Here we go again.
Last March, I reported that the Florida regulators had warned three travel agencies that sold insurance policies offered by bankrupt Prime Travel Protection Services of Arvada, Colo., that its activities may have run afoul of state insurance statues.
I quoted Nina Banister, a spokeswoman for Florida’s Department of Financial Services, as saying the state had ordered the agencies to “stop transacting business” and that “they’re on notice that further activity is pending [by the state].”
Soon after that, Florida issued a press release stating, “As a result of ongoing investigations into complaints about the sale of unauthorized travel insurance in Florida, Chief Financial Officer Alex Sink has notified three travel agencies that she intends to order them to stop selling insurance.”
The legal notice to one of the agencies, Palm Coast Travel, alleges that the company “directly or indirectly acted as agent for or otherwise represented or aided one or more unauthorized insurers…” The matter is still pending.
Now Palm Coast Travel has sued one of its customers, Peter Lay, and me, alleging among other things that I defamed the company when I reported the story. Here’s the full text of the complaint (PDF).
Among Palm Coast’s allegations against me are the following:
Elliott included among his reporting recent regulatory investigations of customer complaints regarding Prime Travel Protection and Jerry Watson. Elliott’s reporting included publication of false information regarding Palm Coast, which has and will continue to damage Palm Coast’s business unless it is properly remedied.
Among the statements Elliott published were falsehoods that stated that Palm Coast had been ordered to cease doing business by the State of Florida. No such order exists, and therefore that report was false.
Further, Elliott, when purporting to “clarify” his deliberately false statement regarding the State of Florida’s investigation of travel insurance, did not fully remedy the false impression he fostered regarding Palm Coast’s role.
Elliott’s falsehoods were directed at, among other aspects of Palm Coast’s business, its reputation in the trade or industry of travel. Moreover, Elliott did not properly correct, clarify, or retract his falsehoods, despite proper notice.
That’s certainly an interesting perspective on what happened. Perhaps Palm Coast Travel’s next step will be to sue the State of Florida for issuing the press release?
(Photo: Mel B./Flickr Creative Commons)
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I just discovered this morning that in addition to his other qualities, Lee Smolinski can see into the future. Let me tell you why:
In his Lawsuit, Lee makes two damning accusations against Peter Lay:
“Until Defendant Lay started his efforts against Palm Coast relating to his dissatisfaction with Palm Coast’s attempt to accommodate him, Palm Coast had an ‘A-’ rating with the Better Business Bureau. The rating is now ‘B+’”’.
“When his claim was denied because it was facially deficient, he participated in an internet campaign to tarnish Palm Coast’s reputation. Without fully disclosing the details of his interactions with Palm Coast, he regularly accused Palm Coast of a scam”.
Let’s deal with the first accusation:
Just about 100% of the individuals who walk on two feet know that rumor and innuendo have no impact on a BBB rating. Read the BBB’s Methodology for proof of this. Besides, Mr. Smolinski’s accusation is incorrect. The current BBB rating for “Smartcruiser.com / Palm Coast Travel is ‘A+’. Shall we, then, delete this accusation from the lawsuit?
Now for the Second Accusation:
Mr. Lay’s dissatisfaction with Mr. Smolinski and his companies was expressed in the comments of two columns written by Chris Elliott. These columns were:
“The Prime Travel protection mystery is solved” pub. August 8, 2008
“Palm Coast Travel sues a customer – and me” pub. January 10, 2010
In the First Article, (188) comments were made before comments were closed by the writer on February 11, 2009. Of these comments, four were written by Peter, and two of the comments really didn’t concern Mr. Smolinski.
In the Second Article, (101) comments were made as of today, and four were written by Peter.
I would urge anyone to go back and read these comments, and decide for themselves where “reckless falsehoods” were committed. Mr. Smolinski would like you to believe that Peter left out important details, and he helpfully included them in his lawsuit. My Family and I have been cruising for over fifteen years. I read all of the details, and can assure you that none of them had any mitigating circumstances that eliminated the fact that Mr. Smolinski sold an illegal fraud insurance product to Mr. Lay.
Now, let’s get to my claim that Mr. Smolinski can see into the future.
Before January 10, 2010, a Google or Yahoo inquiry (“Lee Smolinski” “Peter Lay”) would result in one “hit” containing information about Peter’s dissatisfaction with Mr. Smolinski. Even then, you’d have to be a real travel insurance junky to read the article, sort through all of the (188) comments, and then decide to complain to the BBB about Smolinski’s underhanded tactics
After Chris Elliott wrote his second article on January 10, 2010, the same internet inquiry would produce two “hits” regarding Peter’s dissatisfaction.
