Looks like Palm Coast Travel has company. Florida regulators have filed charges against three more travel agencies as part of their expanding probe of unlicensed insurance offered through defunct Prime Travel Protection. (Two more agencies were added to the list at the end of today; see update at the end of this post.)
Ahoy Cruises of Jacksonville, Fla., JB Travel of Boynton Beach, Fla., and St. Lucie West Travel of Port St. Lucie, Fla., are accused by the state’s Department of Financial Services of violating several insurance-related statues — or, put differently, of selling fake travel insurance.
This is an important story, because bogus “trip protection” policies are known to have been sold to people across the country for years, potentially costing travelers millions of dollars in lost vacations.
Here are the orders against Ahoy Cruises (PDF), JB Travel (PDF) and St. Lucie West (PDF).
Like Palm Coast Travel, which does business online as Smartcruiser.com, the agencies have the option of either not disputing the state’s findings, which could result in sanctions and a suspension of their licenses, or of contesting Florida’s findings in and administrative hearing.
Palm Coast Travel is contesting Florida’s allegations. A hearing before an administrative law judge is scheduled for April 8. Here’s the docket.
(Palm Coast Travel is suing me in an apparent attempt to stop me from writing about the company. Perhaps these agencies would care to join the suit?)
The state says Ahoy Cruises sold one of its customers — described as “M.G.” — a cruise with fake insurance in November, 2007.
Subsequent to the purchase, M.G, had to cancel her trip due to medical reasons. A travel insurance claim was filed, which has not been resolved,
Neither Prime Travel Protection, Inc., nor its related entities have ever held a license or Certificate of Authority to transact insurance in Florida.
You, AHOY CRUISES, directly or indirectly acted as agent for or otherwise represented or aided one or more unauthorized insurers, including but not limited to Prime Travel Protection, Inc.
Florida regulators also allege JB Travel, which also does business online as JBcruises.com, sold a customer named S.R. 16 travel packages, which included “travel insurance” for him and his family.
The aforementioned transactions of insurance were handled by one or more travel consultants for JB TRAVEL, who were not licensed as travel insurance agents at the time.
Pedro Oliveira was of the unlicensed travel agents. At the time, Mr. Oliveira was not licensed or
appointed as a (2-41) travel insurance agent.Subsequent to the purchase, the two or more of S.R.’s family had to cancel their trips due to medical reasons. Travel insurance claims were filed, which have not been paid.
Prime Travel Protection, Inc. has never held a license or Certificate of Authority to transact insurance in Florida.
The state contends JB Travel “directly or indirectly” acted as agent for or otherwise represented or aided one or more unauthorized insurers, including but not limited to Prime Travel Protection.
Florida regulators also claim St. Lucie West Travel sold Prime Travel Protection to several customers. In one count, it alleges the agency sold Prime Travel Protection to two individuals, “V.” and “J.B.”
Subsequent to the purchase, V. and J.B. had to cancel their trip due to medical
reasons. A travel insurance claim was filed, which has not been resolved.Neither Prime Travel Protection, Inc., nor its related entities have ever held a license or Certificate of Authority to transact insurance in Florida.
You, ST. LUCIE WEST TRAVEL, directly or indirectly acted as agent for or otherwise represented or aided one or more unauthorized insurers, including but not limited to Prime Travel Protection, Inc.
(A second count, involving “D.” and “MJ.C.” levels similar charges against St. Lucie West.)
These differ from the allegations made against Palm Coast Travel in one important respect: None of them contend a customer purchased a legitimate insurance policy that was swapped out for a fake one. (Florida alleges that at least two Palm Coast customers were sold Access America policies, but that the policies were eventually moved to Prime Travel Protection — an action that, if true, would carry a series of harsher penalties.)
More notices are expected to be filed by Florida regulators, perhaps as soon as this week.
Update (6:30 p.m.): That was fast!. DFS just filed charges against two more agencies — a two-count notice against Four Seasons Tours and Cruises in Largo, Fla. (PDF) and a seven-count notice against Diana’s Travel South of Spring Hill, Fla. (PDF).
What can I say? Maybe a new photo is in order.
Update (7:30): Here’s a straggler, against Sandra Demore of Port Orange, Fla. (PDF). Now it’s a party.
It’s getting crowded in there.
(Photo: Crowdive and volvidejapon/Flickr Creative Commons)
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{ 21 comments… read them below or add one }
Those birds have to be the cutest threesome of underhanded travel agents… Now if we can teach them to talk and “squeal” on their cohorts who screwed people on insurance. You keeping a running record of how many times you are getting sued or investigated? I think you need a write a book about it!
