SEATTLE (AP) — A “timeshare exit” firm accused by the Washington state Attorney General’s Office of misleading customers must refund some of its former clients.
The terms of a consent decree filed Tuesday in King County Superior Court say Reed Hein & Associates LLC of Kirkland must give money back to clients who paid the company to help them escape their timeshares, The Seattle Times reported.
The firm also faces $22 million in penalties and legal fees, but will only pay $2.6 million if it adheres to the terms of the consent agreement. The agreement compels the company to halt making inaccurate claims about its abilities to get timeshare owners out of their financial obligations to resort developers.
Reed Hein was established in 2012 by Trevor Hein and Brandon Reed after Reed attended a trade show where he “noticed a long line at a booth selling timeshare exit services.”
Washington state Attorney General Bob Ferguson sued Reed Hein last year, alleging the company’s promise to “get you out (of your timeshare) or give you every penny back” was a scam that bilked clients for up to $8,795 per timeshare without delivering results in many cases.
Reed Hein proved unable to help nearly half of its nearly 32,000 clients nationwide, the AG contended in the suit, but made inflated claims to woo new customers. Reed Hein merely provided customers with a script they could use to negotiate their own exits, or advised them to stop making payments on their timeshares, knowing that would lead to a credit-trashing foreclosure, the suit said.
And despite its stated 100% money-back guarantee, many unhappy Reed Hein clients were never able to get a refund, according to the AG’s complaint.
“Reed Hein deserves its F rating from the Better Business Bureau,” Ferguson said in a statement Tuesday. “Their dishonesty and reckless behavior had grave financial consequences for its customers.”
Steven Fogg, attorney for Reed Hein, cast the consent decree as a win for resort developers selling timeshares.
Reed Hein has also faced litigation from resort developers Diamond Resorts, Westgate and Wyndham, claiming that Reed Hein falsely advertised its ability to get clients out of their timeshare contracts. Reed Hein reached settlements this year with Westgate and Wyndham.
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