The founder of Turcal, Inc., a California-based timeshare- resale business named in a 1994 Federal Trade Commission lawsuit, has agreed to post a performance bond of at least $50,000 to protect customers before engaging in any direct marketing activity in the future, as part of the settlement of this lawsuit that the FTC announced today. The settlement with Turcal and its founder, Michael Cevatli, together with a second settlement with defendant Glenn Kennedy, resolves FTC allegations based on their roles in an allegedly deceptive scheme to market timeshare resale services. Under the settlements, which require the court's approval to become binding, all three defendants would be permanently prohibited from making future misrepresentations in connection with the provision of any services relating to real estate, and Cevatli would be required to post the performance bond.
A timeshare is a partial ownership interest in a vacation resort property, generally giving the owner one week's use each year.
The FTC's complaint, filed in district court in March 1994, named Turcal, doing business as Admatch Network, ProMatch Advertising Network, and Resort Condo Marketing; Michael Cevatli, also known as Mustafa Cevatli; and Glenn Kennedy. All of the defendants are based in Fountain Valley, California.
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The FTC alleged that the defendants marketed, sold, and promoted timeshare resale services to consumers throughout the United States by telephone and mail. For an advance fee of $190 to $375, the defendants falsely promised to match timeshare owners who wanted to sell their timeshares with prospective buyers, the FTC charged. Specifically, the FTC charged, the defendants falsely represented to timeshare owners that:
- they had found qualified buyers ready and willing to purchase the owner's timeshare;
- they would immediately match the owner with qualified buyers; and
- their buyers were willing to pay prices for timeshares comparable to the owner's for as much as or more than what the owner originally paid.
Under the two proposed consent judgments to settle these charges, all of the defendants would be permanently prohibited from making the misrepresentations alleged in the FTC's complaint and any other misrepresentations in connection with any type of real estate service they offer. In addition, the consent judgment with Cevatli would impose a bond requirement. Specifically, Cevatli would be permanently enjoined from engaging in any direct marketing activity -- which includes all offers to sell made by telephone, as well as offers of gifts and prizes, either by telephone or in person -- unless he first, and annually thereafter, posts a performance bond of $50,000, plus the dollar value of the previous year's unfulfilled contractual obligations related to the direct marketing activity. Each bond would remain in full force for one year from its effective date, and would remain in effect for at least three years after the date of a sales transaction. Thus, the bond could be used to provide redress to future customers should he engage in deceptive practices.
The proposed order also would require Cevatli to disclose the existence of the bond on the front of all sales materials he sends to consumers to acknowledge orders and receipt of funds.
The proposed orders contain a provision that would allow the FTC to reopen the proceeding in the event that any of the defendants made material misrepresentations regarding their financial condition.
Finally, the orders also include various reporting require- ments to assist the FTC in monitoring the defendants' compliance.
The Commission vote to file the consent judgments was 4-0. The final judgments and orders were filed in the U.S. District Court for the Central District of California, in Los Angeles, on April 12.
NOTE: The consent judgments are for settlement purposes only and do not constitute an admission by the defendants of a law violation. They have the force of law when signed by the judge.
Copies of the final judgments and orders, as well as other documents associated with this case, are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.
(FTC File No. X940027)
(Civil Action No. 94-1398-AWT(JGx))