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It’s alive! Prime Travel Protection pursues customer who didn’t want “insurance”

July 29, 2009

credit cardRemember Prime Travel protection, the Colorado travel insurance company that shut down amid allegations it sold unlicensed policies? Turns out it’s not dead yet.

When Dick Rheinhardt booked a cruise vacation through Four Seasons Tours and Cruises, in Largo, Fla., last November, he agreed to pay $824 for what he believed to be a travel insurance policy. But it wasn’t a real policy, he says. A few months later, Florida authorities told three agencies that Prime Travel Protection policies might be bogus. Rheinhardt wanted a refund.

That’s when he discovered Prime Travel Protection was alive and well.

I notified our credit card company that we were protesting the payment of the premium. Travel Protection, Inc. responded with a letter to the credit card company stating that the trip had been covered, and they would have paid a claim if one had been filed.

In response I faxed a copy of a six-page “Cease and Desist” order issued by Florida Department of Financial Services against Prime Travel Protection, Jerry Watson and his multiple companies. This order states that their product is insurance and his companies are not, and have never been licensed to do business in Florida.

Rheinhardt has good reason to be suspicious. He had made another claim through Prime Travel Protection on a cruise vacation, and it hasn’t been paid yet. After the Florida order, he had no intention of waiting around to find out if the second policy would be effective, should he need to file a claim.

On July 2, MasterCard sent us a letter stating “There is no evidence provided to show the merchant did not provide service as agreed.” They sent this letter after receiving the faxed copy of the Cease and Desist Order. Upon receiving this letter we immediately called MasterCard and were told that the letter may have been sent by mistake and that higher management was reviewing the file.

Rheinhardt says he’s working with Florida’s Department of Financial Services in its investigation of the travel agent. “They sent a Special Investigator, Susan V. Gorton, to our home and we gave her information that she thought would be helpful,” he told me.

I contacted MasterCard and Four Seasons Tours and Cruises last week and asked for their side of the story. Neither has responded.

We don’t have to wait for the results of Rheinhardt’s credit card dispute to draw a few conclusions. First, despite its claims to the contrary, Prime Travel Protection apparently remains in business.

Second, the cease-and-desist orders by Florida and Colorado have apparently been ineffective, if the goal was to close down a company that sold unlicensed travel insurance. From where I’m sitting, it looks as if insurance regulators simply went through the motions and didn’t follow through with what the tough enforcement action that was necessary.

And finally, it looks as if credit card companies, rather than siding with aggrieved customers, are leaning toward taking the side of a shady merchant.

If MasterCard resolves this dispute in Prime Travel Protection’s favor, I believe Rheinhardt has a solid case for small claims court. At the very least, he should consider switching credit cards.

(Photo: barsen/Flickr Creative Commons)

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

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14 comments

  • http://www.singleparenttravel.net John F

    $824 is a LOT of money for ANY insurance. I forget the dates of all this, but to be honest, if the C&D happened after the “policy” was purchased and the trip was completed without a claim…..

    While Prime are scums, take this a step further, and say Allstate is found to be “unlicensed” in some jurisdiction and has a history of paying some claims and denying others. They are ordered to cease and desist–are all of their clients who never filed a claim entitled to a refund of their premium?

    Not very cut and dry to me. But if the passenger has a valid claim on a previous trip–absolutely take Prime to court.

  • Lisa S

    Just shows how useless regulators are and how the criminal companies continue to conduct their unlicensed activities for years without apparent consequences. Makes it very hard to trust any company to provide the services they claim they will provide, especially in the travel industry.

  • Mindy

    I dunno if there is much that the Department of Financial Services can do. They fine and shut down insurance companies. Since this isn’t an actual company..and holds no revokable license… they seem sort of powerless in this situation.

    I would hope they would bring in actual law enforcement.. instead of just a regulatory agency here.

