Des Moines phone room targeting consumers who were trying to sell their timeshares.
Miller said the telemarketers took advantage of the consumers' strong desire to sell
their timeshares, because they were saddled with annual maintenance fees for
timeshares they no longer wanted or used. The defendants allegedly identified their
victims through Internet sites on which timeshare owners could list their timeshares for
The State's lawsuit, filed in June, 2002, alleged that the defendants violated the
Consumer Fraud Act by offering to buy the timeshares but requiring the consumers to
purchase an appraisal of the timeshare from one of the defendants at a cost of $400,
supposedly to be reimbursed at closing. The lawsuit alleged that the defendants took
the consumers' money for the appraisals, but didn't follow through with the purchase of
Defendants in the case included Phillip Head, a Texas resident who was identified in
the Attorney General's suit as president and owner of defendant Guardian Group of
America, Inc., a Galveston business which the Attorney General alleged provided
funding for the operation. Other defendants included Des Moines residents Scott and
Kathleen McGregor, husband and wife who operated the Des Moines phone room.
Head filed bankruptcy in Houston, Texas while the consumer fraud lawsuit was
pending in Iowa.
The Court judgment, issued July 29 by Polk County Judge Don Nickerson, permanently
enjoins the defendants from soliciting consumers to pay money to the defendants in
connection with the marketing, sale, or any other transfer of a timeshare.
Miller said that the Des Moines phone operation shut down after his office, assisted by
the U.S. Postal Service and the Des Moines Police Department, executed a search
warrant at the Des Moines telemarketing boilerroom in April 2002, and then filed the
consumer fraud lawsuit and obtained a temporary injunction. He said that most of the
consumers paid the $400 fees with credit cards and were able to successfully avoid the
charges by challenging them with their card issuers as fraudulent charges.
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