By Mike Scarcella
(Reuters) -A company that helps timeshare owners undo their contracts has sued the United States' largest privately held vacation ownership company, accusing Florida-based Westgate Resorts of scheming to eliminate competition for cancellation services.
Wesley Financial Group LLC's Orlando federal court lawsuit against Westgate, a subsidiary of Central Florida Investments Inc, claims the company violated federal advertising law and antitrust law.
The lawsuit escalates a long-running clash between the two companies in an industry valued at $10.5 billion by industry trade group the American Resort Development Association.
Timeshare properties allow more than one person to share ownership or usage rights for a property, often vacation homes such as such beach or ski condos.
Tennessee-based Wesley Financial markets itself as the country's largest timeshare exit firm, providing services to navigate what it has called a "maze of red tape" required to escape timeshare ownership.
A Westgate representative said the company "intends to vigorously defend against Wesley's lawsuit." Westgate called the complaint a "last-ditch effort" in response to a case Westgate filed in 2020 against Wesley Financial in Tennessee federal court.
Westgate, according to the lawsuit, has developed its own exit services competing with Wesley Financial and others. Wesley Financial said Westgate's program made false or misleading claims and that the company has taken steps to curb competition.
The complaint said Westgate devised "formal and informal" policies to stop owners from relying on third parties to exit timeshares. Owners "are guided to more expensive, less efficient exit products" in a scheme to block rivals, the lawsuit said.
It also said Westgate and other developers had colluded with the American Resort Development Association for "coordinated advertising" against Wesley Financial.
A representative from the Washington, D.C.-based trade association, which is not a defendant, had no immediate comment.
Wesley Financial in a statement said the company has "fought these timeshare companies before and have won and we fully expect to be victorious once again."
Westgate separately sued Wesley Financial in Nashville federal court for allegedly violating a state consumer protection law, claiming it orchestrated a fraudulent "timeshare cancellation scheme with no legitimate foundation."
In that case, Westgate is seeking damages and an injunction against Wesley Financial for allegedly causing thousands of Westgate owners to stop making mortgage payments. A trial is scheduled for February.
The case is Wesley Financial Group LLC v. Westgate Resorts Ltd et al, U.S. District Court for the Middle District of Florida, No. 6:23-cv-02347.
For Wesley Financial: John Bennett of Nardella & Nardella; and Patrick Bradford of Bradford Edwards
For Westgate: No appearance yet
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