The Grand Palladium Resort in Punta Cana was an elegant respite in March for Leigh Anne Belcher and her daughter until they won a call to prevent a billing issue at the head table.
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 already paid the company in full for the trip.
At the site, Belcher had to locate thousands of dollars to pay for the luxury hotel, which threatened to call the government and also begged 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 industry abdomen: many agencies are offering Ponzi-like systems where a ler’s deposit will pay for tickets and accommodation from a past ler, etc.
It all happened as long as the reserves kept coming.
The pandemic has blurred the already blurred line between business ethics and fraud and has only led to fried nerves, but also official 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 travel interrupted by the coronavirus, one of the highest non-unusual 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 overstating their own costs, failing to actively reimburse providers such as airlines and hotels, or even receiving reimbursements that they have not transferred. common targets of customer anger.
“How is it possible that you paid for a vacation and that the travel agent has 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 some 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 3000 members. With the company’s online page and still dead phone lines, the organization offers 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
BookIt representatives did not respond to requests for comment. In a brief provided to a Florida television station in July, the company’s leading interim monetary director, Ryan Tennyson, said the company had repaid 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 “make money by charging 20% or 30% commissions for those activities and car rental. They save cash by having less service for visitors, which can be a challenge if you get stuck. “in limbo like this. “
“If a catastrophic occasion happens like a global pandemic,” Keyes said, “they are in the most sensible of a stream. “
Experts point out that the practice of storing customer deposits and then preserving them in case a problem arises is the business style of various types of agencies, and of the major airlines.
Earlier this month, the online booking site Expedia sued through travelers whose elegant action accuses the company of not seeking refunds more aggressively and, as a result of customer reaction, airline executives followed federal policy and began issuing refunds of money rather than providing long-term coupons. Trip.
But reduction agents who act as intermediaries, who do not gain advantages from giant companies’ money, play a precarious role: some, such as educational tour operators, pay a down payment for the organization’s reserves and say they have trouble getting the money back. cash themselves.
Charlottesville-based WorldStrides, 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 everything has gone 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 flourished and went through a 10-year era in which calls to large sources and others became greedy,” Gayduk said. customer deposits. “
Gayduk said an industry colleague had amassed Kentucky Derby reports before officials changed course and prevented enthusiasts from taking part in the September 5 race. The tour operator now can’t get back the $300,000 your company spent on price ticket deposits, Gayduk said, leaving you in front of angry consumers who need your 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. Final invoices regularly expire 90 to 120 days before the departure date.
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 cruise ships; despite little evidence, most of them sail 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 ridicule that may not be missed by the truth. “
In a recent presentation to the Securities and Exchange Commission, Carnival executives said that about 45% of their clients had opted for long-term cruise loans with 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 that position.
Sunset cruise refunds: Some cruise consumers have waited months to receive a refund
Once every 10 years, the villagers of Oberammergau, Germany, perform a play depicting the crucifixion of Jesus Christ, part of a centuries-old covenant with God for the city of bubonic plague.
But in 2020, some other 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, Europe and to watch the Oberammergau pastime game.
When COVID-19 forced the currency to prevent until 2022, those travelers, many elderly and constant source of income, implemented for a refund and were surprised 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 was looking to retain $1,150 according to the user or keep their deposits as credits until 2022. Some older people said they weren’t even sure they’d live that long.
NAWAS justified keeping their cash through a technical detail, they said, claiming that they had violated the original terms of their contracts by canceling them themselves. With flights canceled and layovers around the world, those consumers argued that they were highly unlikely to go on vacation as planned, even if they had been willing to give up on performance.
“They said we canceled the trip,” Mary Manning said of Rockaway, New Jersey. “My argument is that the overall total is closed. “
In relatively smart fitness at 69, Manning decided to throw away all the cash for the long haul to watch the hobby play, but says he would have liked 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 the government bureaucracy in Germany and Italy that made it difficult to obtain refunds from foreign suppliers. Ment said NAWAS ended up providing consumers with refunds to those who were “not entitled. “
In total, the company deferred, changed or reimbursed about 16,000 customers, Ment said.
“There are no winners in this area; NAWAS is not a winner for losing his entire year,” he said. “NAWAS did so 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 weren’t getting their cash back and we were very concerned 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 reached an agreement with the Connecticut 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. won his refunds.
EF Educational Tours has partnered with school districts across the country to organize organizational tours. When the virus took over, the company attempted to deny full reimbursement to parents across the country, until attorneys general were involved.
Lona Lamar and her spouse had planned to travel to Spain in June as partners for her son’s elegant journey. 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, said Lamar, who, in his opinion, made no sense for a school trip. The company then agreed to pay a component of its down payment, but sought to stay at $1,000 consistent with the passenger – $3,000 in total in his 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 also noted that consumer disputes were mainly similar to EF Educational Tours. The national division, EF Explore America, introduced other money-back features because those systems were less expensive than overseas travel.
Most 2020 tourist teams have chosen to settle for vouchers that can be redeemed for others until September 30, 2022, Bickelman said.
“The physical condition and protection of our travelers and staff has been our top sensible priority for over 55 years,” he said. “Our main goal in this era has been to provide our consumers with maximum productivity and maximum flexibility of booking and refund 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. As a result of the agreement with the Massachusetts Attorney General, he also recovered nearly $500. She questions the company’s justification for keeping her 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 like that.
It’s exciting for working-class 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 my cash 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, it’s a BookIt business style not to pay for hotels or airlines until the last moment of the start of the trip, even though I paid in full about 4 months in advance,” another Wisconsin visitor complained to the attorney general.
“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 cancun vacation. “for (your) non-public advantage. “
American Airlines spokesperson Andrea Koos demonstrated that the company had issued refunds to BookIt. com, but had arrested 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 court cases opposed to BookIt, which is located in Panama City Beach. The Federal Prosecutor’s Office, the Federal Bureau of Investigation and the local police department, which have dealt with many consumer and supplier court cases, collect instances on an online portal to potentially pursue fraud charges.
“I’m not in business, but I guess when I pay for my vacation, I get paid when I do my shopping,” Lieutenant J. R. said. “Talamantez of the Panama City Police”. We seek to perceive this concept of business and whether it is a fraud. It’s an unhappy and unfortunate situation. “
Massachusetts Attorney General Maura Healey filed a civil lawsuit opposed to BookIt in June, alleging unfair and misleading business practices. BookIt responded to the complaint.
Mikayla Schmidt of Wisconsin and her fiancé Jordan Stiefel have participated in their all-inclusive honeymoon in Punta Cana, Dominican Republic, this month, all planned through BookIt.
They paid the $4,100 in various installments, with the last payment 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, they still lack about $900, Schmidt said.
When the couple married, they spent their honeymoon in California.
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Documents provided through consumers to USA TODAY show that BookIt contacted its spouses’ hotels in March to imply that they would not pay bills to consumers, even when some of them arrived. They then warned consumers that they would end up paying twice and told them to 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,” says a letter from BookIt. com. bank. “
Today, a homepage also asks former consumers to contact credit bureaus for refunds.
Belcher says she has developed a consulting firm to challenge fees with credit agencies, but members of the Facebook organization who booked with debit or budget cards through their credit unions have had more problems.
In his message to WMBB-TV in Panama City Beach, Tennyson, the director of BookIt, said the company continued to operate and added that the remaining 35 staff members, compared to 300, were 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.
Tennyson stated that BookIt “hopes to resume its activities as a full-service travel company once an order appearance returns to the overseas travel industry. “
Mary Claire Molloy and Taylor Killough of USA TODAY contributed to this report.
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.