The Grand Palladium hotel in Punta Cana, Dominican Republic, an elegant respite in March for Leigh Anne Belcher and her daughter until they received a call to prevent through the reception for a billing question.
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 an industry abdominal secret: many agencies are offering Ponzi-like systems in which 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 blurred the murky line between business ethics and fraud and only caused them to get nervous, but also formal court cases and trials.
Through public record applications, 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 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. 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
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 “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 the customer’s reaction, airline executives followed federal policy and began issuing refunds instead of providing only 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 an advance for the organization’s bookings and say they have trouble recovering cash. Themselves.
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. keep 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. 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 cruises; despite little evidence, the maximum will come out in the short term.
“Carnival essentially operates a quasi-Ponzi system,” Walker said. It is raising cash for new cruises, which probably would not be made, to eventually refund the rates Carnival owes its consumers in recent months. “
Carnival spokesman Roger Frizzell called the accusation “ridiculous that it might not be something extra from 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 said 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 customers have waited months for refunds
Once every 10 years, the villagers of Oberammergau, Germany, play a piece of pastime that represents the crucifixion of Jesus Christ, a component 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 one guy who has made about a dozen TRIPS with NAWAS over the years. “It’s still a Christian thing to do that to those other people. 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 de oberammergau.
When COVID-19 forced the currency to prevent until 2022, those travelers, many elderly people and a constant source of income, implemented 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 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 would live 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 age 69, Manning chose to throw away all the cash for a long time 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 stated that NAWAS had ended up providing refunds to consumers to which they were “generally entitled. “
In total, the company rescheduled, changed or rescheduled approximately 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.
While coordinating and booking tours charges tour operators money, it does not justify the amount of budget NAWAS was seeking to retain, Connecticut Attorney General William Tong told USA TODAY.
“People were not getting their cash back and we were very concerned that they were not being treated well,” Tong said. “We are talking about a lot of seniors and other people with constant income, 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’s a problem: Consumers had to touch NAWAS before August 20 to get a refund; some, who told USA TODAY that they were not aware of the regulations, missed the deadline; After journalists questioned the state and the company about the situation, he 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, the company attempted 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 their son’s elegant trip. She spent over $ 12,000 on the trip, booked through her 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 he was very predatory of the business, contemplating that it was a pandemic,” he said. “From the point of view of parents, you accept as true with them. It’s really 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 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 cruise ships were stranded at sea. She had paid for her excursion in France through a payment plan, and then 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 and questioned the company’s justification for keeping its money.
The company “kept repeating over and over 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 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 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, BookIt’s business style is not to pay hotels or airlines until the last moment of the start of the trip, even though I paid in full almost 4 months in advance,” a Wisconsin visitor complained to the state 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 vacation in Cancun, Mexico. “(BookIt) never used the cash for the right purpose, however he simply kept it 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 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 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,” 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 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 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.
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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 to collect cash for your stay directly from you at that time, even if you paid in full directly with us,” it reads in a letter from BookIt. com. “To get a refund, you must pay 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 or budget cards through their credit unions had more problems.
In a message to WMBB-TV in Panama City Beach, Tennyson, the director of BookIt, said the company was still functioning and that the remaining 35 staff members, compared to the 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.
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. You can contact Nick npenz@usatoday. com or @npenzenstadler, or Signal at (720) 507-5273. You can contact Josh at jsalman@gatehousemedia. com or Joshsalman, or (941) 361-4967.