INDIANAPOLIS – Indiana Attorney General Greg Zoeller said travel-related scams have heated up and so have state and federal enforcement efforts to crackdown on violators.
In Indiana, lawsuits were filed against Eastern Enterprises, LLC and Simplicity Travel, LLC as part of a joint multistate, multinational law enforcement initiative coordinated by the Federal Trade Commission (FTC.)
Zoeller’s actions coincide with the announcement of 191 actions to stop fraudulent operations offering timeshare property resale services and travel prizes, including three FTC cases, 83 civil actions brought by 28 states, and 25 actions brought by law enforcement agencies in 10 other countries. More than 184 individuals face criminal prosecution by U.S. Attorneys and local law enforcement.
Eastern Enterprises, a South Bend timeshare resell company, claimed to have ready buyers who would pay for consumers’ timeshare properties. According to the complaint, the company entered into 14 contracts with out-of-state consumers and collected an up-front fee of $1,985.
Customers also made additional payments ranging from about $4,800 to $15,500 to allegedly cover certain taxes or to close the sale on the properties. According to the lawsuit, the company did not complete any of the transactions or provide promised refunds. Bank records show the account, where customers’ monies were deposited, was used to make non-business purchases at gas stations, restaurants and even through the Sony Playstation Network.
The lawsuit was filed in St. Joseph County and seeks an injunction, consumer restitution, civil penalties and investigative costs for violations of the Deceptive Consumer Sales Act.
A separate lawsuit was filed against Idaho-based Simplicity Travel after the company dialed or sent mailers to Indiana consumers offering free vacations or savings certificates in exchange for attending a 90-minute sales presentation on vacation club memberships.
Two separate Hendrick’s County consumers attended the seminars and entered into contracts to purchase memberships totaling $8,187. Both customers were unsuccessful in booking any of the advertised vacations, and calls to the company went unanswered and refunds were not provided.
Simplicity Travel recently entered into an agreement, which was filed in Marion County, to pay $32,000 to the Attorney General’s office to provide consumer restitution and investigative costs. The company has also agreed to follow state laws regarding promotions, contracts and cancellation policies, and stop illegal telephone sales calls to Indiana consumers.
Here are five red flags often associated with travel-related scams:
1.Telephone caller offers a “free†vacation, but requires you to pay a fee first or provide your credit card number to verify your information. A legitimate company will not ask you to pay to receive an offer or for your financial information. Hang up before your “free†prize ends up costing you.
2.Promises of a “free vacation†if you attend a travel club presentation. High pressure sales tactics are often used during these events and lead to buyer’s remorse. Expensive travel club memberships are often limited in choice of destination or travel dates. If you feel pressured into making a quick decision, the decision should be to walk away.
3.Automated calls offering discount vacation packages or a free vacation. Robocalls are illegal in Indiana regardless of whether or not you are on the state’s Do Not Call list. If the company is breaking the law to contact you, chances are it’s a scam.
4.The market is “hot†and buyers are waiting to purchase your timeshare. Be skeptical of any offers by resellers to sell your timeshare. Don’t agree to anything over the phone or before you have had a chance to fully vet the company. Get all details in writing. Be skeptical of resellers who require an upfront fee before rendering services or closing on the property.
5.During vacation the resort offers you incentives to purchase a timeshare. Don’t make an expensive impulse decision based on a good value. Make sure you have all promises and representations in writing, as well as a public offering statement and other relevant documents.
Zoeller thanked Deputy Attorney Generals Dennis Mullen, Tammy Summers and Lisa Wolf for their work on the cases.
