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David Siegel Back in the News Again
3/30/2016
The first time we wrote about Westgate Resorts' CEO, David Siegel, was to talk about Versailles, David and Jackie Siegel’s 90,000 sq. ft. palatial home. The construction of the home and Siegel’s subsequent financial challenges in building it after the 2008 economic crisis, was made into a documentary that actually became a viral hit. The Siegels are back in the news again, but this time the news is not so innocuous.
Federal Consumer Watchdogs on the Prowl
The Consumer Financial Protection Bureau (CFPB) recently issued an order to determine if Orlando-based Westgate Resorts' sales people are violating federal law. According to a March 25 Orlando Sentinel article, a probe was launched to gather information on Westgate's timeshare selling and finance tactics. The Bureau order stated that it had received consumer complaints that suggested Westgate sales representatives made statements directly related to financing.
An attorney for Westgate, Kate Saft of Greenspoon Marder, provided this written response to the accusations, "Westgate cannot comment on the pending investigation except to say that it believes that it is in compliance with all consumer protection finance requirements under the CFPB’s jurisdiction."
Promises Unkept
Westgate already lost a legal war over alleged high-pressure sales tactics in Tennessee this past December. In the Tennessee lawsuit, Nathan and Patricia Overton bought a timeshare in Gatlinburg in 2011 for slightly less than $40,000. They claimed they were promised they would be able to use additional nights at other Westgate resorts for only $59 more per night. According to court testimony, when they tried to book the nights, they were told they didn't qualify. Westgate's former sales manager was accused of high pressure sales tactics and the Tennessee judge agreed. The plaintiff's lawyers said they had heard similar complaints from other Westgate buyers.
The judge ruled that Westgate engaged in intentional and fraudulent conduct, and issued a $500,000 judgement against the company. A review of the $500,000 judgement was requested by Westgate, but was turned down by the U.S. Supreme Court.
Initial Stage of Investigation
It's yet to be seen if Mr. Siegel can weather this new storm of controversy. He is adept at bouncing back from adversity, and seems to hold on to his empire even through numerous complaints and lawsuits. Westgate Resorts was founded by Siegel in 1982. More than 30 years later, the company consists of more than 13,500 villas at 28 resorts throughout the U.S. The company employs 10,000 people.
The latest investigation of Westgate began in September 2015 and is in its initial stages. Among other things, the CFPB is investigating possible violations of the Fair Debt Collection Practices Act, the Electronic Funds Transfer Act, and the Fair Credit Billing Act.
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