drive in Portland. Festiva told consumers they could use points to take vacations any time at various resorts in Florida, the Carolinas, Missouri, and at Rangeley Lake. However, many consumers discovered after they signed Festiva’s 40-year contract that membership in its vacation club was not what they thought.

Consumers reporteed that it was impossible to book a vacation because of a lack of accommodations at Festiva’s resorts, particularly at peak times and locations. Consumers who thought they could save points to use in another year found that their points could not be carried over. Many received escalating bills for maintenance fees and unexpected special assessments. Consumers who tried to cancel memberships were told they had signed a 40-year contract obligating them to pay fees and assessments even if they were unable to schedule a vacation at a Festiva resort.

The settlement provides relief to different groups of Festiva customers who had different experiences with the company. Based on customer files and information provided by consumers, Festiva has written to each consumer entitled to relief to advise the consumer of the relief offered and the steps that must be taken to obtain the relief. Depending on the group, consumers may be released from their 40-year contract or have the term reduced to 10 years; and those who traded in a deeded timeshare week to buy a membership can get it back. Festiva will also request that credit reporting agencies remove any trade line on a consumer’s credit report related to money owed to Festiva. In addition, Festiva has agreed not to sell any Festiva Adventure Club memberships in Maine for three years.

“This was a very complex case,” Attorney General Mills said, “and resolving the various complaints of 800 different consumers was a challenge. A common theme to all of these complaints was the 40-year contract and the escalating maintenance fees. We felt it was important to help get people out from under the financial burden imposed by an extremely long contract period not adequately disclosed during the sales process. This case should serve as a warning to other businesses that would try to deceive consumers into signing onto longterm contracts with fine print containing unexpected financial entanglements.”

Consumers who did not file a complaint or survey about Festiva prior to the settlement may still be able to receive relief from the company. Consumers with questions may contact the Attorney General’s Consumer Protection Division.

Office of the Attorney General
Consumer Protection Division Festiva Complaints
State House Station 6 Augusta, ME 04333-0006 Consumer.mediation@maine.gov

Attorney General Janet T. Mills commended Assistant Attorney General Linda Conti, Assistant Attorney General Carolyn Silsby and the many staff and volunteer mediators who assisted in resolution of this large case.

#