Pennsylvania alleges $100 million time-share scam

The lure of lush tropical vistas and free airfare might have scammed more than $100 million from Pennsylvania residents, the state Attorney General's Office said yesterday.

Attorney General Tom Corbett filed consumer-protection lawsuits against four subsidiaries of the Florida-based Bluegreen Corp., an $8 billion business that launched an aggressive and deceptive statewide campaign to market time-shares, said Nils Frederiksen, Corbett's deputy press secretary.

"It's the largest and most wide-reaching, vacation-related scheme that anyone here can recall," said Frederiksen, who cited the $100 million plus as the likely loss to Pennsylvanians.

The company, which set up kiosks at most area malls and festivals, operates full-time sales centers in King of Prussia and Hershey, Frederiksen said. People were contacted, usually by phone, and told they were "prize" winners and could collect their award at the sales facility after a purported 90-minute sales seminar that sometimes lasted more than five hours, he said.

"Bluegreen is currently investigating the matter and is not able to comment on it at this time," said Lisa Thornhill, director of corporate communications.

Frederiksen said more than 5,700 Pennsylvania residents purchased Bluegreen time-shares after receiving misleading information and without being told of their right to cancel the contract within five days. Many residents were phoned repeatedly in violation of Pennsylvania's do-not-call list, he said.

"There may be some of the 5,700 who are happy with their purchase; if they are, we wish them the best," said Frederiksen, adding that many people were distressed to receive a 300-page, three-ring binder of terms after signing the sales agreement.

Although the average price of a time-share was a little more than $20,000, the company made more than double that amount in financing and hidden fees, Frederiksen said.

He said the investigation began in July 2007 after a spate of complaints regarding misleading prizes such as airline tickets or free gas. For example, "four free airline tickets" were actually booklets that offered two tickets with each high-end hotel room booked for an extended stay in selected cities, he said.

When residents showed up in King of Prussia or Hershey to claim their awards, they were subjected to high-pressure sales tactics and phony claims that prices were about to skyrocket, Frederiksen said.

"It's hard to imagine a consumer-protection law they didn't violate," he said.

The suit, which seeks restitution for misled consumers and thousands of dollars in fines, names Bluegreen Corp., Bluegreen Resorts, Great Vacations Destinations Inc., and Bluegreen Vacations Unlimited Inc.

It also seeks an injunction from the court to end the alleged illegal business practices; a hearing date has not been scheduled yet, Frederiksen said.

Consumers with complaints are being asked to call the Attorney General's Consumer Protection Hotline at 1-800-441-2555 or register online at www.attorneygeneral.gov.

In 2005, Bluegreen ranked No. 48 on Fortune's list of America's 100 Fastest Growing Companies, according to Bluegreen's Web site. The company posted $3.4 million in profits for the quarter ended June 30, with time-share owners topping 190,000, up more than 3,000 from March, according to news reports.