Good journalism usually rubs those you report on the wrong way. I guess it just goes to show you are amply doing your job.
I get it – birds of a feather! AHAHAHA!!!
Christopher, I am enjoying your creative use of graphics for these articles almost as much as the stories themselves. ;-)
Something else I’ve learned: The quickest way for a struggling company to get a journalist to report every excruciating detail of their legal troubles is to SUE that journalist in an attempt to silence him! I hope that Palm Coast has learned this lesson.
Keep reporting, Christopher. Somebody needs to shine a light on these agency’s illegal activities. Otherwise they’ll just keep on doing it.
You are the working-traveler’s hero!
With all due respect, Chris, the State of Florida appears to be netting the minnows, when those of us who have been following this continuing story for six or seven years, know that there are three whales out there who sold illegal insurance products from three or more companies. It appears to me that when the State decides to use the laws that already exist, they’ll make the perpetrators of this gigantic scam repay ALL of the customers who were conned into buying this bogus product, and if their slick Lawyers like Mr. Newman, who represents Lee Smolinski of Palm Coast Travel protest, the State should remind these Lawyers that volume selling of this product is a 3rd degree felony, punishable by jail time.
That might get the attention of the next Travel Agent who receives a solicitation from Jerry Watson, wherever he is.
Right on, Justin. Years ago, one of the reporters at the newspaper where I work was doing a series about the river upon whose banks our city is built, and which is a backbone of our economy. Several industries are located on the river, and one of the stories concerned whether these industries were in compliance with EPA regulations on discharges and toxic waste, etc. In other words: what were they dumping into our water supply?
The news wasn’t good. Several of the industries had been cited by the EPA for violations and when the story hit the paper, they were Not Happy. Mike was reporting the EPA findings, which are public record, but you would have thought he said the industries were kidnapping babies and selling them into slavery or eating them alive. The point is, he reported the truth, and he was upset about their reaction.
In a rare flash of insight, especially for someone in her mid-20s, I told him, “Mike, you can lie about something all day long and no one will care or pay any attention. But once you start telling the truth, everybody starts getting PO’ed and wants to crucify you.” He looked at me a little strangely and answered, “You know, you have a point.”
In the intervening years since I had that lightning bolt, I’ve found it to be accurate over and over again. In general, people don’t scream at us if they think we’re lying–they have a fit if they think we’re printing the truth.
So Chris, this is just proof positive you’re on to the truth. As long as they’re screaming, you’re probably on the right track. Keep it up.
@Chicky – outstanding and insightful post! I couldn’t agree more.
@Harry Baxter – do tell. Who are these whales? And is your point that the State of Florida shouldn’t bother with the minnows? Is it possible they are in the process of building cases against these whales, and they just take longer to get done due to the complexities involved with their bigger cases?
@LeAnne:
The three whales have been identified over and over on these boards, so I’m not betraying any confidences by stating that they are Palm Coast Travel, Best Price Cruises, and Legendary Journeys.
No; I’m not saying that the State shouldn’t go after the minnows. They should. There are quite a few minnows out there, though, and if the State tries to get them all before attacking the whales, the owners of the “Big Three” could die of old age before the state gets to them.
I’m not ready to apologize for the smaller TAs who peddled this junk, but realistically, the little guys have fewer resources and less experience, and could have been somewhat conned by the Jerry Watsons and McKinley Johnsons of the world who got them to sell crap to their customers. I dealt with an agent several years ago who was small enough in cruise sales to operate out of his bedroom, and this isn’t at all unusual. Lee Smolinski, Ron Russo, and Al Ferguson can act naive about selling garbage for several years, but they aren’t fooling anyone.
Have you seen the article that appeared in South Florida’s Sun-Sentinel today?
http://www.sun-sentinel.com/business/fl-travel-insurance-crackdown-0219-20100219,0,3388294.story?page=1
One has to laugh at Jerry Roth of Cruise Superamarket’s comments. He says he didn’t know travel agents needed a license to sell trip coverage and he didn’t check Prime Travel Protection’s credentials because they (Prime Travel Protection) took over another company he was using for years. What Jerry Roth hasn’t told you is the company that Prime took over was also selling unauthorized insurance. Not knowing he didn’t need a license is no excuse. Having a license like Lee Smolinski’s wife of Palm Coast Travel is even a poorer excuse for selling unauthorized insurance.
These travel agents can come up with the slickest excuses and the most slippery defenses, but the state – this time – is going to set some examples.
its not insurance. . . insurance has reserves and investments and a claims paying scheme.
Travel insurance is a ponzi scheme – or at least a variation on the ol’ Madoff Merry-go-round.
