Travel Scams

February is prime vacation travel time, with many people seeking warmer temperatures in the tropics. So it's probably a good time to remind consumers about the prevalence of travel scams.

In Florida, Attorney General Pam Bondi has announced a settlement that permanently shuts down a travel company operation that she says was deceiving consumers with its sales tactics.

The agreement bars Map Destinations, LLC and its owners, operators, and managers from marketing travel club memberships. The company is based in St. Augustine, Fla.

No legal way to operate

After Bondi obtained a temporary injunction against Map Destinations, LLC, the court appointed a receiver, which determined that there was no way for it to legally operate.

According to Bondi, the company marketed travel club memberships to consumers, and these memberships often cost thousands of dollars. The company promised its customers that their memberships would give them discounted travel and access to expert travel advice.

But Bondi says her office got reports from consumers who said that Map Destinations and its owners overstated the savings and nature of the benefits. They also didn't like the way the memberships were marketed.

“Tourism is vital to Florida’s economy and we will not tolerate anyone using deceptive or unfair trade practices to take advantage of people trying to take a vacation,” Bondi said. “This settlement will help better protect travelers no matter their vacation destination.”

For the next five years, the company and its owners are prohibited from selling travel club memberships in Florida. It also agreed to give up any legal claim to its assets that were seized by the state during the investigation.

Grievances are common

The Federal Trade Commission says it routinely receives many reports about travel scams, most of which make victims believe they have won a free vacation. A telemarketer congratulates the victim on "winning" two tickets on a luxury cruise, but to claim their prize they must first wire several hundred dollars to cover fees and taxes.

When shopping for a vacation, the FTC suggests getting recommendations, calling to verify reservations and arrangements, and obtaining a copy of the cancellation and refund policies.

One final tip -- always pay with a credit card. If a problem arises, you can dispute the charge and usually get your money back.

Summer is normally the season associated with vacation travel, but plenty of snow birds travel in the winter, usually seeking the warmer climate of Florida or the desert southwest.

That keeps lawyers and investigators in Florida Attorney General Pam Bondi's office pretty busy, as they try to protect consumers from shady travel promoters and outright scammers.

In December, Bondi's office took action to shut down three travel companies it said were deceiving consumers. Now, the attorney general has obtained preliminary injunctions against several other travel related companies she accuses of doing the same thing.

“Unscrupulous sales tactics”

The latest complaint filed by Bondi’s Office accuses Reservation Services International of knowingly allowing its two distributors, Map Destinations, LLC and Florida Beaches Destinations Club, LLC, which operated as Suite Journeys and Diamond Vacations International, “to employ unscrupulous sales tactics to induce consumers into purchasing its vacation club memberships.”

Vacation clubs are a common source of travel grievances. Very often they are marketed the same way timeshares are – requiring consumers to sit through long and sometimes intense sales presentations.

Jeanette, of Boca Raton, Fla., says she recently attended a presentation by a travel company called IIG Promotions.

“Like everyone else on here, we too sat through the travel presentation in Florida,” Jeanette wrote in a ConsumerAffairs post. “When we were there it looked like they had solicited people who had just retired through Social Security. They got a list somehow.”

Jeanette says she and her husband were pitched a travel package costing $5,000, but they declined.

Something for free

Consumers are often lured into attending travel club sales presentations by the suggestion that they can get something free, or at a reduced price. It hardly ever works out that way.

Bondi says the companies named in her complaint allegedly exaggerated the true savings, nature, and value of the club memberships. She said some consumers paid several thousands of dollars for these travel club memberships that the companies claimed offered deeply discounted wholesale pricing on hotels, condominiums, cruises, rental cars, and vacation packages.

After making the purchase, consumers reported to Bondi's office that they could have gotten the same or better pricing on other free publicly available travel booking websites.

Bondi says the temporary injunction against Reservation Services International includes the appointment of a monitor to oversee the operations. It also freezes company assets and appoints a receiver against the affiliate companies.

Meanwhile, the Federal Trade Commission (FTC) cautions consumers to get plenty of details about the true status of promoted accommodations and promised benefits and, if you end up making a travel club purchase, always pay with a credit card.  

The state of Illinois is taking a Kansas-based company and two of its Chicago area sales agents to court, charging that they scammed Illinois residents out of at least $80,000 for membership in a bogus travel club that failed to deliver on its promises of vacation destinations across the globe.

Attorney General Lisa Madigan filed the lawsuit in Cook County Circuit Court against Global Connections of Overland Park, Kan., Madmol Inc., based in Crystal Lake, Ill., and GVN Illinois, based in Tinley Park, Ill.

According to the lawsuit, the companies operate a bogus travel club called Global Discovery Vacation Program. Madigan maintains the club scams as much as $8,000 in upfront payments and $398 annual fees from consumers for membership in the program that in reality provides no discounts and -- instead -- charges consumers even more money to book vacations.

