Seattle -August 3, 1999 - Washington State Attorney General Christine Gregoire today filed action against Ultima Systems, Inc. of Bothell for continuing to violate a 1997 consent decree and simultaneously filed a new lawsuit against a related travel marketer, Vacation Marketing Systems, Inc. of Lynnwood.
"The business name may have changed but the deception is the same," said Gregoire. "Vacation Marketing appears to have stepped right in and picked up where Ultima left off."
Both Ultima Systems and Vacation Marketing are involved in marketing and selling travel club memberships and travel related services. In 1997 Ultima settled a lawsuit by agreeing to stop using various deceptive practices including using "free prize" offers to entice consumers to high pressure sales presentations
Since the June 1997 deadline set up for consumers to apply for restitution under the original consent decree, more than 578 other consumers have filed complaints. While hundreds of consumers did receive money back from Ultima, the company continued to mislead consumers even after the injunction.
"These new complaints mirrored the behavior which prompted us to take the initial action," said Gregoire. "In both cases, consumers paid as much as $3,000 for memberships that didn’t deliver the travel discounts promised."
Vacation Marketing appeared on the scene in March of this year after Ultima claimed it had stopped selling new memberships and was only servicing existing customers. Michael Vasey, who is named in the Vacation Marketing lawsuit, was one of the four principals of Ultima and was named in the original action. Vacation Marketing sells the same travel club membership (known as "The Advantage") as Ultima sold, employs the same customer service staff as Ultima, and until recently, shared the same address and phone number.
In addition, Vacation Marketing allegedly used the same "free prize" offer scheme that Ultima used to entice consumers to attend their sales presentations. And, as in the Ultima action, the lawsuit against Vacation Marketing alleges those prizes weren’t free at all because in most cases, consumers were required to pay something in order to use them.
Vacation Marketing also promotes Pahio Vacation Ownership, Inc., a timeshare resort in Hawaii, which is also a defendant in the Vacation Marketing lawsuit. Some consumers who have purchased Ultima or Advantage memberships have been contacted by Vacation Marketing and offered an "opportunity" to trade in their travel club memberships as down payment on a timeshare membership in Pahio. Consumer complaints allege that the "orientation" session they were urged to attend in order to learn how to use their new travel club memberships is actually a high pressure timeshare sales presentation for Pahio .
"These companies need to stop using deception as part of their business strategy," said Assistant Attorney General Regina Cullen. "Consumers should be very careful before spending large amounts of money for travel club memberships and other future travel services."
The Attorney General is asking for injunctive relief against both companies, consumer restitution, civil penalties and reimbursement of attorney costs and fees. The AG is also asking that $200,000 in civil penalties against Ultima be unsuspended, and that company be assessed an additional $25,000 in enhanced penalties as well as a $2,000 penalty per violation.
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Facts for Consumers:
Find out how telemarketers obtain consumers' names and the techniques they employ to convince people to purchase their products: Telemarketing Travel Fraud."
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