Travel insurance sells you a $200 policy, wherein the travel agent gets to keep a $20 commission, and the broker keeps $100 and then they put $80 into a pot to pay claims. After they sell 100 policies, they can pay granny’s $8000 claim and the whole scheme starts over. There are no reserves, no investments no nuthin’ which a normal insurance company has. They price coverage not using actuarial possibilities of chance but at a level which allows them to buy a new Porsche every 2 years, a new Mercedes for the wife and the convertible Chrysler for the mistress.
Everyone who has ever read a ‘travel insurance’ policy knows this since true travel ‘insurance’ is simply not a profitable business – and without profit, no one is in the business. Even the legit companies come and go as they learn there is no way to turn a profit and ever pay a claim . . .
The Road to the Gold!
COUNTS
Diana’s Travel South 7
St. Lucie West 3
Palm Coast Travel 3
Four Season Tours & Tvl 2
JB Travel 1
Ahoy Cruises 1
Yet to be named: Legendary Journeys, Best Price Cruises
My company was actually pitched these policies. One of their selling points was that you didn’t need a license to sell them because they weren’t insurance but travel protection contracts. We ran away at that point.
@Joe Farrell As a seller of TravelGuard insurance, I can tell you that like any insurance it can be a profitable business (for them not us). It just takes scores of volume to build up a large enough investment reserve to cover claims. TG actually does it and maintains good customer service inspite of being part of AIG.
Hi Chris,
I’ve been following this as well. Loved the blog especially the use of Bird pictures. :)
To show my appreciation, I’ve added your headline and a link back to your site…see it here: http://www.ulive4.com/news.php
By the way, I added my email to your list to receive updates. Thanks!
Serg
@John and Joe…
I heard the pitch, too and knew it was something to run for the hills. No one in the travel business makes significant sums selling travel insurance. It’s merely a service offered to your clients and you are compensated about 10% per policy and most policies are on average $300-600. These travel agents were lured in by the excessive, unrealistic commissions and probably made more money selling illegal travel insurance than on cruises and tours. If the state of Florida really wanted to get to the bottom of this, they would investigate the actual numbers of policies these agencies sold. The 125 by Demore is a mere pittance compared to what agencies like Palm Coast probably sold. The DFS will find these agents were making huge sums of money on overrides and signing bonuses. Just wait until the employees of these travel agencies start squealing to save their hides.
@John; @Carole:
This is not meant to be confrontational in any way, but when you were presented with this “get rich” scheme, did you speak up, and notify authorities? I don’t minimize the problems that could result when one does this. All of the agencies that supposedly represent companies in the travel business like CLIA and ASTA also should have spoken up, but I know for a fact that when Trip Assured was selling an obviously illegal scam product, one of these agencies was actively promoting the product to it’s travel agent clients as a way to icrease their revenues! In a perfect world, professional organizations would be self-policing, but it’s pretty apparent that in this case, those who could have nipped this scam in the bud didn’t act. Lives have been ruined and deaths have occurred because no one wanted to be the first to scream that these bottom feeders were fleecing their naive customers.
In my last post, I stated that respected organizations like CLIA and ASTA had actually promoted the sale of illegal travel products like Trip Assured by it’s members. After checking my notes, I noticed that the organization that actually did this was NACOA. My apologies to CLIA and ASTA.
The text below is an actual fax that NACOA sent to it’s membership in 2003. The only information that I removed is the list of members who won prizes in a drawing.
Please note the individual who represented Trip Assured at that time. It’s our old friend, Jerry Watson, who continued this scam for several years after he left Trip Assured, to establish his own scam company.
Why are we not surprised?
————————————————————————————–
NACOA JUNE FAX
Board of Director Election Results President, Donna K. Esposito, MCC,
VP/Treasurer, Sandra Perdue, MCC, Director, Theresa DiNardo, AAC.
SafeSail Insurance…we have been advised that a significant number of
members have not signed up for the NACOA insurance program through
Trip Assured. PLEASE keep in mind our agreement with Trip Assured
affords NACOA the opportunity to earn an override that helps defray the
cost of operating your association. We urge you to complete the form being sent at the end of this document and return it to them at 954-784-6600 ASAP. If we have enough members complete the form and return it
NACOA will be paid a signing bonus. We are working with them to come
up with an incentive to urge you the members to give this program a chance. By selling this program you help yourself, your clients and your association.
