AG Coakley Sues Discount Travel Companies for Misleading Consumers with Membership Sales
Deceptive Postcards Offered “Free” Airline Tickets, Cruises; AG’s Office Obtains Court Order Prohibiting Violations, Seeks More than $278,000 in Restitution and Civil Penalties
BOSTON – A Pittsfield-based discount travel company and its affiliate have been ordered by a court to stop using alleged deceptive marketing to sell travel memberships, Attorney General Martha Coakley announced today. The AG’s Office sued the companies and its owners for offering memberships to book travel at deeply discounted prices, and misleading consumers into paying several thousands of dollars for promised benefits that were never provided or refunded.
“Vacation or travel scams offer free or discounted deals that often never materialize, and our office alleges these companies stole thousands of dollars from consumers through their deceptive memberships,” AG Coakley said. “While many travel opportunities are genuine, we want to educate the public as much as possible to protect themselves and be wary of deals that sound too good to be true.”
The complaint, filed in Suffolk Superior Court, alleges that Berkshire Concepts, LLC and Netrate Concepts, LLC, together with their affiliate CRW Marketing, Inc. in Yarmouthport, and owners Charles Whiteman of Dennis and Daniel Merritt of Pittsfield, used high pressure sales tactics to offer consumers free travel incentives and extreme discounts on travel, but instead charged consumers thousands of dollars for access to a “proprietary software” database that failed to provide the promised discounts
A preliminary injunction was entered in court Tuesday, prohibiting the defendants from violating the state’s consumer protection laws, including advertising “free” travel which requires consumers to pay taxes and fees, advertising access to nonexistent “wholesale” travel discounts, and holding consumers to a three-day cancellation period when consumers have not yet received access to the companies’ website.
According to the complaint, between February 2011 and April 2013, Berkshire and Netrate sent postcards to residents of several states including Massachusetts, offering a free cruise or free airline tickets in return for attending a presentation about a new concept in travel. Other postcards indicated that the recipients had won free travel, and needed to call a toll-free telephone number to claim their prize. When consumers arrived at the presentation they learned that the free travel actually required the payment of hundreds of dollars in taxes and fees to redeem.
The company claimed that their website and its proprietary software provided consumers with direct access to a database of travel sold at wholesale prices. Consumers were then charged thousands of dollars for access to the website and its deals, but the companies failed to send the log-in information until after the three-day cancellation period, specified in the contracts, had already expired. As a result, consumers were unable to determine whether they were satisfied with their purchases until it was too late for them to cancel.
In one situation, a family from Carlisle paid close to $6,000 for a “Platinum Level” membership through Berkshire Concepts that allegedly included six weeks of accommodations in luxury condominiums throughout the world, plus unlimited cruises and “dream trips,” only to discover that the website referred them to a different search engine that did not offer the deals promised in the initial presentation. Other consumers discovered that the website’s prices were not lower, and in some cases higher, than prices available through free travel websites such as Orbitz or Expedia.
Berkshire and Netrate also offered a “concierge service” to plan more customized travel, but consumers found that the customer service agents did not respond promptly to inquiries and made significant errors in booking the requested travel.
According to the complaint, the defendants collected thousands of dollars from at least 25 consumers in return for travel memberships that were not as advertised. None of the consumers have received refunds from Berkshire Concepts or Netrate Concepts. The AG’s Office is seeking more than $108,000 in restitution to victims and $170,000 in civil penalties.
Before you commit to any travel or vacation deal of this nature, the AG’s Office offers consumers the following information on how to protect yourself against scams:
- Calls or letters saying consumers have won “prizes” or “awards” for a contest that they never entered are almost always ploys.
- Always read the fine print on all “prizes” and “gifts” to determine any costs associated with them. It is the consumer’s responsibility to pay for anything not specifically mentioned.
- Walk away from high pressure sales tactics including “one-day” or “one-time” offers. Reputable companies will never pressure customers to make immediate decisions, and will allow time to consider the terms of an offer.
- Search internet sites for customer feedback, and call the Attorney General’s Office to determine if other consumers have filed complaints.
- Get the details of any offer in writing and review the terms before deciding to sign up or pay a deposit.
- Compare promised rates with travel agents, airlines or available internet-based services. Determine the company that is actually providing the goods or services being promised.
- Get the details behind vague promises that packages include stays at "five-star" resorts or sailing on “luxury” cruise ships.
- Find out all possible unexpected expenses including hotel costs, meals and transportation. What will the company do if hotel and other accommodations are completely booked?
- After determining that a business is reputable, use a credit card to purchase the trip. Credit card companies often provide some protection and can help consumers dispute charges.
This matter is being handled by Assistant Attorney General Kiernan Reed, with assistance from Deputy Chief David Monahan, Assistant Attorney General Jacqueline Rompre, and Paralegal Lois Martin of AG Coakley’s Consumer Protection Division; Amane AbdelJaber, Consumer Mediator; and AG Coakley’s Civil Investigations Division.
If you feel that you have been a victim of a vacation or travel scam, or if you would like more information, please contact the AGO's Public Inquiry and Assistance Center Hotline at (617) 727-8400, or file a consumer complaint.
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