“I am pleased to inform you that you have qualified for an award of (2) round-trip airline tickets … valid for travel anywhere within the continental United States. In addition, you will receive two nights at any one of over 1,000 Marriott Hotel locations. The retail value of this award is up to $1,398.00.”
That letter — the kind that has landed in many people’s mailboxes — would end up taking me on a fascinating journey, if only because I was curious: What would it take to get this “free” excursion? What are they selling? More importantly, how do companies get away with these sorts of fabulous come-ons?
The so-called award turned out to be a lure to attend a presentation for a travel club — one I declined to join for an upfront fee of $6,990. I didn’t take the promised trip, either, eventually aborting my efforts to redeem it after being discouraged by an exhaustive series of hoops and hurdles, and growing wary of losing a “refundable” deposit along with unspecified fees, taxes and other charges.
But just going through the motions — buffeted by an onslaught of half-truths, omissions and evasive answers — delivered an education about an industry that has had numerous run-ins with consumers and law enforcement nationwide.
Regulators and other authorities said my experience raised many of the red flags that can be the hallmarks of shady operators, including pressure to act quickly; sales pitches conducted in temporary locations; a requirement to pay upfront without knowing what you are getting; and fabulous “freebies” used as bait but that end up being so difficult, or costly, to cash in that people give up.
A 2013 investigative report by the Better Business Bureau in Dallas said consumers who join vacation clubs “are often dismayed that the deals they were promised during the presentation were highly inflated, and the deals that they can receive through their new membership aren’t significantly better than the deals that they can find online using many popular and free travel deal websites.”
As for those travel awards typically used to hook prospects, the BBB report said, “The tickets won’t be free, there are many restrictions, and you’ll have to work the system just right if you ever want to receive them.”
My experience began with a phone call to collect the promised $1,400 trip.
A woman named Deanna asked for the offer code on my letter and said an award was being held in my name for two round-trip airfares and two nights “at any Marriott hotel” in the continental U.S.
To claim it, I would have to visit Preferred Travel in Uniontown, “a local travel company that offers huge discounts.”
“When you come by to pick up your tickets, they will tell you about the company,” she said.
The location was actually a Holiday Inn, where my husband and I and one other couple were greeted by our travel club presenter, Dave, who told us Preferred Travel Network was the exclusive distributor for a company called SaveOnResorts.com
“You would be members in SaveOnResorts.com, a full-service travel agency in Carlsbad, Calif.,” with more than 270,000 members, he said. “That gives us a lot of clout in the travel industry. They give us great prices because of the volume of business we do.”
Dave said we could expect hotel rates worldwide that were 30 to 75 percent off the lowest prices on the Internet with no blackout dates.
Then we were treated to a slide show highlighting some stunning deals.
The pitch said the Orlando Renaissance priced at $398 per night on Hotels.com was available to club members for just $130.76 a night. A round-trip vacation from Pittsburgh to paradise in an over-water bungalow in Tahiti for eight nights costing $3,600 per person on the Internet would cost club members only $2,088. A 15-night cruise to the Panama Canal would set us back by $2,449 per person if booked through Travelocity vs. the member rate of $1,299.
Dave told us SaveOnResorts.com could offer fabulous discounts because there were no markups. “We operate like Costco,” he explained. “They make money on dues of $55 a year, not by selling their merchandise. That’s how we operate.”
Dave offered two types of membership plans. Signing up that day for $6,990, plus $199 in annual dues, would buy a lifetime membership that included virtually unlimited yearly access to steep discounts on travel. We also could join later for the same price, but we would only receive a 10-year membership and be limited to booking one condo week, one bonus week and “one hotel stay” per year.
“What happens if the company were to go out of business?” I asked.
“That’s not likely,” Dave assured us. “But if it came to that, someone would buy us out for our 270,000 members. Because you would still be a member, they would have to honor your contract.”
My husband asked to log into the site so he could see some of the discounts. “I’d like to compare a trip we have booked with what you can do,” he said.
“You have to be a member to see the prices,” Dave replied. A moment later, he seemed to reconsider, telling us we normally would be allowed to do a test drive but “unfortunately” the person who would help us was unavailable.
Later, Cindy Liebes, an attorney who prosecutes consumer fraud for the Federal Trade Commission, told me she suspected Dave had good reason to ask us to plunk down our money before seeing the actual deals.
“He shows you these great resorts, and there’s no way for you to determine if you could get that deal,” she said. “How do you know you can book that hotel in Bali or Tahiti that you want? What is the availability? Are they in old time-shares that aren’t updated? Often people end up in locations that are so poor they have to move to somewhere else [for the rest of their vacation],” she said.
Ms. Liebes also noted that operators can cherry-pick high prices from the Internet to make member rates look better in comparison. She said Dave’s comparison with Costco made her laugh. “But for some people, it makes sense, and that’s the problem,” she said.
Preferred Travel Network, which Internet listings indicate was founded last year in Williston, Fla., did not return telephone calls or an email seeking comment. Saveonresorts.com could not be reached by phone and did not respond to an email.
“In theory, a travel club could work,” Ms. Liebes said. But like the timeshare business, problems with availability, the condition of properties, hidden fees and exaggerated claims make for an industry riddled with unsatisfied customers.
“The pressure to sign up or miss out is a signal to walk away,” she said.
The FTC has shut down some vacation club operators for making false claims, Ms. Liebes said, such as “telling consumers they can travel worldwide whenever and wherever they choose.” When deciding to take action, the agency considers such factors as the size of the operation, number of complaints and “how egregious the misrepresentations are,” she said.
