CONSUMER ALERT

MIKE COX

ATTORNEY GENERAL

The Attorney General provides Consumer Alerts to inform the public of unfair, misleading, or deceptive business practices, and to provide information and guidance on other issues of concern.

TRAVEL CLUB MEMBERSHIPS

BEWARE:  The payment is mandatory;

the vacation is subject to availability.

Have you received a phone call, e-mail, or letter notifying you that you have won a free vacation, expensive car, plasma television, or other wonderful-sounding item that must be claimed in person at a certain hotel or business location?  If yes, read between the lines, and you may also discover that when you arrive to pick up your gift you will be expected to attend a "travel information seminar" or "preview the benefits of membership into a private travel agency."  And when you do, you may find yourself in the middle of an aggressive sales presentation pitching membership to a travel club. 

For substantial up-front membership costs and annual dues, travel clubs claim to provide access to vacation travel opportunities and exclusive accommodations at discounted rates.  Consumers who rush to purchase without first carefully reviewing the purchase contract have been surprised to learn that discounts which at the time of the sales pitch sounded like a guaranteed 50% savings are in fact up to 50%.  They also learn that the vacation accommodations the club provides are subject to availability, even with weeks of advance notice and alternate travel dates provided.  While the contract clearly obligates payment by the purchaser, the company's obligations may not be as certain.

Problems with travel clubs frequently reported by consumers include:

• Inability to realize any savings, particularly if the member does not travel frequently;
• Inability to book travel on dates selected;
• Failure to receive vacation accommodations of the quality expected;
• Failure to receive benefits because the company goes out of business.

Michigan law does offer some protections:

Disclosures required for prize promotions:

Any time a consumer is notified of a prize and must listen to a sales presentation as a condition of receiving the prize, the consumer must be given a written disclosure that:

• fully describes the prize, including its cash value;
• contains all terms and conditions for claiming the prize, including a statement that the consumer is required to listen to a sales presentation; and
• fully describes the product, service, membership, or other items that are to be offered for sale, including the cost to purchase.

Three-day right to cancel contract:

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. 

In addition to knowing your legal rights, remember these tips and precautions:

• Leave high-pressure sales presentations and today-only deals which do not allow time to carefully read the purchase contract and evaluate the offer.
• Read all contracts and documents concerning the purchase completely and carefully, both before signing, and again within the time permitted for contract cancellation.
• Check the complaint history of the travel club company by contacting the Attorney General Consumer Protection Division, Better Business Bureaus, or an accredited travel association within the time permitted for contract cancellation.
• Verify the amount of available discounts by calling hotels or other affiliates of the club within the time permitted for contract cancellation.  Call a travel agent to determine if similar discounts can be obtained without club membership.
• If you elect to cancel, do so in writing within the time provided in the contract or permitted by law.  If your purchase was made by credit card, call and write your credit card issuer and request that a chargeback be issued on your credit card for the purchase amount.
• As always, be wary of any purchase offer that sounds "too good to be true."

If you experience a problem with a travel club, file a complaint with the Attorney General's Consumer Protection Division:

                        Consumer Protection Division

                        P.O. Box 30213

                        Lansing, MI  48909

                        517-373-1140

                        Toll Free:  877-765-8388

                        Fax:  517-241-3771

                        www.michigan.gov/ag (online complaint form)