The ultimate customer screwjob: Travel company closes, leaves travelers stranded

[Crazedclerkthe2nd]

http://www.nj.com/business/index.ssf...ered_with.html

Summary: A travel company suddenly closed in early October leaving over 150 people without hotel, plane and event reservations that were supposed to have been paid for. In many cases, the travelers had already LEFT ON THE TRIP when they they were told what happened.

Many customers paid upwards of $3000 for travel packages only to discover the money was gone and nothing had been booked for them.

The company owner says they let the customers down, but has not offered any apology, compensation or explanation for the sudden shutdown.

No bankruptcy filing has been made by the company yet and it's unclear whether travelers will be able to recoup any of the missing money.

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This isn't the first time I've read stories like this but it makes me so angry every time. Can you imagine being stranded in a foreign country without valid hotel and/or plane reservations AND realizing the $3000 you paid that should have covered these things is completely gone as well?

I mean the company obviously committed at least one crime (theft), but that doesn't guarantee customers will get any money back even if a court rules in their favor. If the money is gone, it's gone.

I also highly suspect the owner and the executives of the company will see any jail time or serious penalty for this, which is absolutely appalling.

[TheHuckster]

I also highly suspect the owner and the executives of the company will see any jail time or serious penalty for this, which is absolutely appalling.

If the company closed for any reason other than bankruptcy, then I'd agree with you. However, if they, through failed but legal business practices, simply don't have the funds to finance their customers' trips, there's literally nothing they can do. They have no money to pay the airlines and accommodations, nor do they have any money to refund their money.

One could find them possibly criminally negligent or fraudulent (i.e. one of the execs gambled their funds away) but it's also possible that their financial failure was due to some unexpected circumstance (i.e. a flood, other outstanding lawsuit settlement, an investor backing out of a much anticipated deal, a balloon payment on a loan, etc.) which left them literally empty handed and with no options.

Sure, you have insurance to mitigate those risks, but they're often impossible to deal with, and they don't cover everything.

We don't have the whole story. If they kept whatever funds they have for themselves, or if their business failed through illegitimate means, then it's a criminal fraud case. Otherwise, if they simply fell upon hard times, which can happen in an economy like this, then it can only be a civil case. They didn't knowingly defraud the consumers, and clearly they had every motivation to stay in business and honor their customers' trips. Because in this case they lost their source of income and investment, too.

Hopefully the consumers are able to get their money back, though. After liquidating their assets, they just might be able to give the stranded tourists at least some of their money back.

[Andara Bledin]

They accepted money for trips and then did nothing to make those trips possible and never told the people who paid them, leading said people to get to their destinations and find themselves without any bookings for hotels.

I cannot conceive of any way in which you can have that result without committing fraud.

The company has been failing to book tours as far back as April and was continuing to take money from people as much as only 2 days before they locked their doors and stopped taking calls. They had to have known, being a small firm owned by only two people, that they couldn't possibly fulfill the contracts they were still selling.

Also, the fact that many travelers paid for insurance and that insurance wasn't bought in turn is actually a huge case of fraud.

It's also worth noting that the cash discount option only started being offered this year. That's an awfully massive coincidence that they'd suddenly start offering a discount on the least secure (to the buyer) form of payment and stop actually doing any work on any trips that were scheduled for after their close date. That discount was 10%. That's an outrageous discount for cash payments, and just increases how suspicious the entire thing is.

Article at TravelWeekly.com

^-.-^

[TheHuckster]

After spending more time looking at this, I have to agree and renounce my previous post. It's most definitely very suspicious and odd to say the least. My initial response was more a knee-jerk reaction than anything else.

[Jester]

Anyone else have the Steve Miller song "Take the Money and Run" going through their head after reading those articles?

[crashhelmet]

Most Travel Agents now a days have software apps that automatically purchase the tickets and make the reservations. Shit... Some of them are using sites like Expedia and hotels.com for these arrangements. This has to be clear cut fraud.

[AccountingDrone]

And this makes me seriously glad we have never booked through a travel agency

[and for next years proposed trip to Bucharest, we are staying in a friends flat, so no hotel bills!!! We are taking he and his GF out for dinner at a place he normally can't afford in exchange for the crash space and tour guiding]

[bainsidhe]

This is absolutely disgusting and I hate to say it, going out of business screws over customers period. Media Play was a perfect example, where customers had paid for warranties and the rewards card (sometimes years in advance!), which immediately became null and void once they were going out of business. They still accepted gift cards, but trust me the liquidator thought long and hard before agreeing to accept them, otherwise customers would've been screwed there too.

And bankruptcy is absolutely sucky on the side of vendors. Nothing like having a company preparing to go through bankruptcy, so they quick place orders and expedite product, knowing they'll be claiming bankruptcy and the vendors will have to eat it. Grrr.

[HYHYBT]

Bankruptcy stinks all around, but it's at least usually mostly honest. This doesn't sound like a bankruptcy, or at most would be a crooked one.

[Peppergirl]

And this makes me seriously glad we have never booked through a travel agency

Rest assured, the vast majority of us are professional and above board. We find this type of behavior appalling.

[wolfie]

And bankruptcy is absolutely sucky on the side of vendors. Nothing like having a company preparing to go through bankruptcy, so they quick place orders and expedite product, knowing they'll be claiming bankruptcy and the vendors will have to eat it. Grrr.

But doesn't the bankruptcy judge have the authority (and responsibility) to look over pre-declaration transactions for a specific period of time, and deem those that appear to be suspicious as non-dischargeable? For example, business has ordered 100 widgets a month, on the first of the month, every month for the past 5 years. They file for bankruptcy on the 7th. If their last widget purchase was 100 widgets on the 1st, that fits their normal pattern, and would fall into the category of "debts that can be discharged". If, in addition to their purchase of 100 widgets on the 1st, they also purchased 5000 on the 6th, that purchase would be ruled an abuse of the bankruptcy process, and not dischargeable (i.e. they'd still have to pay for it).

[bainsidhe]

But doesn't the bankruptcy judge have the authority (and responsibility) to look over pre-declaration transactions for a specific period of time, and deem those that appear to be suspicious as non-dischargeable?

It doesn't have to be particularly suspicious activity. Until a company officially files bankruptcy, they're still taking customer orders and needing product to ship. But as the deadline looms, it's likely they've stopped paying invoices while they rush to fill customer orders before everything comes to a halt. I don't envy any company that goes through bankruptcy, but it royally sucks on the vendor side of things as well. And vendors are way down the list after payroll and secured loans and such.

I agree with another poster's comment that this sounds more like a scam than anything else. When Karma comes around, I hope she takes a big bite out of their ass.

[NorthernZel]

And this makes me seriously glad we have never booked through a travel agency

Actually, within Europe, it's not a bad idea. In most European countries, the major travel agencies pay to a governmental insurance plan that covers refunds to customers should the agency (or the airline/hotel the particular agency has a contract with) go bankrupt.

[s_stabeler]

yeah, in the UK, it's ATOL. If the travel agent (or more often, the airline) goes bankrupt, then the CAA will get anybody stranded home. It's why it's actually a good idea to use a travel agent in the UK; you are guaranteed to get a refund or trip home if the airline goes bust.

[AccountingDrone]

Rest assured, the vast majority of us are professional and above board. We find this type of behavior appalling.

There is really only one travel agency I would use, it is someone that normally posts over on Cruise Critic that runs a handicapped specific travel service. One thing I learned on a cruise a few years ago that vacation venues are generally not set up for people in wheelchairs.

You would not believe some of the crap this past spring in hotels that assured me the room I reserved was handicapped accessible... we obviously have different ideas of accessibility!