SaveOnResorts.com has responded online to numerous consumer complaints lodged with the San Diego Better Business Bureau — an organization that gives the company an A rating — contending on the bureau’s website that disgruntled customers were directing their anger at the wrong company.
It described itself as a technology company. “SaveOn does not operate any vacation club,” the company said flatly in one response.
SaveOnResorts.com “is contracted by vacation clubs and loyalty programs to provide technology,” it wrote in another response. “We are not sure why or how our name would have come up on any marketing materials. We also do not own, buy, sell or distribute timeshare properties, we specialize in technology.”
The complaints also identified various SaveOn “clients” with names such as Vacation Now for Less, Signature Escapes, Destinations World Wide and Synergy Vacation Club.
On its website, SaveOnResorts.com sounds more like a vacation supplier: “We have contracted with hundreds of companies offering everything from travel to gift cards, picnic tables to concert and sporting events that can be purchased through a Web-based platform or phone support.”
According to the Dallas BBB report, in a typical travel club “scheme” businesses purposely operate within a “complex network of legal entities.”
“Consumers with a problem can quickly find that the handling of their complaint will turn into a series of the blame game,” the report said, with marketers, schedulers, distributors, administrators and gift fulfillment companies all pointing at each other.
At the Holiday Inn in Uniontown, after making clear that we would never buy into a travel club, my husband and I were escorted to the check-in table to claim our award. Instead of receiving airline tickets, I was handed a “redemption certificate” to fill out and mail in for a “travel certificate.”
A few weeks later a brochure from Millennium Travel and Promotions arrived, outlining the terms and conditions of my award. There were lots of them.
First, I needed to send by certified mail a $50 per person “refundable” deposit via money order or cashier’s check, along with a travel request form identifying three locations where I wanted to fly.
After receiving that request, which had to be postmarked within 21 days, Millennium would send a reservation request form, on which I would choose three travel dates — at least 45 days apart — to be mailed back at least 90 days before the earliest chosen date. I couldn’t travel on nine major holidays — or seven days before or after them — including Presidents’ Day and Columbus Day.
Arrivals had to be on a Monday or Tuesday. Departure times were at Millennium’s discretion. I was responsible for unspecified taxes, fees, gratuities and surcharges.
Besides plane tickets, I would receive a room for two adults for two nights — not at “any Marriott hotel” as stated earlier on the phone — but at Marriott’s budget-priced chains, Fairfield Inn, Towne Place Suites “or equivalent.”
I wouldn’t know where or when I was going or receive my tickets until two weeks before departure. Millennium would try to give me my first choice of destinations, but may have to award “an alternative option.”
I had one year from the date that an unspecified “certificate” arrived to complete my trip. After completion, I could request a refund of my deposit. The brochure didn’t explain how.
If I didn’t follow the directions exactly, my award would be canceled.
And Millennium “reserves the right to change the terms of participation without notice.”
Authorities step in
Millennium Travel, based in New Smyrna Beach, Fla., was part of a travel club operation sued last May by the North Carolina attorney general alleging unfair and deceptive business practices.
Under a settlement reached in October, the company agreed to pay a $10,000 fine and refund deposits to about 200 consumers. It was barred from the travel business in North Carolina for 10 years. Millennium denied any wrongdoing. The case against three other parties named in the vacation club lawsuit is pending.
“We tend to caution people about travel clubs in general,” said Noelle Talley, a spokeswoman for the North Carolina Department of Justice in Raleigh. “Most of the complaints we get is that it never lives up to the promises.”
In the case against Millennium, people complained that they put down deposits but were unable to arrange a trip, she said. “When they tried, there were so many strings attached, they couldn’t take the trip. We felt like it was designed so people really couldn’t redeem it.”
Some 200 complaints against Millennium are listed online with the BBB in central Florida, which gives the company an F rating. Complaints range from not being able to get deposits back or book a trip, to being charged taxes, fees (including courier and processing fees) and surcharges amounting to hundreds of dollars.
Phone calls for this story to Millennium Travel were not returned.
Two months after the Uniontown presentation, I received a call at home from a woman who said she was from quality assurance following up on my recent attendance at a travel club presentation.
“Did you sign up?” she asked me.
When I said no, she said she had great news. “You were automatically enrolled to get a vacation club for free. Congratulations!” she said. “You only have to pay a $298 annual fee, plus a one-time activation fee of $198.”
“So you picked my name out of a hat for this offer?” I asked.
“Yes, ma’am. You were selected for the award. Congratulations,” she said. “Can I transfer you to the billing and verification department?”
Asked what company she was working for, she said she would double check. Then a man named Brian took over. He said he was quality assurance manager with “Global Solutions,” the “fulfillment company” that would create my membership account.
When I said I had been told two months earlier that I would be joining SaveOnResorts.com, he said there must have been some confusion. “They sort of misled you,” he said. “We wholesale the memberships to them, and they mark it up.”
I said I wasn’t interested in the “free” membership. Brian persisted.
“We only do this once a month,” he said. “We only let 12 of these go at this price. I’d hate for you to miss it.”
For the report, “Travel Club Schemes: Inside the Promotion Commotion,” produced by the Better Business Bureau in Dallas, go to http://dallas.bbb.org. To read Millennium Travel’s settlement with North Carolina, visit www.bbb.org/central-florida.
Patricia Sabatini: email@example.com or 412-263-3066