The North Dakota Attorney General’s office has filed a civil suit against Spa D’Athena.
The Consumer Protection Division is asking the court to order the Bismarck spa, which closed in October, to repay customers for unused gift cards.
In court documents filed Jan. 31, Consumer Protection said it has received complaints from 1,340 consumers for a total of about $176,000 and those numbers continue to increase daily. Parrell Grossman of the Consumer Protection Division said amounts owed to consumers range anywhere from $50 to $750, with the majority being around $100.
The spa operators, Jill Becker and Brent Voorhees, did not respond to a message left by the Tribune on the business’ Facebook page and business phones went unanswered.
According to the spa’s records, there could be as much as $517,281 in unredeemed gift cards.
Grossman warns that, while his office would like to get refunds for all customers should the judge rule in favor of the state, that does not guarantee that the money will be available or retrievable from the spa operators. His office will let the public know should funds become available.
The defendants told Consumer Protection the money for the gift cards was spent on business expenses and they do not to have the funds to return to customers. Grossman said the owners were offered an opportunity to settle the complaint out of court and declined.
In the court filing, Consumer Protection alleges Spa d’Athena and its operators committed consumer fraud by failing to disclose financial difficulties likely to interfere with gift card redemption. The spa closed Oct. 27 but kept selling cards through Oct. 13.
The spa has been having financial difficulties since 2013, according to court documents. Employees were unable to order supplies; advertising, rent, electricity, telephone and internet bills went unpaid; the business owed back taxes; and attempts to sell the business failed.
Court documents also said the spa did not employ a sufficient number of masseuses, and massages were being scheduled two to three months in advance.
The spa initially claimed to be closing temporarily to remodel, and a sign on the door said gift cards would be honored. Later, refund instructions were posted on the spa’s website.
But Consumer Protection indicated it does not appear the operators intended to remodel or reopen and had no intention to honor gift cards. They did not seek landlord permission for a remodel, no architect or contractor was hired and no financing was secured.
A message between Voorhees and Becker suggested they apply for building permits to make it appear they intended to renovate but, in reality, they planned to relocate or remain in Hawaii to operate another business.
No refunds have been issued to those that followed the online instructions posted on the spa’s website.
In addition to seeking refunds for consumers, Consumer Protection could seek attorney fees and civil penalties of up to $5,000 per violation.