Judging by recent state actions, travel club fraud is alive and well.
Last month, the Illinois attorney general filed a lawsuit against a Kansas-based company and two of its Chicago area sales agents that the state said scammed Illinois residents out of at least $80,000 for membership in a bogus travel club that failed to deliver on promised vacation destinations worldwide.
Continue Reading Below
The state accused the Global Discovery Vacation Program of charging as much as $8,000 in upfront payments and $398 annual fees. But instead of providing discounts, the state asserted, the club charged consumers even more money to book vacations.
A month earlier, a Denver court ordered Sea to Ski Vacations and its owners to pay more than $7 million in penalties and restitution to consumers. The Colorado attorney general said that despite charging customers as much as $9,000 for deep discounts on condos and cruises, Sea to Ski deals were no better than what consumers 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," said a statement issued by the state.
The same month, the New Jersey attorney general's office announced that it had filed suit against two former Bloomfield-based travel companies and it operators, who it accused of accepting nearly $1 million in payments from 241 customers and then failing to deliver the promised overseas travel arrangements.
"It was only after the customers arrived at hotels in Rome that they learned the defendants had failed to pay for the lodging and other accommodations for which they had prepaid hundreds or thousands of dollars," the state said in announcing the suit against Crown Travel Services Inc., also known as Club ABC Tours, and an affiliated company, ABC Destinations LLC.
And in June, the Wisconsin attorney general's office announced that it had obtained a $4.8 million judgment against Travel Services Inc., based in Litchfield, Ill., and its principals. The order included $3.8 million for consumer restitution.
A jury found that the company, through its Cataways and Phoenix vacation clubs, made untrue, deceptive, or misleading representations regarding the discounts on travel available to club members, the geographic locations of the travel clubs, and the exclusive nature of the benefits available to club members.
What to do
If you’re at all tempted to join a club, ask for a written, detailed explanation of any vaguely worded descriptions, such as “5 star” accommodations, the Federal Trade Commission says. Also ask about trip-cancellation and refund policies. Check the Better Business Bureau for any reports on the club, and search the Web using the company name to find out what customers are saying. Be especially wary of unsolicited promotions that come by mail, e-mail, or fax offering deeply discounted travel packages. Or just forget joining a club and book the vacation yourself using popular travel sites.
Copyright © 2005-2014 Consumers Union of U.S., Inc. No reproduction, in whole or in part, without written permission. Consumer Reports has no relationship with any advertisers on this site.