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PREATE REACHES $2.25 MILLION SETTLEMENT WITH RESORTS, CAMPGROUNDS

 HARRISBURG, Pa., Aug. 4 /PRNewswire/ -- Attorney General Ernie Preate Jr. today announced an agreement he says "will force two Pocono resorts and five Outdoor World campgrounds in Pennsylvania to give more than $2.25 million in debt forgiveness or refunds to 262 consumer victims and put an end to their deceptive sales pitches."
 Preate said the settlement with Rank Ahnert Corp. of Bushkill is "a major step forward in our drive to clean up the timeshare industry, which has a long and unacceptable history of using grossly misleading prize offers and high-pressure sales pitches to snare customers."
 The agreement settles a suit filed in June against Rank Ahnert, also known as Resorts USA, and its "Outdoor World" franchise. The defendants operate the Treetops and Fernwood resorts in the Poconos and five Outdoor World campgrounds in Lancaster, Monroe and York counties.
 The suit charged the defendants with using deceptive promotions and high-pressure sales tactics in violation of both a 1990 state law and a 1988 agreement with Preate's office.
 The law regulates contests conducted by the campground and timeshare industry and restricts the use of prize notices used by timeshare resorts to lure customers into an on-site visit, Preate said. It also requires a five-day right-of-cancellation for all purchases, he said.
 "This settlement is proof that after working hard to pass the 1990 reform law, we will work just as tirelessly to enforce it," Preate said. "Unscrupulous tactics by the timeshare industry victimize consumers and hurt the reputation of Pennsylvania's entire tourism industry. We're not going to permit that."
 Under terms of the agreement, Rank Ahnert doesn't admit wrongdoing but will pay cash settlements totaling $225,000 to 77 consumers and allow another 139 customers to cancel contracts valued at $2 million.
 Another 46 consumers who were lured to the defendants' properties with the promise of a prize will get their choice of $200 cash or a prize with a documented value of $200 to make up for prizes that didn't meet their expectations, Preate said.
 Any consumer whose credit history was damaged by Rank Ahnert will have it repaired at the firm's expense.
 Rank Ahnert also will pay the state $10,000 in cost of investigation.
 Preate said his office received more than 400 complaints against Rank Ahnert after the 1990 law went into effect.
 "Consumers who made trips to the defendants' properties to claim promised prizes often found that the promised prizes never materialized or weren't as advertised," Preate said.
 For example, Preate said, consumers who came to the site on the promise of a "package of 10 one-day holidays" found that the 10 one-day passes they were given could not be used for overnight stays, were void on "major holidays" and had so many other restrictions as to render them practically worthless.
 The Attorney General's investigation also found that once consumers were lured to the site, they were then subjected to a high-pressure sales pitch lasting up to seven hours, according to the suit.
 "Consumers were induced to buy a campground membership or one-week- a-year timeshare interval costing as much as $12,000, with total financing heaping thousands more on top of that," Preate said.
 Other consumers said they were told by sales personnel that they could cancel their contract at any time within a year, when in fact the law allows just five days to cancel.
 Salesmen also told prospective buyers that if they were not satisfied the resort would try to sell their membership, but failed to disclose that there was virtually no market for resale, according to the Attorney General.
 In addition to financial settlements for consumers, the agreement provides these key elements to prevent future abuses:
 1. Binding arbitration to resolve future disputes. An outside entity -- such as the Better Business Bureau -- will hear complaints and have the power to cancel a contract and order consumer refunds and prize awards.
 2. Three years of intensive scrutiny. Rank Ahnert's promotional mailings will be provided in advance to the Attorney General's office with a list of prizes to be awarded and documentation on the value of the prizes.
 The defendants will notify Preate's office of the name, address and telephone number of any winner of a prize valued at $5,000 or more, and the office will be permitted to make random, unannounced inspections of campground and timeshare facilities.
 3. Permanent restrictions on certain practices. Rank Ahnert is barred from the following:
 -- Mailing promotional material in envelopes that might lead a consumer to mistakenly believe it originated from a government agency, public utility, insurance company, law firm or debt-collection service or that a special mailing service was used.
 -- Using certified mail and other practices that might falsely indicate that a person had already voluntarily entered one of the firm's contests.
 -- Using notices that resemble a check or some other negotiable instrument of payment.
 Preate said the agreement emphasizes clear disclosure to consumers.
 "Until now, the firm's literature led people to believe they had definitely won a prize and that it could be claimed merely by dialing an 800 number," Preate said.
 "But from this point on, Rank Ahnert must make it crystal clear to consumers that you must visit the site and take a promotional tour before you get a prize."
 Rank Ahnert also agrees to comply with the state Consumer Protection Act and the Real Estate Act, including the provisions that allow a consumer to cancel a contract within five days without penalty.
 Preate said Rank Ahnert has appointed new managers who pledged to be more responsive to consumers and their complaints.
 "We are hopeful that as a result of this settlement and personnel changes, our problems with Rank Ahnert will end," Preate said.
 In addition to the Treetops and Fernwood resorts in the Poconos, Rank Ahnert also operates the following campgrounds: Gettysburg Farm Resort in Dover, York County; Timothy Lake Resort in East Stroudsburg and Scotrun Lake Resort, both in Monroe County, and Circle "M" Resort and Pennsylvania Dutch Country Resort, both in Lancaster County.
 The agreement was negotiated by Executive Deputy Attorney General Daniel Clearfield, director of Preate's Public Protection Division, who filed the suit on behalf of the Attorney General's office.
 The agreement has been approved by Commonwealth Court Judge Bernard McGinley.
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 /CONTACT: Jack J. Lewis, assistant press secretary of the Office of Attorney General, 717-787-5211, or, home, 717-657-9840/ CO: Pennsylvania Attorney General's Office ST: Pennsylvania IN: SU:


MK -- PH020 -- 9417 08/04/93 13:34 EDT
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Date:Aug 4, 1993
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