Now, Mr. Smolinski may produce a website named
http://www.pigmy-NBA-Centers.com, or some other obscure site that Peter posted on to complain about his treatment, but everyone in the know will admit that if it doesn’t appear on Google or Yahoo, it’s irrelevant.
Is this evidence that Peter “participated in an internet campaign”? The Comments portion of Chris Elliott’s first article was open for posting for over six months, from August 8, 2008 through February 11, 2009. In that time, Peter posted two comments that concerned his dissatisfaction with Mr. Smolinski and his companies. That’s one comment every three months. THAT’S SOME CAMPAIGN.
Based on these two comments, Mr. Smolinski, who apparently has no awareness of the Laws regarding Freedom of Speech, decided to silence Peter by suing him. His rationale must have been that in the future, everyone in the country was going to see Peter’s comments on the internet, so he better be prepared. Unfortunately for Lee, it hasn’t happened. However, “hits” on the internet are starting to increase dramatically, because publications worldwide are picking up the articles and republishing them as examples of how not to treat a customer. In addition, several independent writers have written articles about Mr. Smolinski and several other Florida-based travel agents, retelling the sordid story of the greedy selling of fraud insurance policies that has been going on for more than six years, and has victimized thousands of customers.
You did this to yourself, Lee. In your attempts to justify your actions, you’ve made yourself well-known to travelers….and for all the wrong reasons!
It was Lee Smolinski who lowered the reputation of Lee Smolinski’s companies. The quicker you accept this fact and pay the valid claims that you owe, the better off your company will be in the future.
According to Smolinsi’s lawsuit, Peter’s “campaign” also included his complaints to the Florida Department of Financial Services and the Better Business Bureau. Obviously, according to Smolinski these complaints must have been valid because Palm Coast Travel’s rating dropped and the state of Florida sent Smolinski an intent to issue a cease and desist. Of course Smolinski is claiming Peter was reckless in his complaint. Maybe Smolinski should complain to the DFS and BBB that their actions were as a result of reckless testimony on the part of Peter.
You can’t have it both ways, Smolinski. Just like you can’t sell trip protection, claim it’s insurance and then cry it’s protection when you know you were wrong.
DON’T BE FOOLED!
After reading the well-written post by Mr. Stokes, I did my own research, and I came to a quick conclusion. Mr. Smolinski is certainly working very hard to stop the bloodletting!
He, an his Public Relations Firm are doing everything possible to give his company favorable ratings and preferred positions on the internet. Be aware that if you make the effort, it isn’t hard to do. You just have to get the post recognized, and hire multitudes of people to access the posting. You can also, from what I understand, pay Google, Yahoo, etc. to give preferred postings (page 1, etc.) to what you want to let people know.
By the way, I’ve never seen anyone publicize a BBB rating in this manner. I plan to contact the BBB and ask them whether it meets their Code of Ethics.
When you do your research, input “Lee Smolinski”, and read the results. After you do this, try a few other combinations like “”Lee Smolinski”+”Jerry Watson”. Notice the difference in how his company is portrayed?
Frankie Leo if you scroll a few posts back, there is a letter posted to the BBB with the name of the contact. You should call that person to make your inquiry. The BBB chapter is the SE Florida and Caribbean office. The press release claims Smartcruiser received an A+ rating, but there is nothing listed for Smartcruiser on the BBB website. The only two listings are Palm Coast Travel and Smart Travel. Smartcruiser is probably a DBA for one of Smolinski’s companies, but there is no mention of this fact in the press release. What can you expect? Remember, Smolinski sold unauthorized trip protection and advertised it as insurance.
“Free trip insurance is just another way SmartCruiser.com differentiates itself from the competition”
I did what you suggested and typed in “Lee Smolinski” and came up with the following sentence that appeared in the article below, published in June 2006.
http://findarticles.com/p/articles/mi_pwwi/is_200606/ai_n16474675/
The question is, was Smartcruiser offering real insurance in June 2006 or the illegal trip protection? That shouldn’t be too difficult to find out. Of course, if it was not insurance, the defense will be, “but it was free”.
To: Chris Elliott and Mr. Lay
To determine the full context of this issue, could you please post the demand letter Mr. Smolinski’s attorneys sent to each of you prior to filing the lawsuit?
@John, sure thing. Here’s mine. Bear in mind that the alleged inaccuracy they refer to had already been changed by the time I received this letter. Even so, my lawyer and I spent a considerable amount of time revising the post after we received this little piece of fan mail, to ensure the information was absolutely correct.
