Hector and Sonia signed up to win a "free trip" at a local fair. A short time later, they received a phone call saying they had won the trip. To claim it, they had to attend a presentation about a travel club. The salesman said the club would let them stay at nice resorts year after year at very little cost, after they paid the initial membership fee. After a long, high-pressure sales talk, they agreed to join and wrote a check for $2,500. They quickly regretted it. Their free trip was a weekend stay at a run-down hotel in Las Vegas . They tried to use their membership to arrange a stay in Mexico , but the club never had availability there. A few months later, the club went out of business, taking all their money with it.
"Free trip" offers are one of the most common consumer scams. The free trip is usually just a bait to get consumers to buy memberships in expensive timeshares or travel clubs or the trip isn't really free at all - you have to pay a lot of fees and extra costs.
If you receive a phone call or postcard saying you've won a vacation, beware. You'll probably have to attend a sales presentation or tour a campground or timeshare facility to receive your free trip. The salespeople will use high-pressure sales tactics to get you to purchase a membership or timeshare.
You may also receive offers from "card mill" companies. They tell consumers that the cards will help them gain access to free or reduced travel.
Many consumers who sign contracts at these presentations later regret their decision. They find out too late that the club is more expensive than they thought because of added fees, dues and costs. Some consumers can't get the dates or locations they requested. Others find the accommodations to be of poor quality. Worst of all, some of these companies go out of business, taking all their customers' pre-paid membership money with them.
Be skeptical of "free trip" offers. Go to a sales presentation only if you are interested in what the company is selling, and:
- Never make a decision on the spot. Insist on taking the contract home to study. If the business won't allow this, leave.
- Understand all the costs. What is and isn't included? Are there extra fees for maintenance, processing, dues, peak season, upgrades, hotels, airlines, port taxes, and meals?
- Know your cancellation rights. Under Michigan law, if a consumer is offered a prize or merchandise valued at more than $25 in exchange for attending a sales promotion for goods, services, or memberships - such as a travel club membership - that have a value of $500 or more, the consumer must be given written notice that they have three business days after signing to cancel the purchase agreement or contract. However, using your right to cancel isn't always easy, so don't sign a contract unless you're sure about your decision.
- Always think twice before paying a lot of money in advance for a future benefit. What if you invest thousands of dollars and the travel club goes out of business? It's happened to many Michigan seniors.
As a general rule, research any travel service to make sure the company is established and reliable, before paying any costs or signing documents.
Incredible Prices That Aren't
A different kind of travel scam offers you an "unbelievable" price on a vacation. To take advantage of the offer, you have to give your credit card number to hold a reservation. Later, you find out that in order to take the vacation you have to pay a lot more for all sorts of fees, upgrades, hotel taxes and service charges. In fact, the whole package becomes so expensive that you don't want to even take the trip. If you do, the "deluxe" accommodations turn out to be a pretty ordinary motel.
Before you agree to pay any money for a bargain travel package, ask to have written material that describes all the terms and conditions sent to you. If they won't send it, turn it down.