Markets Wired

The Federal Trade Commission, as part of its Hispanic Law Enforcement Initiative, has filed two court actions against five companies and their owners for allegedly tricking consumers into paying fees for vacation packages they supposedly won in contests, and then failing to provide the promised vacations. At the FTC’s request, the court halted the defendants’ allegedly deceptive practices and froze their assets pending further litigation.

VGC Corporation of America

In the first case, the FTC and the State of Florida, Office of the Attorney General allege that the defendants used Spanish-language radio and TV ads nationwide to offer a vacation package they claimed was worth thousands of dollars as a prize to callers who answered a simple trivia question. For instance, the defendants ran television ads proclaiming “Attention! This program has been interrupted. It’s time to win for the first thirty people that dial the number that appears on the screen and can tell me correctly how that famous Mexican comedian (Mario Moreno) was also known … If you know the answer … you are going to go to Disneyland …” Callers were told they had won a prize, and that if they paid a fee of up to $400 they would receive their promised vacation package.

However, according to the complaint, when the “winners” tried to redeem their prize, they were almost uniformly denied. Many consumers who called the defendants to book their vacations were told they were not eligible because they did not meet previously undisclosed conditions, limitations, and restrictions, including age, income or marital-status requirements, or required attendance at a timeshare presentation. Others were told the promised vacations were no longer available or that they had to pay more to redeem their prize. Some consumers could not reach the defendants to claim their prize, and those who did reach them and asked for their money back were told there were no refunds and they were simply out of luck. The FTC charged the defendants with violating the FTC Act. The State of Florida charged them with violating the Florida Deceptive and Unfair Trade Practices Act.

The defendants in this case are VGC Corporation of America, also doing business as All Dream(s) Vacations, All Dreams Travel, Five Star(s) Vacations, 5 Star(s) Vacations, Total Tours, and Travel & Tours Corp.; All Dream Vacations Corp., also doing business as All Dreams Vacations; Violeta Gonzalez, also known as Violeta Rojas; Cesar A. Gonzalez; and Samir Jose Saer Rodriguez, also known as Samir Saer.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Southern District of Florida. At the request of the FTC and the State of Florida, the court issued a temporary restraining order against the defendants on May 17, 2011, pending a hearing.

Holiday Vacations Marketing Corp.

The defendants in the second case also targeted Spanish-speaking consumers in a similar scam. According to the FTC’s complaint, when consumers called to accept the “prizes,” the defendants’ telemarketers took their credit or debit card numbers, charged their accounts a fee of up to $400, and mailed them a payment invoice, a vacation brochure, and instructions to call 30 days or more before the desired vacation date to make reservations. The defendants sometimes mailed terms and conditions stating that consumers had to make reservations within 18 months of purchase, pay their own air fare, present two forms of ID at the hotel, and be 21 or older.

The complaint also alleges that consumers often could not reach a live operator to schedule vacations, or managed to make reservations but could not reserve as many nights as they were promised. Some consumers learned, after arrival, that they had to attend timeshare presentations and meet income and marital-status requirements to receive free hotel stays. At least one person, who traveled from Texas to Florida, was charged for the hotel because she could not attend a timeshare presentation scheduled for the day after her departure. Consumers who complained or demanded refunds had trouble reaching anyone by phone, and others were promised a refund that was never provided, according to the complaint.

In addition, the defendants allegedly re-charged consumers’ accounts up to $400 without their authorization, and without disclosing that they would be charged a second time. When consumers reported the unauthorized charges to their banks or credit card companies as fraudulent, the defendants used certified mail to send those consumers a new invoice and brochure that was nearly identical to those sent after the initial charge. The defendants then sent the consumers’ banks or credit card companies a copy of the consumers’ signatures from the certified mail receipt and a copy of a false invoice. This led some banks and card companies to refuse consumer requests to cancel or reduce charges to their accounts.

The FTC charged Holiday Vacations Marketing Corp., Happy Life Carribbean Corp., Happy Life Corporation of America Inc., Victor M. Ramirez, and Dario A. Jimenez Lopez, also known as Diego Lopez and Diego Jimenez, with violating the FTC Act.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the District of Maryland. At the FTC’s request, the court issued a temporary restraining order against the defendants on May 16, 2011, pending a hearing.

The FTC would like to thank the State of Florida for its invaluable participation, as well as the Florida Department of Agriculture and Consumer Services, the Better Business Bureau Serving Southeast Florida and the Caribbean, and the Commonwealth of Puerto Rico, Department of Consumer Affairs for their assistance with both of these cases.

For more information about travel plans, read Telemarketing Travel Fraud, or play an online game, Gear Up For A Great Trip, also available as Prepárate Para Un Feliz Viaje.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.

(FTC File No. 1023210, 1123039)