Phony checks from phony companies

The Global Discovery Vacation Program is sold through direct mail solicitations and telemarketing calls that claim recipients have won a free prize or free roundtrip airfare. Many consumers reported receiving a fake check or letter made out to them from legitimate-sounding airlines, including “US Airlines” or “American Airways.”

When consumers contacted the company to claim their free prize and airfare, they learned they first had to attend a sales presentation for the Global Discovery Vacation Program. The presentation billed the program as an exclusive club, promising consumers access to hundreds of properties across the country and around the world for a discount.

“This operation has all the makings of a scam,” Madigan said. “Any time you are offered a ‘free’ prize or a supposed award, that’s a red flag. If you receive solicitations like this, your first and only move should be to throw it in the trash.”

The suit alleges consumers who signed up for the travel club had access to few of the promised vacation properties -- if any at all. The few consumers who were able to book a vacation found substandard conditions of the vacation properties, including reports of hotels infested with cockroaches and broken appliances.

The lawsuit seeks to ban the companies from operating in Illinois, provide full restitution to affected consumers and assess penalties based on violations of the Consumer Fraud and Deceptive Business Practices Act.

Travel club memberships can be great when they work. But when they don't, they can be a major source of frustration and monetary distress.

Take Sea to Ski Vacations. It's been ordered to pay $7 million in fines and consumer restitution for violating the Colorado Consumer Protection Act. 

Denver District Court Judge Robert McGahey also prohibited the club's owners from owning, managing, or operating travel-related businesses again because of their deceptive business practices.

“Consumers complained that they were told membership in the travel club would entitle them to deep discounts on condos and cruises,” said Attorney General John Suthers. “Yet, after paying as much as $9,000 for a membership, the Sea to Ski ‘deals’ were no better than what the consumer could purchase on popular internet travel sites."

According to testimony from ex-employee witnesses, Sea to Ski employees regularly used Expedia and Priceline to book travel while pretending to be working with an exclusive provider of travel services. 

Sea to Ski attracted its customers by mailing postcards claiming that the recipient had won two free airline tickets. The “free airline ticket” offers often require substantial up-front fees, and such onerous travel restrictions that consumers are unable to redeem the travel vouchers. American Airlines sued the club for copyright infringement for the unlawful use of their logo.

The Colorado Attorney General warns that similar postcards using the Southwest, United, and Delta logos have also been used to attract consumers to other travel club presentations. Consumers should carefully read any fine print or conditions attached to “free” offers received by mail or email. Anyone who believes they may have been scammed is encouraged to file a complaint by calling the Colorado Consumer Protection Hotline at 800-222-4444.

The owner of Dreamworks Vacation Club has been sentenced to seven years in prison by a New Jersey judge. Daryl Turner, 42, stole millions of dollars from customers of his travel club, Acting New Jersey Attorney General John J. Hoffman charged.

Turner, who pleaded guilty August 7, 2013, admitted that he pitched phony vacation travel membership packages to customers. He executed a consent judgment to pay restitution of approximately $2.6 million to his victims.

Turner’s wife, Robyn Bernstein, 44, who helped run his travel companies, was sentenced to five years of probation. She had also pleaded guilty to theft by deception. Under their plea agreements, Turner and Bernstein agreed to forfeit their home in Marlton and other assets seized in the investigation, including bank accounts, cars and a boat.

“Turner carried out one fraudulent scheme after another, stealing from hundreds of unsuspecting customers who thought he would make traveling more affordable for them,” Hoffman said. “Instead, he ruthlessly stole the money they had set aside for their vacations. This sentence puts Turner safely behind bars, where he can no longer deliver his devious sales pitches, and it requires him to pay full restitution to his victims.”

The state’s investigation revealed that Turner and Bernstein falsely promised large discounts and benefits to those who bought vacation packages, which typically cost between $2,200 and $6,500. They knew that the promised discounts and benefits were not available. In addition, they failed to deliver “free” round-trip airline tickets and cruises after customers paid them hundreds of dollars in “fees and surcharges” to qualify for the “free” promotional trips. They laundered more than $700,000 in criminal proceeds through their personal bank accounts and used the money to buy their luxury home in Marlton, according to testimony and court documents.

Back to his old tricks

“After law enforcement shut down Turner’s shady travel companies, he opened a new one and went back to his old tricks,” said Director Elie Honig of the Division of Criminal Justice. “By sending Turner to prison, we have ended his fraud spree and warned the public that this is not a man you want to trust with your money.”

“We remain committed to getting money back to the consumers who were defrauded, through liquidation of the ill-gotten assets seized from Turner and Bernstein,” said Eric T. Kanefsky, Director of the State Division of Consumer Affairs. “The civil and criminal cases are concluded but we do not consider this matter closed until restitution is in the hands of these consumers.”

The state’s investigation revealed that Turner and Bernstein recruited customers using mass postcard mailings that offered recipients a “complimentary cruise for two” and/or “complimentary airfare for two.”

When recipients called the toll-free number on the card, they were told they must visit one of defendants’ business locations for a 90-minute presentation, which turned out to be a high-pressure sales pitch to purchase vacation packages.