Ron B:
In reply to your question, I’ll research the issue some more.
For what it’s worth:
Exerpt from Diane Lade; FL Sun-Sentinel; March 29, 2009
“Smartcruiser.com, the second agency notified by Sink, offered “trip insurance” benefits from Trip Assured, according to archived Web sites from 2003 through 2005. Lee Smolinski, CEO of Boca Raton-based Smartcruiser, referred inquires to his attorney, Dan Newman, who said: “We’ve heard of the company, but we can’t talk about Trip Assured. My clients don’t believe they did anything improper and were in compliance with the law.”
Article from Mary Jo Melone; Healthcare News; January 6, 2010
“In addition to the Watsons, DFS continues to investigate three travel agencies: Vacation Superstore Network doing business as Best Price Cruises, a web site called SmartCruiser.com, and Super Travel of West Palm Beach. The owner of Vacation Superstore Network, Ron Russo, could not be reached. A lawyer for SmartCruiser.com, Dan Newman, declined to comment. Super Travel of West Palm Beach could not be located.”
Dan Newman, Mr. Smolinski’s Lawyer, continues to do his best imitation of Sgt. Schultz (I KNOW NOTHING!) since Hogan’s Heroes was cancelled.
I’ll get back to you on your original question. As a general observation, though, Mr Smolinski, in the period from 2004 through early 2009, used the word “insurance” often on his website, but didn’t seem to feature the name of his “insurer” in any detail. Right now, he’s making a big show of trumpeting “Access America” as his insurer. One has to wonder why.
The letter you posted, Chris was written almost 11 months ago; you corrected what was requested to be done and therefore a lawsuit was not filed within five days as you were noticed (had you not complied). Now, 11 months later they come back repeating the same charge that was corrected (#45) plus other charges that were not preceded by a demand for retraction and/or correction? Is this correct?
The way I see this, the lawsuit is nothing more than intimidation. The other counts appear to me to be be accurate and if not, then Smolinski should ask for a similar retraction.You have done the honorable thing, Chris and you continue to do so.
I would be interested in reviewing Mr. Lay’s demand letter.
Frankie Leo wrote:
“…Mr Smolinski, in the period from 2004 through early 2009, used the word “insurance” often on his website, but didn’t seem to feature the name of his “insurer” in any detail. Right now, he’s making a big show of trumpeting “Access America” as his insurer. One has to wonder why…”
Of course Smolinski’s making a big show of trumpeting up a legitimate insurer. Just like he went out and received his legitimate license to sell legitimate insurance which was issued only two weeks ago.
I just checked on an internet site (wayback machine) and was able to pull up Smartcruiser.com’s website for September 30, 2003 and the words, “Trip Insurance” in white lettering on a blue background were clearly posted on the left column of the website. When you click on the words, “Trip Insurance” you are taken to another page labeled “Trip Insurance” and at the bottom of the page is the following notation:
“Free Look Grace Period – Full refund if you notify TRIP ASSURED© in writing within ten (10) days, and your trip has not started.”
So it was insurance for sake of advertising to customers, but it wasn’t insurance according to state regulations. When confronted by Mr. Lay regarding PTP, Mr. Smolinski wrote that Palm Coast Travel was not representing an insurer. It appears the modus operandi is to advertise and sell it as insurance, but claim it isn’t when the customer is unable to collect on a premium. then of course, file a lawsuit if the customer doesn’t go away. September 2003 is over 7 years ago. How long has Palm Coast Travel been selling this stuff?
I used to have a fire and casualty insurance license and I bet if I sold one unauthorized policy I’d have been busted. Who does Smolinski know in Tallahassee?
Ron, that looks like the Smoking Gun! I guess that Smolinski missed that one when he did his selective editing to block access. This finding should be high on our “GOTCHA” file.
Many thanks.
@John a few posts back. I can’t comply with your request because I don’t have a letter from Mr Smolinski’s attorney.
I’m very surprised, Mr. Lay. The first step in a civil suit is usually a demand letter.
We all know what the recent good publicity for Mr. Smolinski’s companies means. It’s an attempt to counter the bad publicty that he’s received from his business dealings. An example is his press release trumpeting the fact that Oceania has inducted his company into their “Cruise Conoisseur’s Club”. Be aware that this is a reward for volume sellers of the Oceania brand cruises, and Mr. Smolinski qualifies. If you do an internet search, you’ll also find that many other companies, including travel agents who operate out of their home, have also earned this distinction. The award doed not take BBB ratings, insurance product quality, and agression toward customers into account. That’s probably a good thing for Mr. Smolinski.
