NEWARK
– 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.
Follow
the Division of Consumer Affairs on Facebook
, and check our online calendar of upcoming
Consumer Outreach
events.
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