DALLAS (CN) - A self-proclaimed consumer advocate is a "sham" who lies about Silverleaf Resorts to induce timeshare owners to pay hefty up-front fees for help that never arrives, Silverleaf claims in court.
The Dallas-based timeshare company sued Advocate for the Consumer (Mediation) dba Legal Advocate for the Consumer and its owners Charles H. Williams and Glenda Williams in Dallas County Court on Thursday.
Silverleaf claims that It says Advocate for the Consumer is a "sham entity" that "significantly interferes" with Silverleaf's and other timeshare companies' legitimate businesses.
"Defendants made false allegations and published defamatory statements about Silverleaf in order to induce Silverleaf timeshare owners to pay significant up-front fees on the basis that defendants would 'assist' owners in terminating their contracts with Silverleaf," the 12-page complaint states.
"Once owners paid their fee and signed up for these services, defendants continued to defame and interfere (so as to lure their next victim), but performed no work on the owners' individual cases aside from providing and/or mailing in form letters." Advocate for the Consumer's fees range from $1,500 to $1,600 fee, Silverleaf claims.
It says the defendants promotes their business "as a mediation company, equipped with a team of lawyers, paralegals and former timeshare executives, that could assist consumers in 'getting out' of their timeshare contracts and obtaining refunds of their timeshare membership purchase. Defendants also promised that they would negotiate with Silverleaf for refunds of funds that owners had already paid under their timeshare contract."
Silverleaf operates timeshare resorts in at least six states; its six Texas resorts attract more than 70,000 owners. It claims says the defendants obtained its client lists and systematically cold-called them in spite of the clients not wishing to terminate their timeshares.
"A large percentage of Silverleaf's business is repeat business from owners, including existing owners' purchase of additional units, upgraded units, and the like," the complaint states. "Accordingly, customer relations and goodwill are vital to Silverleaf's success."
Silverleaf claims the defendants posted "Silverleaf Resorts are liars" on Advocate for the Consumer's Facebook profile and made similar comments on its LinkedIn profile. It says the defendant's solicitations were full of "unsubstantiated, false and defamatory" claims.
"After receiving the up-front fee, defendants instructed, encouraged, and induced owners to breach their timeshare contracts with Silverleaf by stopping payments to the company immediately, which, of course, subjects the owners to potentially disastrous legal and financial harm, including foreclosure, lawsuits, deterioration of credit score, loss of principal payments made, and loss of enjoyment," the complaint stated. "Defendants also instructed, encouraged and induced owners to stop communications with Silverleaf, thereby exasperating the owners' problems."
Silverleaf claims the defendants told owners to justify their lack of payments by making false claims.
"They were told, in essence, that a good offense makes for a great defense," the complaint states. "The ACA provided the owners with form letters filled with prefabricated allegations against Silverleaf and either submitted the letter to Silverleaf itself or instructed the owners to do so."
The defendants also led timeshare owners to believe they had attorneys as partners in the business who would work on their case and sue, if necessary. "One owner was even told that defendants had 'initiated litigation' on his behalf; another was told that his case was 'in mediation,'" the complaint states. "However, owners never saw any evidence that defendants were actually pursuing such legal remedies."
In April 2013, Texas Attorney General, now Governor-elect Greg Abbott, sued the defendants in Dallas County Court.
Abbott's office made similar accusations, of no work being performed; an injunction and asset freeze were issued the next month.
Advocate for the Consumer could not be reached for comment Thursday evening. Silverleaf seeks actual and punitive damages for tortious interference with contracts, intentional interference with prospective business relations, defamation and business disparagement. It is represented by Mark Shoffner with Andrews Kurth in Dallas.
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