No one on this board has ever, to my knowledge, denied that Mr. Smolinski has sold a lot of cruises. Now that we have that matter settled, we’re waiting for Mr. Smolinski to tell us of other large travel agents who have sued former customers and nationally recognized travel writers for telling others about the shoddy “insurance” products that he and his company have sold for over six years.
Harry Baxter you wrote that Mr. Smolinski sold “shoddy insurance products”. He didn’t sell shoddy insurance, he sold ILLEGAL insurance!
Can you answer this, Harry? You seem to be up on all the legalities. I read the intent to issue a cease and desist that was filed against Mr. Smolinski’s Palm Coast Travel last March. The order gave him 21 days to request a hearing or a cease and desist would be issued. I called the Florida DFS and they told me that no cease and desist was ever issued. So, I’m assuming a hearing must have been held. No one at the DFS knew anything about a hearing. Could Smolinski have just ignored this order?
I’m certainly not a legal expert, Cliff, but my understanding, from the exlanation given by Chris Elliott at the beginning of this blog (see above) is that he correctly quoted a Spokesperson, Nina Banister, of the Department of Financial Service, who said that her organization had ordered the agencies, including Palm Coast Travel, to stop selling the crap that they were selling (Prime Travel Protection)….and she was wrong. Nevertheless, Lee Smolinski sued Chris because Nina erred. I’ve seen Cease & Desist Orders, and FL didn’t issue one in this case. However, there’s no mistaking the fact that Florida intended to issue one (see press release) if the practice continued. This was a mistake on their part, in my opinion. Had they done what they should have done, they would have recognized that Palm Coast Travel and others had sold that garbage FOR SIX YEARS, and immediately penalized them.
They probably rationalized that by early Spring, PTP and Jerry Watson were already exposed and nonfunctional, so a “slap on the wrist” was appropriate. It obviously wasn’t.
I’d also like to point out that Smolinski, after this notification, began to sell real travel insurance (only because he couldn’t find another scam insurance vendor), without a insurance agent’s license (He obtained one this month), and that action is still a felony.
Did any of these travel agencies sell this type of illegal insurance from more than one company? The posts are confusing and I’m getting into this in the “late innings”. From what I am reading some travel agencies jumped to a second illegal company to sell for after the first was closed. Is this accurate?
After I posted yesterday and used the word “felony”, it occurred to me that I should provide supporting information to support such a claim. This is, I believe, enough supporting information.
In the warning sent to Mr. Smolinski on March 11, 2009, Alex Sink, State of Florida CFO, cites violations of Florida Statute 624.401 by Mr. Smolinski and Palm Coast Travel. Here’s what this Statute says:
624.401 Certificate of authority required.–
(1) No person shall act as an insurer, and no insurer or its agents, attorneys, subscribers, or representatives shall directly or indirectly transact insurance, in this state except as authorized by a subsisting certificate of authority issued to the insurer by the office, except as to such transactions as are expressly otherwise provided for in this code.
(4)(a) Any person who acts as an insurer, transacts insurance, or otherwise engages in insurance activities in this state without a certificate of authority in violation of this section commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(b) However, any person acting as an insurer without a valid certificate of authority who violates this section commits insurance fraud, punishable as provided in this paragraph. If the amount of any insurance premium collected with respect to any violation of this section:
3. Is $100,000 or more, the offender commits a felony of the first degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084, and the offender shall be sentenced to a minimum term of imprisonment of 2 years.
When this warning was issued, Lee Smolinski did not have a “Certificate of Authority” (Insurance Agent’s License). After receiving the warning, and after the demise of Prime Travel Protection, Smolinski signed a deal to sell Access America insurance. Access America is a legal insurance product. He continued to sell this insurance until the present time. However, he didn’t obtain an Insurance Agent’s license until January of 2010, which means that he violated the Statute for ten months.
Smolinski has stated in the past that in a twelve month period, he sold approximately 50,000 PTP policies. Let’s assume, then, that in ten months, from March 2009 through January 2010, he sold 41,600 Access America policies. Using an average policy cost of $500 and an average commission to Palm Coast Travel of 5.0% (I’m being VERY conservative), Palm Coast Travel would have received commissions of $1,040,000 in the ten month period.
Please reread the section on Penalties, and then decide for yourself whether or not Mr. Smolinski continued to violate Florida Statute Section 624.401 after he was warned.
Anthony Tomaselli wrote:
“Did any of these travel agencies sell this type of illegal insurance from more than one company? The posts are confusing and I’m getting into this in the “late innings”. From what I am reading some travel agencies jumped to a second illegal company to sell for after the first was closed. Is this accurate?”
