NEWARK, NJ (March 21, 2012) –– Attorney General Jeffrey S. Chiesa and the State Division of Consumer Affairs have filed suit against a vacation travel club and its owner for allegedly defrauding consumers by failing to provide the complimentary cruises and airfares used to induce attendance at sales presentations for vacation travel membership packages (“memberships”) and failing to provide the deep discounts for travel services represented during the presentations.
The five-count Verified Complaint, filed on March 15, 2012, in Bergen County Superior Court, alleges that Global Travel Solutions, LLC, and its owner, Jason A. Krieck, violated the New Jersey Consumer Fraud Act and the Advertising Regulations, among other laws, by committing unconscionable commercial practices and deception, making false promises or misrepresentations, and engaging in the knowing omission of material facts in their advertisement and sale of memberships. The company maintained business addresses in Montvale and Haddonfield, and staged sales presentations at its Montvale location and the Somerset Holiday Inn.
In its Verified Complaint and Order to Show Cause, the State requests that the Court enter temporary restraints, which include prohibiting the defendants’ advertisement and sale of memberships, freeze the defendants’ assets, appoint a receiver, and shut down the company’s website. The Court will decide this request following a hearing scheduled on March 20, 2012.
“We allege the defendants’ deceptive business practices began with postcards the company mailed offering complimentary cruises and roundtrip airfare, and continued right through their sales presentations,” Attorney General Chiesa said. “Rather than getting away on a vacation, these consumers ended up stuck at home, dealing with the loss of their hard-earned money.”
To date, the Division has received complaints from 54 consumers, the majority of whom paid between $995 to $8,500 for the membership, plus a $29.95 monthly fee. After discovering that the memberships did not provide the represented deep discounts and availability of accommodations and other travel services, consumers attempted to cancel their memberships but were unable to do so for varying reasons. Some consumers who contacted the company were told cancellation papers would be mailed to them but no papers were received. Others went to the company’s Montvale location during listed business hours but found the office was closed.
“According to our lawsuit, the defendants lured consumers into purchasing memberships through empty promises of discounted vacation services and free cruises and airfare, all with the purpose of defrauding consumers and enriching themselves,” said Thomas R. Calcagni, Director of the State Division of Consumer Affairs. “We allege that consumers paid significant money for sham memberships that were essentially worthless. In fact, consumers could find lower vacation travel prices through free internet sites.”
The alleged violations of the Consumer Fraud Act include:
- Inducing consumers to attend presentations for memberships by offering a complimentary cruise and airfare that are, in fact, not complimentary;
- Failing to book the complimentary cruise and airfare even after the consumer submitted the requisite paperwork and paid the requisite deposits;
- During sales presentations, inducing consumers to purchase memberships by showing them a PowerPoint slide presentation and/or video with accommodations and pricing that, in fact, were not available through the membership;
- During sales presentations, advising consumers that they will have the immediate ability to book vacations through the Global Travel website, when such is not the case;
- Failing to provide consumers who purchase memberships with the types of accommodations and discounted pricing represented during the sales presentations, individual meetings, and otherwise;
- Offering consumers who purchase memberships the identical or similar pricing for vacations and accommodations that the consumer could obtain through free sources (e.g., hotel or cruise websites and Expedia);
- Offering consumers who purchase memberships pricing for accommodations that was higher than the pricing the consumer could obtain through free sources (e.g., an airline website);
- Representing that a membership was a “lifetime” membership and could be transferred to a consumer’s heirs upon the consumer’s death, when such was not the case;
- Charging consumers’ credit cards for memberships at the same time or before the consumer has been presented with the relevant documents;
- Charging consumers who cancel the agreement a restocking fee of 2.8% of the price of their membership;
- Representing to consumers, on the Global Travel website, that they had the ability to “Choose from over 100,000 Hotels … at the GUARANTEED Lowest Prices!” when such was not the case;
- Representing that the consumer testimonials depicted on the Global Travel website are in fact about Global Travel, when the same testimonials appear on other travel websites; and
- Failing to respond to consumer complaints, inquiries, and/or requests for refunds in a timely manner or at all.
The State ultimately seeks consumer restitution, reimbursement of its investigative costs and attorneys’ fees, and civil penalties.
Deputy Attorneys General Cathleen O’Donnell and Glenn T. Graham in the Consumer Fraud Prosecution Section are representing the State. Investigator Raquel Williams in the Office of Consumer Protection conducted the investigation.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey ) or 973-504-6200.