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Article Courtesy of The
Sun Sentinel
By Ron
Hurtibise
Published
December 29, 2014
Barbara and Julius Glassman, snowbirds who divide
their time between South Florida and Poughkeepsie, N.Y., were looking
forward to spending time with their grandchildren when they paid $5,000
to join a travel club they knew as Global Paradise Outlet..
It was a decision the couple and 19 others who filed formal complaints
against the company would soon regret but not soon enough to be
allowed to cancel their memberships and get their money back.
The Glassmans and others contend that the travel club's sales
representatives persuaded them to spend thousands of dollars upfront for
access to deep discounts on a wide range of travel products such as
hotels, cruises and airfares, then refused refund requests after the
members complained that the types of discounts they thought they would
get were not actually available.
Officials of the state Department of Agriculture and Consumer Services
say they are investigating whether the club's practices violate state
laws.
They say the state cannot force the company to refund money because
customers signed contracts. But investigators want to know to whether
the company's salespeople falsely claim that "travel club" membership
entitles customers to deep discounts that they cannot get themselves on
the open market. The company's purchase agreements stipulate only that
customers have the right to request condominium rentals along with
unspecified "rights and benefits" of club membership.
The state also is investigating whether the company is properly
registered with the state as a "seller of travel" under all of the names
it has used when entering into contracts with customers.
The company has operated on the third floor of the Beach Place retail
complex in the Fort Lauderdale's beachfront area since 2012 under
multiple names. It is the subject of 23 complaints to the Better
Business Bureau and 20 complaints to the Department of Agriculture and
Consumer Services over three years.
According to complaints:
Five customers said the types of discounts promised by salesmen were not
available when they requested quotes trips through the club's booking
agency. Seven customers said they didn't receive credentials to access
the travel club's website and browse the discount offerings until after
the three-day period to cancel their membership and get their money
back had expired.
Except for condominiums, prices displayed in searches on the club's
website differed little from prices available from online travel
agencies such as orbitz.com or through airlines and hotels that don't
require a membership fee.
Other public records show:
The owner paid an administrative fine for circumventing the state's Do
Not Call list with automated travel marketing calls that respondents
were told were political polls.
Since 2012, the company has operated under seven names at various times:
Global Paradise Outlet, Wholesale Rewards, Top Travel USA, Club
Travellooga, Compass Travel, Paradise Plus and, most recently, Travel
Request.
During a sales presentation in February, one of the club's salesmen told
the Glassmans that a club membership would entitle them to discounts on
Club Med vacations they wanted to buy as a treat for their 27-member
extended family, Barbara Glassman said in an interview.
"We thought the savings on Club Med would pay for the membership,"
Glassman said. But it turned out the travel agency associated with the
travel club couldn't secure a better Club Med price than what the
Glassmans could get on their own, she said.
In its sales presentations, the company promotes its ability to deliver
discounts on a variety of travel products and services, several of the
complaints state. Affixed to the business' front window is a list that
reads: "Condos, Hotels, Cruises, Flights, Car Rentals, and More."
"They say they sell travel," Mrs. Glassman said. "The first thing they
tell you is they're not timeshare sales."
No response from owner
Contacted by telephone in late November and asked to discuss the
complaints about his travel clubs, Richard T. Franken, identified in
state records as the only corporate officer of Travellooga LLC,
contradicted statements that new members were not given access to the
clubs' websites until after their cancellation periods lapsed. Every new
member gets a user name and password to access the site the day after he
or she joins, Franken said.
Yet that statement is contradicted in a letter to the state by one of
Franken's representatives, who wrote that members get their user name
and password within three to five days after joining. And a long list of
"Acknowledgements" that new members are told to initial as part of their
contract includes the statement that they will receive their username
and password within seven days.
In two responses to complaints about delays in getting logon
information, travel club representatives wrote that even if members did
not have access to the website offerings within those first three
business days, they were able to call the club's booking agency, Member
Services Group, to start requesting rates and making reservations.
Franken took the names of customers who filed complaints and said he
would be willing to discuss their cases in an interview with the Sun
Sentinel a few days later. He also agreed to provide names and contact
information of customers who were satisfied with their travel club
memberships.
Reached Nov. 26, Franken directed a reporter to instead speak with his
attorney, Josh Entin.
An email to Entin, sent on Nov. 26, requested that he ask Franken: What
does the travel club offer that's worth $3,000 to $10,000 upfront? How
do members recoup this investment? If he stands behind the quality and
value of the travel club product, why is the cancellation/refund period
so short?
Entin said he would forward the Sun Sentinel's findings and questions to
Franken. In an email Dec. 2, Entin wrote that Franken would be prepared
to respond by Dec. 10. Through Friday, despite two follow-up requests to
Entin, Franken has not forwarded any further response.