  • http://www.icoulduseadeal.blogspot.com Jeanine Peterson

    I am not sure if this is the rip off Insurance company that Legendary Journeys is / was using last year when my mother got ripped off by them. She became unable to go on a planned vacation that LJ sold her and she has yet to see any refund / restitution for them (LJ or the ins co) for not being licenced to sell Insurance in the state of Florida. She filed complaints with the Dept. of Fin. Svcs. and the Dept .of Insurance , and the Consumer protection. I don’t know why Florida hasn’t shut down Legendary Journeys yet for their scams. jtrophy at aol dot com

  • Carver Farrow

    @John F

    I can understand your confusion. However, from the legal perspective, this is a no-brainer. You simply are not entitled to compensation for performing services while unlicensed. The exception would be adminstrative licenses such as business licenses.

    Look at it from this perspective. It is fortunate that nothing happened while Dick was traveling. However, the purpose of insurance is to insure against bad things. Since the company was fraudulent, there was actually no insurance. Dick received nothing for his money

  • Carver Farrow

    By the way, to say that Dick has a solid small claims case is the understatement of the year. All he has to do is to bring the C & D letter and proof of payment and he wins. Of course collecting might be a b-.

  • Anonymous

    Carver, I think your last sentence might be the understatement of the year. ;)

  • Joe Farrell

    if travel protection insurance is required to be licensed in either the jurisdiction where the insurer is located [as is the case with] OR in the jurisdiction where the risk is located [now THAT is a good question, huh? it is where Dick lives? Where the travel was? destination? the list is endless] then one cannot either insure against the risk or purchase a policy. The policy is illegal.

    1. Who hooked Dick up with the policy? They bear some responsibility
    2. Mastercard MUST refund the illegal transaction. They cannot collect money for an illegal transaction.

  • http://raystravelreport.blogspot.com/ Ray’s Travel Guide

    thank you for the information

  • http://www.icoulduseadeal.blogspot.com jeanine

    Joe,

    One of the problems with scam companies like this and Legendary Journeys is that they stress prepaying the entire trip by check to save $200 . Thus you are giving up your credit card protection most of us don’t think about until it is too late. What we need is a lawyer that would take the case as a class action or something against the state (of FL ) for not protecting us against these travel insurance scammers and Legendary Journeys.

  • Carver

    @Joe

    I strongly suspect that you only have to be licensed where you are actually selling the insurance or are providing services. Otherwise, for travel insurance, you could conceivable be required to be licensed everywhere.

  • JoeM1929

    There are Florida Statutes which govern the sale of travel insurance and further define the term “insurance”. To be a seller of insurance, a travel agent must be licensed by the state. Not everyone in the travel agency, but at least one person. As such, the travel agency is NOT allowed to sell insurance that is not licensed to do business in the state of Florida. Further, any sale of insurance through an unlicensed company is considered to be a felony, and the degree of felony is determined by the amount of premium collected, and any loss to a purchaser is the responsibility of the selling travel agent. For more information, see Florida Statutes #626. The law is very plain and many of the issues here are merely subterfuge raised by travel agents that are guilty of the sales of these policies. These travel agencies are under investigation and will soon have their day in court.

  • James

    MasterCard, Visa and American Express all reimbursed the premiums for those who were scammed by Trip Assured from 2003-’06. Don’t waste your time with customer service. These three companies are all public entities. Send a copy of Prime Travel’s cease and desist orders to the CEO of each company and you’ll have your refund within days – it worked with Trip Assured. As far as a class action suit…don’t waste your time with Prime Travel – but going after the state of Florida would be a good idea. It took Florida years to halt the practices of Trip Assured and now they are sitting on their hands while millions of more dollars have been ripped off from their citizens.

  • Frankie Leo

    Sadly, it appears that if all life as we know it was wiped out by a conflagration of massive proportions, the only creatures left would be cockroaches and travel insurance scam artists, who would be then trying to develop a plan for selling bogus travel insurance to the cockroaches.
    Exposing these people for what they are is the only alternative that we have, since public officials refuse to take a role in closing down these businesses and heavily penalizing the greedy travel agents who sell their products.

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