Yes, they did. Palm Coast Travel, Best Price Cruises, and Legendary Journeys, the three companies warned by the State of Florida early last year, sold products from Trip Assured, Vacation Protection Services, and Prime Travel Protection. The fact that they did this has been investigated and proven.
My travel agent told me that they stopped selling these plans after I couldn’t get my claim honored. I honestly don’t think my agent knew what she was selling was illegal, although that’s not an excuse. I do know that after I got burned her company started selling a real insurance plan (can’t remember the name, but I did call the state and confirmed they were okay). I can’t believe these travel agencies continued to sell these illegal insurance policies. I hope the state does something to them.
I find myself having to come to the defense of Mr. Smolinski. Harry has written that Palm Coast Travel sold 50,000 PTP policies in 12 months. I think what you meant, Harry was Smolinski’s Palm Coast Travel sold cruises to 50,000 travelers. That’s what is mentioned in the press release announcing Palm Coast’s induction into Oceania’s Connoiseur Club. We do know from published reports that Palm Coast sold illegal insurance from at least 2003-2005 (Sun-Sentinal, March 29, 2009) and they sold as recently as 2007-’08 based on Florida’s intent to issue a cease and desist on March 5, 2009. How many policies sold is a matter for the investigators which brings me to another point…
I was pleased to have received a call from the DFS Fraud Division last week. It appears they are really going to move now on this investigation. Do you know who I think is going to be the person to seal the fate of these travel agencies? Jerry Watson himself. I have a hunch the authorities are going to go to him to spill his guts. He’s got nothing to lose and everything to gain by cooperating.
Thanks, David. I stand corrected.
However, if I reduce the number of policies that he sold to his customers to 4,000, which is 10% of what I quoted, he and his company would still reach the “magic number” quoted at the bottom of Florida Statute Section 624.401, where the most severe penalties kick in.
I think 4000 is a conservative estimate. If Smolinski sold cruises to 50,000 travelers in 2009, what about 2003, 2004, 2005 and 2008 where it’s confirmed he sold illegal insurance? If we just assume he sold 10,000 of these illegal plans those four years at an average price of $200 which is very low and a commission of 25% (which is low compared to what some people have claimed on this board), that’s $2 million! According to Florida Statute Section 624.401, the sale of over $100,000 constitutes a first degree felony. Smolinski will claim to the detectives that what he sold was not insurance, but he’s already dug himself in because in his lawsuit against Chris, he is arguing he believed PTP was legitimate because Watson told him it was licensed in 50 states. If he truly believed it wasn’t insurance, then that argument about it being licensed is pointless.
I also think that the wording in the statute, in Section 624.401, “No person shall action as an insurer….except as authorized by a subsisting Certificate of Authority” could get him. If he wasn’t acting like an insurer when he sold this product, what was he acting like? As the old saying goes, “If it acts like a duck…”
He will, of course, say that his Wife had an Insurance License, but I don’t think that this will pass muster. Smolinski is the face of the franchise, and the word “insurance” appeared in his ads while he was selling illegal insurance.
If you read the intent to issue a cease and desist (highlight my name) there are a number of statutes Smolinski’s Palm Coast has been accused of violating besides what was is outined in 624.401. Included is Statute 626.901 – “Representing or aiding unauthorized insurer prohibited”. Of course, this order was done almost 11 months ago and the DFS has no information as to a resolution.
I just read the complaint and against Elliott and Lay. I would never go so far as to publically say it was chicken s**t but I will say that it has a distinctive hen house odor.
I believe that all travel companies set themselves up so that they can take advantage of you. Thay are happy to call you ‘their’ customer until something goes wrong and you need them to do their job, then you are just a whining ungratefull customer.
I am (now) biased against travel agencies and 3rd party coordinators as a result of several negative experiences in dealing with this type of companies. Reading the complaint by Palm coast travel just reinforced my belief that these companies are to be avoided.
I do have a thought about this company. Do they post testimonials on their web site? Do they keep a file of letters to show potential customers just how good a company they are? Have they ever encouraged or offered an incentive for anyone to post a positive review? Have they ever, themselves, friends or employees, manufactured a positive review?
Thats a whole lot of questions to ask. I don’t know Mr Lay but I have posted on elliott.org’s site. I think something is wrong when a dissatisfied customer can not complain and a journalist can not write.
This is all my personal oponion. I have nothing to do with any of these guys. I am not saying anyone is being untruthfull or dishonest. I am not making any accusations, I am just saying what I think.
Come to think of it, (it being palm coast travel,) ‘me thinks thou doest protest too much’ seems to fit here.
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