Members seek refunds
Of 19 customers who filed complaints after asking to cancel their
memberships and get their money back, refunds have been given in three
cases to date, records show.
The complaints describe a similar pattern of business:
While in the city's beachfront resort area, customers were approached by
field marketers and offered a vacation "gift" for attending a resort
presentation. Later, they said, they found that fees required to redeem
the "gift" rivaled the actual cost of the vacation package if purchased
elsewhere.
Inside, a salesman presented a slide show featuring attractive vacation
resorts and explained that the club is connected to a wholesaler who
buys in bulk and provides deep discounts exclusively to members.
Then the conversations turned to whether the customers have any upcoming
travel plans.
On Dec. 27, 2012, Alan and Judy Feigelson of Commack, N.Y., asked their
salesman how much he could save them and told him the exact cabin, ship
and dates of an upcoming cruise. "We were quoted a savings of more than
$800 per person," they wrote in their complaint to the state.
Jo Knox wrote that on Jan. 23, 2013, she "was given multiple examples of
great deals such as a six-night Ireland vacation, including airfare and
rental car, for $549.00 or an eight-day Carnival Cruise for $245."
On April 10, 2013, Michael Labaton and his wife told their salesman
Randy Bates about an upcoming flight to Italy and a cruise from that
country. Bates said that by joining the club, the Labatons could get the
trip for $2,100 per person.
A few days after the Labatons spent $2,548 to join, the club's booking
agency told them their package would cost $5,894 per person "almost
triple the price represented by Randy Bates," their complaint states.
The Labatons were among the three members who complained to the state
who were given refunds and allowed to cancel their memberships.
In 10 complaints filed with the state, customers described calling the
company and requesting cancellation of their memberships and refunds of
their signup fees. Those requests weren't granted because the requests
were made after the three-day cancellation period. Customers' failure to
cancel within the three-day period was cited by the company in 11 of 18
responses to complaints filed with the state.
A State run by A Crook who employes other crooks and you think they're
going to help you - jajajajajajajajajajaja
Responding to one member's complaint, Franken wrote that the only reason
the woman was not satisfied with the membership "is a mere fact of
'buyer's remorse.' "
Most complaints from seniors
In an interview, Barbara Glassman described her contacts with the travel
club after the couple returned to their Poughkeepsie home last spring.
Glassman said she contacted the club's travel booking service and
requested a price quote on the Club Med trip they discussed with the
sales staff.
They found out the discounts they were told about weren't available, and
the three days they had to cancel their membership was several days
past. Glassman said she made numerous phone calls to the company and
left voice mail messages asking for a refund of their membership fee,
saying the couple felt the club wasn't what was represented.
The Glassmans concluded they'd been scammed. They're embarrassed about
it. "Our children are becoming worried about us," Glassman said. "They
think we're getting senile."
Twelve of the 20 complaints were from people who described themselves as
older or checked a box stating they were over 55.
Lowell and Betty Zoller of Hampton Cove, Ala., who paid $2,995, wrote
that "sales personnel assured us" in a July pitch that the club could
secure reduced prices for their preferred vacations with the Road
Scholar (formerly Elderhostel) program. After the couple joined the
club, "the ladies at the reservation department checked, but found that
we could not benefit on Road Scholar travel and that there were few
assets at locations on our 'bucket list,' " they wrote.
Darlene Shannon of Parma, Ohio, who paid $4,798, wrote, "We have tried
to get the travel deals they showed us during their presentation, and
there are no such deals and the free seven-day cruise they gave us is
not free either." In a later letter, she wrote, "We are an older couple
probably a little backward and naοve and I guess you could add stupid.
We actually believed what they told us and what we saw on their slide
presentation, and it was all a lie."
Jo Knox of Hoover, Ala., wrote, "I can get better deals through my local
travel agency and travel when I want to at prices I can afford. It is
really a ripoff if you do not have much money to spend. I can go on
several cruises for $3,000."
Disclaimers on the travel search site suggest the companies are aware of
complaints that prices for most forms of travel are similar to those
available on the open market.
When a member logs on, they first encounter a pop-up screen essentially
telling them not to believe any of the prices they find listed on the
site.
It states: "Because our 'Member Only' rates are lower than the
supplier's "minimum advertised price," it is necessary for our members
to call for quotes on all package vacations and cruise (sic) to be
assured of our 'Member Only' prices."
But the site also shows Instant Booking prices for weeklong stays at
condos that are as low as a third of the comparative "retail" price
shown in an adjacent column.
