The Grand Palladium complex in Punta Cana, Dominican Republic, an elegant respite in March for Leigh Anne Belcher and her daughter until they won a call to prevent at the main table for a billing problem.
His travel company, flooded with coronavirus cancellations, had closed its doors and disconnected its telephone lines, and refused to pay the hotel for the room even though Belcher had paid the company in full for the trip.
On the spot, Belcher had to locate thousands of dollars to pay for the luxury hotel, which threatened to call the government and pleaded with attendees to make sure no one escaped without paying. When she and her daughter tried to get to Lexington, Kentucky, they had to pay more money; their flight had been cancelled and the airline allowed them to replace it, as it had also been booked through BookIt. com Florida.
The coronavirus has revealed a secret part of the industry: many agencies are offering Ponzi-like systems in which a ler’s deposit will pay for tickets and accommodation for a previous ler, etc.
It all happened as long as the reserves kept coming.
The pandemic blurred the murky line between business ethics and fraud and only led to fried nerves, but also to formal court cases and lawsuits.
Through requests for public documents, USA TODAY received court cases from clients similar to COVID-19 filed with attorneys general and other agencies in 20 states. The documents come with more than 5,300 travelers, from New Jersey to Texas and Washington State, who have struggled to get a refund for coronavirus-interrupted travel, among the most common court cases filed.
More than 24,000 more people complained to the Federal Trade Commission about travel-related scams, reporting more than $43. 5 million in losses, above any other category of coronavirus fraud court cases filed with the FTC.
Some court cases accuse agencies of exaggerating their own costs, of not active refunds from suppliers such as airlines and hotels, or even of receiving refunds that they have not transferred. BookIt and two educational tour operators, NAWAS and EF Tours, were among the top common goals of customer anger.
“How can you imagine that I paid for a vacation and that the travel agent just made the decision not to pay for the hotel?How was that my problem?” I think I went through all stages of grief in about an hour, it was only when we arrived in Santo Domingo that I felt I could just breathe and then the anger began.
Belcher channeled part of that anger to run a Facebook organization, Scammed through BookIt, so that others would receive a refund from the company, which now has nearly 3,000 members. Although the company’s online page and phone lines are still dead, the organization includes recommendations on how to get credit card companies to cover rates.
More refunds: I was given a refund from the airline in the middle of the pandemic; here’s how to get one if you’re eligible
Representatives for BookIt did not respond to requests for comment. In a brief provided to a Florida television station in July, the company’s acting chief financial officer, Ryan Tennyson, said the company had reimbursed 70% of its customers.
Travel agents, online or traditional, combine flights, accommodation and transportation and earn cash through combined commissions or discounts, or both.
Customer deposits are intended to be sent to vendors, hotels and tour operators to retain bookings. Increasingly, experts say corporations have lengthened the time between receiving and releasing those funds. The practice may be buried under the detailed situations of deposit agreements. legislation offers few resources.
Scott Keyes, who runs Scott’s cheap flights website, said online agencies “earn their money by charging 20 or 30% commissions for those activities and car rental. They save money by having less service to the visitor, which can be a challenge if you get stuck in a limbo like that. “
“If a catastrophic occasion happens like a global pandemic,” Keyes said, “they are in the most sensible of a stream. “
Experts noted that the practice of storing customer deposits and then conserving them in case of problems is the business style of various types of agencies and, for the most part, airlines.
This month, the online booking site Expedia was sued through ers whose elegant action accuses the company of not seeking refunds more aggressively. After negative customer reactions, airline executives followed federal policy and began issuing refunds instead of providing coupons.
Discount agents acting as intermediaries, who do not gain advantages from giant companies’ money, play a precarious role. Some, such as educational tour operators, pay a prepayment for the organization’s bookings and say they have a hard time collecting the money on their own.
WorldStrides, founded in Charlottesville, Virginia, which presented educational and organization visits, hosted Chapter 11 in July. The student company said it was negotiating with lenders to reduce debt through more than $750 million.
“These agencies were operating on the brink of solvency,” said John Breyault of the National Consumer League, a nonprofit advocacy group. “Suddenly, when it all went to hell, everyone is going back to those intermediaries, and they don’t have the cash to cover the refunds. “
Jeff Gayduk, editor of Leisure Group Travel magazine, said intermediaries and tour operators are at the mercy of final suppliers (airlines, hotels, etc. ) when it comes to issuing refunds.
“The industry is booming and had a 10-year era in which a large supply was requested and others became greedy,” Gayduk said. “Now, all of a sudden, a lever got stuck in the guide wheel and everyone was wrong to retain customers’ deposits. “
Gayduk said an industry colleague had excited Kentucky Derby reports before officials changed course and prevented enthusiasts from competing in the September 5 race for customers who need their money.
Cruise lines have another business model, generally promoting trips up to 18 months in advance, with benefits such as loose beverage and web packages for those who reduce advance deposits.
This money is helping to keep past cruises afloat financially. In the pandemic, shipping attorney Jim Walker said corporations continued to sell cruise ships to fund refunds for other recently cancelled cruises; despite little evidence, the maximum will come out in the short term.
