Acting Attorney General Matthew J. Platkin and the Division of Consumer Affairs announced today that a lawsuit by the State has resulted in a New Jersey-based timeshare rental and resale services company and its owner being ordered to pay over $10 million – including $9.32 million in civil penalties – and being permanently barred from doing business in New Jersey.
In a five-count lawsuit filed in Essex County Superior Court last November, the State alleged that William Andrews Burns LLC (WAB) and its owner, William O’Hanlon, operated a telemarketing scheme that preyed on timeshare owners, many of whom were elderly, and many of whom had been previously victimized by other scams.
Specifically, the State’s lawsuit alleged, WAB cold-called timeshare owners and used high-pressure sales tactics and misrepresentations to persuade them to pay WAB large upfront fees in exchange for WAB’s offer to rent or resell their timeshares.
The advance fees ranged from $594 to $2,899 and were typically deducted directly from consumers’ bank accounts.
The State’s complaint alleged that WAB touted a “Money Back Guarantee” and assured consumers there was virtually no risk in signing up for its services.
Among other things, the defendants guaranteed owners they would receive thousands of dollars in rental income for each week WAB rented out their timeshares for them and promised to refund their advance payments within 180 days if WAB failed to deliver.
However, the complaint noted that the State was unable to identify a single timeshare owner who received rental or sale income after signing on with WAB, and most refunds never materialized.
“These defendants took advantage of consumers – many of them senior citizens – by taking their money in exchange for what turned out to be empty promises,” said Acting Attorney General Platkin.
“In New Jersey, we have strong laws against this kind of predatory conduct, and we are committed to using them to hold dishonest companies and individuals accountable.”
The State began its investigation after reviewing more than 50 consumer complaints about WAB.
The investigation revealed more than 100 complaints from consumers around the U.S. -- including some from elderly consumers who did not even own timeshares.
In one instance, the company collected $2,865 from a 94-year-old consumer to rent a timeshare the consumer no longer owned, and on another occasion, convinced an elderly consumer who had never owned a timeshare to pay $1,999 for rental services.
In addition to its other allegations, the State’s complaint alleged that WAB offered unwanted collection services to consumers who had purchased its offered rental or resale services—without disclosing that such services involved an additional fee.
As part of these collection services, the defendants promised to recover money for consumers from companies that had operated other timeshare-related scams.
Instead, WAB tried to pocket chargebacks from consumers’ credit card companies by fraudulently posing as a friend of the consumer – a friend ostensibly helping the consumer review past statements and obtain reimbursement for alleged unauthorized credit card transactions.
The State’s complaint alleged WAB and O’Hanlon violated the Consumer Fraud Act and state advertising regulations by engaging in unlawful conduct that included:
- representing on phone calls to consumers that WAB would rent or sell the timeshares and provide that income to the consumers when such was not the case;
- withdrawing funds from consumer bank accounts without authorization to do so; and
- advertising in emails, text messages and telemarketing calls a money-back guarantee but then refusing to provide requested refunds when they failed to rent or resell consumers’ timeshares.
In addition to monetary relief totaling more than $10 million, the relief secured in the default judgment includes, among other things:
- A finding that the acts and practices of WAB and O’Hanlon constitute multiple instances of unlawful practices in violation of the Consumer Fraud Act and Advertising Regulations.
- A finding that O’Hanlon is personally liable for WAB’s violations.
- A permanent injunction against WAB and O’Hanlon from owning, operating, or otherwise managing any business or other entity in the State that advertises, offers for sale, sells, and/or performs rental and sales assistance services for timeshare owners (“rental services”), and/or services to collect or recover money for consumers who allegedly lost money in previous scams (“collection services”).
- A permanent injunction against WAB and O’Hanlon from advertising, offering for sale, selling, or performing such rental services and/or collection services within the State of New Jersey.
- An order permanently canceling WAB’s certificate of formation in the State of New Jersey.