Education…CLIA advises they will be sending a trainer to our seminar at sea aboard the NORWEGIAN DAWN 9/28/03. Remember if you plan to renew your CLIA card you have to participate in a CLIA training program in 2003. This is a perfect opportunity to experience a beautiful new ship and earn valuable points towards certification or renewal of your CLIA ID for 2004. There are a limited number of cabins available Space is still available on the QE2 sailing December 21, 2003 15-night holiday sailing. If you need an application for either of these cruises please email the NACOA office nacoafl@aol.com and one will be faxed to you.
RENEWALS…it is time to renew your membership in NACOA. Your current membership will expire on June 30, 2003. Please send in your application now so that we can continue to offer you seminars, inaugurals and other programs. We need your support to keep us a viable association. If you have misplaced your renewal application please advise us and we will forward one to you promptly.
We thank those of you who have already renewed and are happy to
announce the winners of the CARNIVAL CRUISES that were offered in a drawing for early renewals. J. Watson of Trip Assured conducted the
drawing. We are sorry all of you could not win.
Congratulations to all of the winners. Your names, addresses, telephone and fax numbers we have on your applications have been submitted to Carnival Cruise Lines. All information regarding your cruise prize will be sent to you directly from Carnival. BON VOYAGE!
TRIP ASSURED
ACCOUNT REGISTRATION INFORMATION
Agency Name _______________________________
Owner/Manager _______________________________
Street _______________________________
City _______________________________
State _______________________________
Zip Code _______________________________
Telephone _______________________________
Fax _______________________________
Email _______________________________
ARC/CLIA # _______________________________
NACOA ID _______________________________
Please fax to: 954-784-6600
Attn: Jerry
I was informed yesterday by an attorney at Fla. Dept, of Financial Services that they are preparing a cease and desist order against LJ. She expected it to go out in the next few weeks, so DFS is getting to the whales. She hinted that they would be looking at criminal charges as well against those TS who seemed to be aware of the scam and kept doing it anyway. Wouldn’t that be pretty much all of the TAs were blogged about over the years?
Mr. Hahn: Did any of the travel agencies who are being investigated by Florida for selling Prime, also sell Trip Assured? I am a Trip Assured victim and cannot believe that these travel agents would still be selling plans that are against the law.
@Billie Keirstead:
I’m sure that there are many others, Billie. I was scammed by Trip Assured way back in 2003, when I purchased the policy from a large online-only TA in South Florida. When I complained to the owner, he told me that he found out that McKinley Johnson, the owner of Trip Assured was dishonest, and he was suing him too. Unfortunately, I found out in about 2008 that this TA was then selling Prime Travel Protection. Was he so naive (or greedy) that he got sucked into two nearly identical scams? I doubt it, but I haven’t seen any bloggers make accusations against this guy or his company. If the State charges him for being complicit in this scam, I’ll be happy to name him.
@Carl Hester
The South Florida Sun Sentinel reported that Palm Coast Travel was advertising Trip Assured from 2003 – 2005. I’m not sure of the exact date of the article, but it was posted on this site. According to several posters who purchased Trip Assured plans, Legendary Journeys and Best Price Cruises were sellers.
@Carl Hester:
I’m sure that the “Big Three” (Palm Coast Travel, Best Price Cruises, Legendary Journeys) sold illegal travel insurance products under at least three different names, starting with Trip Assured, and progressing through Vacation Protection Services and Prime Travel Protection. Jerry Watson, who worked for Trip Assured before starting his own series of companies, changed his geographic location and the name of his company so many times, that many of his captive travel agents, lured by the irresistable 30% to 40% commissions, followed him like dogs following a meat truck.
As for other companies, I’m sure that hundreds of companies nationwide participated in this scam, but many of them may have gotten in on the illicit gains only after Jerry Watson filled them in on the money to be made. Unfortunately, Florida isn’t the only state where the Travel Agent scammers reside, although the “Big Three” sold their product worldwide, which makes me hope that the Federal Authorities, realizing that internet fraud and violations of interstate commerce laws, might consider charges in the future.
We may never know the extent of this fraud, but I feel that it’s gigantic. My fondrst hope is that the other 49 states, when they hear about the evil that has been done, will do their own investigation, and punish the TAs in their state who participated in this fraud.
@Eugene Hahn and Cliff Sousa
This is an outrage! You mean these same travel agencies that sold Trip Assured also sold Prime Travel Protection and through those two other companies, too?!? I absolutely don’t believe this! How could the authorities allow this to happen? I read the orders posted on this website by Mr. Elliot and it’s like a slap on the wrist. I am going to personally contact my representative in Congress and also the U.S.Attorney for my District. These travel agents should be thrown in jail.
Is there an applicable law in Florida applicable to travel agents located in Florida governing cancellation and refunds?
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