Cathy Evans doesn’t fit the profile of a typical scam victim. She’s an account manager for a technology company in Boston, and she likes to think of herself as a discerning customer.
So when she got a voice mail on her cell phone offering her a “free” cruise, she did what most savvy consumers do: she deleted it.
But Evans’ boyfriend, who also got the same call, thought the “exclusive, members-only” discounts offered through a travel club called Pacific Palm Destinations in Woburn, Mass, looked appealing.
“He really wanted to go on the trip,” she says.
Travel club sales tactics
They attended one of its seminars and they both liked the pitch. “They claimed that they are the largest wholesale travel club and that you can buy any kind of vacation for a fraction of what you’d pay on Orbitz,” she says. Also, the renewal rate was just $169 a month, or $2,028 a year — a fraction of her initial $6,995 membership. She signed up with her credit card on the spot.
“It didn’t occur to me that none of what was promised actually even exists,” she says.
Evans asked about Pacific Palms’ cancellation policy, and a representative said although it “didn’t have one” he could give her 72 hours. After she researched Pacific Palms online, she asked for her money back.
Others aren’t so lucky. Most travel clubs offer a shorter cancellation window or none at all, even when state law requires it. They make big promises during high-pressure sales presentations held at malls or in rented office spaces. They usually target retirees with disposable income, although they’ll take your money if you’re on a fixed income, too.
But most importantly, the “exclusive” discounts don’t really exist. Any halfway competent bargain-hunter can find travel deals that are just as good or better online, no membership required.
The reality behind travel club ‘exclusive’ discounts
Stories like Evans have been a staple of my consumer advocacy practice from the beginning. Here’s a virtually identical case from 2010 with a slightly different outcome.
What did Evans’ research reveal? Other complaints that suggested to her that the offer was bogus. Several other reviews seemed to concur with that assessment.
The company insists its product is on the up-and-up.
“We have done nothing as a company that is unethical or against what we represent,” it wrote in a rebuttal to one online complaint. “The unfortunate thing is that people such as yourselves join our program go home and try to find a reason as to why they shouldn’t have and believe anything they read online instead of contacting us and even attempting to book travel and seeing the type of savings we can provide.”
The reluctance to speak out
Evans dug deeper, and says her research unearthed lawsuits and a shady network of travel clubs across the country. According to an investigator for the New Jersey state Attorney General, there’s even a course you can take in Las Vegas on how to pull off a vacation club scam. It covers everything the aspiring travel club startup needs to know, from crafting persuasive sales pitches to renting an office with a short-term lease, to dealing with pesky customer credit-card disputes. (Here’s what you need to know about buying and selling timeshare.)
“It really bugs me that no one is taking action and innocent people are getting ripped off,” she says.
Evans is brave to come forward with her complaint, for two reasons. Most people who participate in travel clubs and who have buyer’s remorse don’t talk about it publicly.
“Most people are too embarrassed to admit they fell for such a scam and they don’t report it,” she told me. “Probably even more people have not attempted to book their free trip or use the travel services yet — so they don’t even know they’ve been taken.”
And second, like other travel clubs, the one she’s dealing turns aggressive when its legitimacy is questioned.
“I’m concerned about this group seeking revenge against me,” she says.
Evans probably isn’t travel club material, which is yet another reason she’s so outspoken. Most of the victims I’ve met are barely computer literate. Anyone who can fire up a smart phone and type the words “Pacific Palms” and “scam” into Google is unlikely to shell out $6,995 for a club membership, regardless of how good the offer sounds.
Scam artists usually look for retired Baby Boomers who are uncomfortable using the Internet and — above all, trusting. People like my parents.
I sent Pacific Palms several emails asking about its operation and Evans’ case. A company representative responded in writing just after my deadline, saying Evans had entered into a contract with the company “of her own free will” on March 21. She asked for a refund within 24 hours and was immediately given one.
Caution against slander
“She never attempted to use our services our got the opportunity to see what we could offer for her,” the representative said.
“Although we were sorry that we didn’t have the opportunity to work with her, Mrs. Evans had every right to cancel her contract. She exercised that right and we obliged accordingly,” it said, adding, “For her to say we scammed her in any way or that we did not do as we were supposed to is totally false.”
“On that note, please understand that you if choose to pursue any kind of slander against our company, based on these false allegations, we will seek legal counsel to stop you,” the representative cautioned.
I’ve said this before, and I’ll say it again: In two decades of consumer advocacy, I’ve never come across a legitimate travel club. Ever.
The ongoing battle
Is it possible that Pacific Palms is a legitimate company, and that Evans is just a disgruntled former customer? Sure, anything is possible.
By the way, if you’ve lost thousands of dollars to a travel club that you believe is fraudulent, don’t wait. Contact local law enforcement, your state’s Attorney General, and the Federal Trade Commission, as soon as possible. The more complaints these agencies receive about travel club scams, the faster they can shut ’em down.
And don’t skip the feds; these operators like to jump across state lines and start over. An FTC consent order will make that really difficult.
In the end, travel club scams exist because we let them. We want to believe we can pay a few thousand dollars and get a “free” trip and deeply discounted travel. We’re trusting and we take people at their word. And as long as we do, these scams will continue.