“Carnival essentially operates a quasi-Ponzi system,” Walker said. It’s raising cash for new cruises, which probably won’t happen, to eventually refund the rates Carnival owes its consumers in recent months. “
Carnival spokesman Roger Frizzell called the accusation “a ridiculous thing that may not be extra to the truth. “
In a presentation to the Securities and Exchange Commission, Carnival executives said that about 45% of their clients had opted for cruise loans or money repayments. At the end of August, the company reported that it had more than $2. 4 billion in visitor deposits.
“We have an incredibly unwavering visitor base,” Frizzell said, “who is eagerly able to leave with our brands once in one position. “
Sunset cruise refunds: Some cruise consumers have waited months to receive a refund
Once every 10 years, the villagers of Oberammergau, Germany, play a piece of pastime depicting the crucifixion of Jesus Christ, which is part of a centuries-old covenant with God for the city of bubonic plague.
In 2020, another pandemic forced production to be postponed, and thousands of devotees from Wisconsin to Florida lost thousands of dollars. NAWAS, the company that partners with its churches, will not hand over all its money.
Many clients were disappointed that trusted leaders in their churches and schools had recruited them to travel.
“They intend to be a Christian organization,” said a guy who has made nearly a dozen TRIPS with NAWAS over the years. “It’s still a Christian thing to do that to those other people. Most of those other people have been collecting their cash for years for those trips.
More than 400 consumers have complained about NAWAS to the Connecticut Attorney General, where the Christian tour operator is based. The company works in churches to recruit clients for pilgrimages to the Holy Land and Europe and to watch the game Passion of Oberammergau.
When COVID-19 forced the currency to prevent until 2022, those travelers – many seniors and a constant source of income – implemented a refund and were shocked when the company refused in the first place.
USA TODAY interviewed several of those who filed formal complaints, who agreed to speak only if they can remain anonymous because an agreement had been reached with the company and had signed confidentiality agreements.
Customers told USA TODAY that they had spent up to $10,000 on cancelled trips and that NAWAS sought to retain $1,150 according to the user or keep their deposits as credits until 2022. Some seniors said they weren’t even sure they lived that long.
NAWAS justified keeping their cash through a technical detail, they said, claiming they had violated the original terms of their contracts by canceling them themselves. Customers argued that cancelled flights and stopovers around the world made it more unlikely to spend the holidays as planned. even if they were willing to give up performance.
“They said we canceled the trip,” Mary Manning said of Rockaway, New Jersey. “My argument is that the overall total is closed. “
Relatively healthy at 69, Manning chose to throw away all the cash for the long haul to watch the Passion game, but said he would prefer a full refund of his $ 4,000 deposits.
Jeff Ment, a lawyer representing NAWAS, said that unlike cruise ships or airlines, the tour operator can get a full refund because additional corporations in the chain of origin had already been paid for. NAWAS, he said, had no money on hand.
He cited government bureaucracy in Germany and Italy, which has made it difficult to obtain refunds from foreign suppliers. Ment claimed that NAWAS had ended up providing refunds to consumers to which they were “generally entitled. “
In total, the company has rescheduled, changed or reimbursed some 16,000 customers, Ment said.
“There are no winners in this area; NAWAS is not a winner for losing all year round,” he said. “NAWAS did it in incredibly difficult circumstances. “
Although coordinating and booking trips charges money to tour operators, it does not justify the amount of budget NAWAS sought to retain, Connecticut Attorney General William Tong told USA TODAY.
“People didn’t get their cash back and we were very worried that they weren’t being treated well,” Tong said. “We’re talking about a lot of seniors and others with constant incomes, and that’s a big expense for them. .
The company entered into an agreement with the Attorney General to reimburse all $500 as agreed, a negotiated amount based on an investigation of customer deposits and business costs.
There is one problem: consumers had to play NAWAS before August 20 to get a refund; some, who told USA TODAY that they were not aware of the regulations, did not meet the deadline; after journalists questioned the state and the company about the situation, it won its refunds.
EF Educational Tours has partnered with school districts across the country to organize organizational trips. When it took over the virus, the company tried to deny parents full reimbursement, until attorneys general were involved.
Lona Lamar and her spouse had planned to travel to Spain in June as partners for her son’s school trip. He spent more than $12,000 on the trip, booked through his son’s best school in Missouri.
At first, the company presented a coupon for a long-term trip, lamar said it didn’t make sense for a school trip. The company then agreed to pay a component of its down payment, but sought to stay constant at around $1,000. with passenger – $3,000 in total in your case.
Lamar filed a complaint with the Missouri attorney general in April. Because the firm was founded in Cambridge, the Massachusetts attorney general negotiated an agreement in May that guaranteed more than $1. 4 million in partial repayments for nearly 4,200 consumers in the state.
EF Tours agreed to implement these policies for all customers, adding Lamar. The company kept $565 in line with those according to the rules. This still leaves Lamar’s trio over $1,500 for a price they never made.
