The Federal Trade Commission has filed two court actions against five companies and their owners for allegedly tricking consumers into paying fees for vacation packages they supposedly won in contests, and then failing to provide the promised vacations.
At the FTC’s request, the court halted the defendants’ allegedly deceptive practices and froze their assets pending further litigation.
VGC Corporation of America
In the first case, the FTC charged that the defendants used Spanish-language radio and TV ads nationwide to offer a vacation package they claimed was worth thousands of dollars as a prize to callers who answered a simple trivia question.
For instance, the defendants ran television ads proclaiming “Attention! This program has been interrupted. It’s time to win for the first thirty people that dial the number that appears on the screen and can tell me correctly how that famous Mexican comedian (Mario Moreno) was also known ... If you know the answer ... you are going to go to Disneyland ...”
Callers were told they had won a prize, and that if they paid a fee of up to $400 they would receive their promised vacation package.
However, according to the complaint, when the “winners” tried to redeem their prize, they were almost uniformly denied. Many consumers who called the defendants to book their vacations were told they were not eligible because they did not meet previously undisclosed conditions, limitations, and restrictions, including age, income or marital-status requirements, or required attendance at a timeshare presentation.
Others were told the promised vacations were no longer available or that they had to pay more to redeem their prize. Some consumers could not reach the defendants to claim their prize, and those who did reach them and asked for their money back were told there were no refunds and they were simply out of luck.
The FTC charged the defendants with violating the FTC Act. The State of Florida charged them with violating the Florida Deceptive and Unfair Trade Practices Act.
The defendants in this case are VGC Corporation of America, also doing business as All Dream(s) Vacations, All Dreams Travel, Five Star(s) Vacations, 5 Star(s) Vacations, Total Tours, and Travel & Tours Corp.; All Dream Vacations Corp., also doing business as All Dreams Vacations; and several individuals.
Holiday Vacations Marketing Corp.
The defendants in the second case also targeted Spanish-speaking consumers in a similar scam.
According to the FTC’s complaint, when consumers called to accept the “prizes,” the defendants’ telemarketers took their credit or debit card numbers, charged their accounts a fee of up to $400, and mailed them a payment invoice, a vacation brochure, and instructions to call 30 days or more before the desired vacation date to make reservations.
The defendants sometimes mailed terms and conditions stating that consumers had to make reservations within 18 months of purchase, pay their own air fare, present two forms of ID at the hotel, and be 21 or older.
The complaint also alleges that consumers often could not reach a live operator to schedule vacations, or managed to make reservations but could not reserve as many nights as they were promised. Some consumers learned, after arrival, that they had to attend timeshare presentations and meet income and marital-status requirements to receive free hotel stays.
At least one person, who traveled from Texas to Florida, was charged for the hotel because she could not attend a timeshare presentation scheduled for the day after her departure. Consumers who complained or demanded refunds had trouble reaching anyone by phone, and others were promised a refund that was never provided, according to the complaint.
In addition, the defendants allegedly re-charged consumers’ accounts up to $400 without their authorization, and without disclosing that they would be charged a second time.
When consumers reported the unauthorized charges to their banks or credit card companies as fraudulent, the defendants used certified mail to send those consumers a new invoice and brochure that was nearly identical to those sent after the initial charge. The defendants then sent the consumers’ banks or credit card companies a copy of the consumers’ signatures from the certified mail receipt and a copy of a false invoice. This led some banks and card companies to refuse consumer requests to cancel or reduce charges to their accounts.
The FTC charged Holiday Vacations Marketing Corp., Happy Life Carribbean Corp., Happy Life Corporation of America Inc., and several individuals, with violating the FTC Act.