For example, a one-bedroom, one-week stay at the Wyndham Palm-Aire in
Pompano Beach starting April 25 is shown at $2117 retail and $719 for
travel club members. An orbitz.com search for the Wyndham Palm-Aire
comes up at $250 a night, for a total of $1945.35 with taxes and fees.
'Is that fraud?'
Paul Pagano, bureau chief for mediation and enforcement at the consumer
services department, said regulators are interested in claims that the
travel clubs' sales staff told customers that they can deliver special
discounts on such products as hotels, cruises and airfares while the
purchase agreement that customers sign promises only "all rights and
benefits" of club membership and the opportunity to "request up to [a
negotiated number of] weeks of condominium accommodations per year."
"I'd be extremely wary if I read that after being told I could save on
hotels, cruises and airfares," Pagano said. Based on the complaints,
"obviously you have people being told one thing and then being sold this
purchase agreement, which is very narrow." Now, he said, investigators
must determine "is that fraud, and if so, can we prove that?"
The investigation also will focus, Pagano said, on whether the business
is registered with the state to sell travel under all of the various
names it has used over the past two years at the retail complex and
whether they are represented legally on the purchase agreements. "The
purchase agreement I'm looking at has Travellooga's registration number
on top of it but names Paradise Plus," Pagano said. "We need to look at
that."
Complaints about travel clubs are becoming more common after peaking
prior to the recession, said Sasha Velez, a senior investigator in the
department's Regulatory Investigations Section.
Timeshare resellers embraced the travel club concept during the early
2000s as a way around restrictions imposed on "vacation certificates" in
the 1990s. In those days, vacation certificates were commonly sold or
given as inducements to attend timeshare presentations, generating
frequent complaints that their values were overstated and came with
hidden fees.
When new laws required disclosure that vacation certificate buyers had
30 days to get refunds, timeshare resellers turned to travel clubs
because, as a product regulated under contract law, sellers don't have
to require even a three-day cancellation period, Pagano said. "Buyers
are obligated when they sign on," Pagano said.
History of legal troubles
Franken has recently been involved in legal disputes relating to travel
and timeshare marketing activities, public records show.
Franken was sued in federal court in 2010 by the online travel booking
site bookit.com and accused of trademark infringement and
cyber-squatting for registering 19 domain names "confusingly similar" to
bookit.com and using those domains to market vacations that require
customers to attend timeshare sales presentations. Franken settled the
suit in June 2011 by agreeing to surrender the domain names and stop
marketing through them.
In a 2013 investigation, the state Department of Agriculture and
Consumer Services documented 71 complaints from South Florida residents
against a telemarketing company Franken operated at the same Beach Place
address called "We the People Speak Inc."
A State run by A Crook who employes other crooks and you think they're
going to help you - jajajajajajajajajajaja
The complaints accused the company of violating the state's "Do Not
Call" list with a campaign of automated travel services marketing calls
that were represented to respondents as political polling. In
negotiating a $7,500 fine, Franken's attorney wrote that Franken sought
legal advice and was told it was OK because political poll takers are
allowed to phone people on the Do Not Call list.
Deliberate delays alleged
Frank Gourley of Charleston, W.V., wrote to the state that he made a
good faith effort to cancel within three business days but still failed
to recover his signup money.
Franken's sales team was marketing as Paradise Plus at a Fairfield Inn
in Charleston, W.V., when Gourley signed up for his membership and paid
$6,594 on Wednesday, July 9. After investigating the company on Thursday
and Friday, the couple decided to cancel on Monday by following the
contract's requirement to deliver their notice in person or by certified
mail before the end of the third business day after joining.
Gourley wrote that he and his wife went back to the hotel and tried to
find members of the sales team. At the front desk, they "called the room
of the person in charge from Paradise Plus," Gourley wrote. "When we
told him what we wanted, he refused to meet with us and told us we could
not cancel the contract." When they pointed out the cancellation clause,
"he hung up the phone on us." Next, the hotel desk clerk offered to call
another Paradise Plus employee "who sent her husband down to meet us."
"We tried to get him to accept the cancellation letter, which he refused
to do, but recommended that we mail in our notice of cancellation the
next day" a day late. "We expressed concern about waiting until then,
but he assured us that it would not be a problem with the company and
indicated that they did accept late cancellations from time to time, not
wanting to get bad publicity," the Gourleys wrote.
They sent the letter via certified mail the following morning, July 15.
In an Oct. 10 response to the state, Franken's attorney, Josh Entin,
stated that the Gourleys did not mail their cancellation notice before
the deadline. In the Nov. 26 interview with the Sun Sentinel, Entin said
"my client completely disputes" that the Gourleys met with any company
representative at the hotel or that "any representative with the company
said they could cancel after the three days."
"The three-day cancellation period is in the contract they signed,"
Entin said.
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