“I think it was very predatory for the company, to look at it as a pandemic,” he said. “From the point of view of the parents, you accept as true with them. In fact, it’s disappointing. “
The company’s spokesman, Adam Bickelman, said policies were becoming as the scope of the pandemic was clarified and referred to staff overheads and supplier prices globally to explain why the company is simply not offering full money refunds.
Bickelman noted that visitor disputes mainly involved EF Educational Tours. The national division, EF Explore America, introduced other money-back features because those systems charge less than excursions.
Most 2020 tourist teams have chosen to settle for vouchers that can be redeemed for others until September 30, 2022, Bickelman said.
“The fitness and protection of our travelers and staff has been our top sensible priority for over 55 years,” he said. “Our primary goal in this era has been to provide our consumers with maximum productivity and flexibility of refund reservation and replacement options. “
When Carol Petrini contacted EF Tours last March to explore her options, everyone was canceled, countries banned visitors, and cruises were stranded at sea. She had paid for her excursion in France through a payment plan, and then up to $ 3,000 in total.
The company sought to withhold $1,000 for the cancellation, Petrini said. After the agreement with the Massachusetts Attorney General, he recovered nearly $500. Question the company’s justification for keeping its money.
The company “repeated time and time again that it had already spent cash on those trips,” Petrini said, “but there was no evidence that there were airline or hotel reservations or anything.
It’s exciting for manual travelers who can slowly finance their dream vacation through a “late payment” system. His anguish and anger are palpable in the Facebook organization presented through Leigh Anne Belcher and in official customer complaints.
“I feel so stupid even when I book with them. I don’t care about canceling myArray, I just need a refund,” a Facebook member wrote about his months war with his bank, USAA, to pay his $3,000 canceled. Montego Bay, Jamaica.
“As far as I understand it, BookIt’s business style is not to pay for hotels or airlines until the last moment of the start of the trip, even though I paid nearly 4 full months until the advance,” a Wisconsin consumer complained to the state attorney. General. Array
“American Airlines says I deserve to talk to the company I booked with, not American,” Douglas Callies wrote to Wisconsin attorney general about his canceled vacation in Cancun, Mexico. “(BookIt) never used the cash for the right purpose, however it was simply kept in his pocket for (his) non-public advantage. “
American Airlines spokesperson Andrea Koos demonstrated that the company had issued refunds to BookIt. com, but had interrupted them once it had earned an account from a billing compensation space indicating that the company had closed.
Florida attorney general said more than 800 people had filed a complaint against BookIt, which is located in Panama City Beach. The Federal Prosecutor’s Office, the Federal Bureau of Investigation and the Police Department, which have dealt with many consumer and supplier court cases. , collect instances from an online portal to pursue potential fraud charges.
“I’m not in business, but I guess when I pay for my vacation, I get paid when I do my shopping,” said Lt. J. R. “Talamantez of the Panama City Police”. We are looking to perceive this business concept and if it is a fraud. It is an unhappy and unfortunate situation. “
Massachusetts Attorney General Maura Healey filed a civil lawsuit against BookIt in June, alleging unfair and misleading business practices. BookIt responded to the complaint.
Mikayla Schmidt of Wisconsin and her fiancé Jordan Stiefel have been on their honeymoon in Punta Cana, Dominican Republic, this month, all planned through BookIt.
They paid the $4,100 in various installments and their last payment expired in March. Their first clue came when they saw that the last payment had not been debited from their bank account.
“They gave it to us on a pay schedule and
Schmidt and her fiancé joined Belcher’s Facebook organization and filed court cases with public agencies. They disputed past bills with their bank, with about $900 missing, Schmidt said.
When the couple married, they spent their honeymoon in California.
”The tip of the iceberg” : Visitors to Airbnb and VRBO fight for refunds after coronavirus cancellations
Documents provided through consumers to USA TODAY show that BookIt contacted their spouses’ hotels in March to tell them that they would not make bills for consumers, even when some of them arrived. He then warned consumers that they would end up paying twice and told them to do so. fight with their credit card companies.
“The hotel may ask you for cash for your stay directly from you at that time, as you have paid in full directly with us,” read in a letter from BookIt. com. “To get a refund, you have to paint directly with your bank. “
A home page asks consumers to contact credit bureaus for refunds.
Belcher said he had developed a consulting firm to challenge fees with credit bureaus, but members of the Facebook organization who booked with debit cards or a budget through their credit unions had more problems.
In an interview with WMBB-TV in Panama City Beach, Tennyson, the director of BookIt, said the company continues to function and that its remaining 35 employees, compared to the 300, are running to reimburse customers.
Federal records show that the company obtained a loan of $1 million to $2 million for the payroll coverage program through the Small Business Administration, claiming to have stored 168 jobs.
According to Tennyson’s statement, BookIt “expects to resume its full-service business once something resemble of an order returns to the foreign industry. “
Contribution: Mary Claire Molloy and Taylor Killough
Nick Penzenstadler and Josh Salman are news experts for the USA TODAY research team. Nick can be contacted npenz@usatoday. com or @npenzenstadler, or Signal at (720) 507-5273. Josh can be contacted at jsalman@gatehousemedia. com or Joshsalman, or (941) 361-4967.