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Attorney General Lockyer and San Mateo County DA Obtain Judgment Against Timeshare Developer

Pacific Monarch Resorts Must Make Full Restitution to Consumers
Tuesday, May 14, 2002
Contact: (415) 703-5837

(LOS ANGELES) – Attorney General Bill Lockyer today announced he has obtained a judgment against Pacific Monarch Resorts, the state's fourth-largest timeshare developer, for deceptive marketing and sales practices.

Brought by the Attorney General's Consumer Law Section and James P. Fox, District Attorney of San Mateo County, where Pacific Monarch Resorts operates a sales office, the stipulated judgment requires the company to stop deceptive marketing and sales practices, make full restitution to consumers defrauded by the company and pay $625,000 in attorneys fees, costs and civil penalties.

"Owning a timeshare is an investment that many Californians make in the hope of enjoying vacations, often in their retirement years," Lockyer said. "This judgment represents a victory for consumers and will put an end to the deceit by Pacific Monarch Resorts."

Signed by Los Angeles County Commissioner Murray Gross, the judgment was obtained against Pacific Monarch Resorts and Vacation Interval Realty, a related company. Also named as defendants were Mark Post and David Nichols Baldwin, the company's officers and part-owners; and Peter Mitchell, the company's licensed broker.

Headquartered in Laguna Hills, Pacific Monarch Resorts operates four developments: Palm Canyon Resorts in Palm Springs, Riviera Oaks Resort in Ramona, Riviera Shores Resort in Capistrano Beach and the Riviera Beach & Spa Resort in Capistrano Beach. A fifth development, the Cancun Resort in Los Vegas, currently is under construction.

The action represents the third stipulated judgment the Attorney General's Office has obtained against the company. The two earlier proceedings dealt with marketing practices that Pacific Monarch Resorts, then known as California Riviera Vacations, used to entice consumers to attend its sales presentations and its representation of timeshares as good investments. Following new complaints received by the Attorney General, the Department of Real Estate, and the Better Business Bureau, the Attorney General determined that additional injunctive terms were required. Pacific Monarch Resorts denies wrongdoing.

Under the judgment, Pacific Monarch Resorts must make full restitution of all monies paid, rescind purchase contracts and memberships in discount travel clubs and reverse any negative credit report regarding purchasers during the past two years who attempted to cancel their contracts within 45 days of purchase.

Within 75 days of the date of entry of the judgment, the company must provide to the Attorney General's Office a list of all purchasers believed to be eligible for full restitution. The judgment also grants full authority to the Attorney General's Office to inspect and copy all of the company's accounts, contracts, correspondence, financial records and other documents relating to the case. The Department of Real Estate is authorized to conduct unannounced, on-site investigations.

According to the judgment, the company in the future promises to deliver all promotional incentives offered to consumers at the end of the sales presentation and cancel any contract in which it appears that the buyers did not fully understand the terms because of language difficulties. The company must terminate sales presentations when a consumer complains about intrusive music or noise; refrain from misrepresenting its products and services, and fully inform callers about the procedures for cancellation. It also must disclose the period of time that must elapse before a purchaser may use or make a reservation to stay at a resort or other facility.

The company must notify buyers that they may cancel their contract within three days of entering into it, and clearly state, verbally and in writing, costs of annual maintenance and association dues and the period of time that must elapse before a purchaser may use or make a reservation to stay at the resort or another facility. In addition, Pacific Monarch Resorts is prohibited from using travel certificates as promotional incentives if they do not allow a holder to call a telephone number to select dates when booking a trip.

The company also agreed to fully investigate, within 30 days of receiving a complaint, all allegations that agents are making misrepresentations during sales presentations or within the three-day business cancellation period. If it finds there was a sales misrepresentation, the company must, within 45 days, offer to cancel the contract, fully refund all monies paid and reverse any negative entries on a credit report.

The company also must pay $625,000 in civil penalties and costs to the Department of Justice and the San Mateo District Attorney's Office. The Department of Real Estate will receive $50,000 of that amount to reimburse it for legal and investigative costs it incurred while investigating the company's marketing and sales practices.

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