Is "free cruise" promotion real or a scam?

October 9, 2014 15:42 by Consumer Ed

Dear Consumer Ed:

I am receiving notices in the mail from cruise lines telling me I’ve won a free cruise.  The same company is calling me on the phone and leaving messages.  I’d love to go on a cruise, but I don’t know how to tell whether these deals are legit.

Consumer Ed says: 

You’re right to be suspicious about the free cruise offers.  Almost certainly, the caller wants to sell you something in connection with that purportedly “complimentary” vacation.  There’s a reason someone coined the old adage, “there’s no such thing as a free lunch.”  It may even be that the caller isn’t actually from the cruise line itself, but simply wants to give the impression that s/he is.  You also need to be careful that you’re not setting yourself up to be on the receiving end of high-pressure sales tactics, or worse, falling prey to a scam, such as the following:

  • Your actual cruise may be free, but you might have to go to some lengths to get it.  Usually, such companies require recipients of these “gifts” to attend an extensive sales presentation of some sort before they’ll actually give it to them.  One of the most popular such pitches is for timeshare sales.
  • It’s not clear what part of the trip package is actually “free”:  Your “free” cruise may well not include transportation, lodging, meals, taxes, surcharges, or other items.  Further, if you’re required to pay a deposit up front and you change your plans, it’s unlikely you’ll be able to get a refund of the deposit.
  • If you accept such an offer from a company via the phone, they usually will want to send you confirmation about the cruise/vacation package in the mail.  Meanwhile, they ask you to provide your credit card number so that they can assess a “small service charge” at the time you accept the vacation.  Your account is charged right away, and your cancellation period will already have expired by the time you receive your confirmation packet, if you’re even sent one. Meanwhile, hundreds of dollars of “service fees” will show up on your account before you can cancel your card.


The three examples above are certainly not all-inclusive.  In 2011, the Better Business Bureau received over 1,300 complaints regarding cruise lines and free-cruise scams. So, how do you protect yourself from vacation scams? First of all, the Georgia Fair Business Practices Act (“FBPA”) has specific provisions related to promotional activities in relation to “free” gifts, prizes, or vacations.  The FBPA’s promotions statutes require companies to give advance notice to consumers if they’re required to attend any kind of sales presentation to claim a free vacation/prize. Even if the notice does not fall into the promotion category, other provisions specifically apply to vacation “awards”:

  • The vacation must include all transportation, meals, and lodging, unless the offer or notice clearly and conspicuously discloses that some or all of these items are not included.
  • If a deposit is required to secure a reservation, the offer or notice must clearly and conspicuously disclose that information.
  • You cannot be required to pay any money other than a refundable reservation deposit (i.e., no service, mailing, or handling fees) in order to receive a prize.
  • The offer may not claim that you are a “winner,” have been selected or approved, are part of any special prize group, or are entering an event from which a winner will be selected, if in fact the intent is simply to reach prospective customers, or if the majority of entrants will receive the same prize or opportunity.

In addition, it’s always a good idea to do some research before you give any personal information or credit card number to a company offering free trips/gifts.  Here are some steps you can take:

  • Research the name of the travel agency and any other company listed on the free cruise offer on the internet.  Go to the Better Business Bureau’s website at www.bbb.org to see if there are complaints against that company.
  • Don’t make hasty decisions.  The sales representative on the phone may use high pressure sales tactics and tell you that you have only a short time to accept the free offer or you will lose the opportunity.  S/he may refuse to answer questions about specific dates and any fees, and only give generic, scripted information.  If this happens, you should end the call immediately.
  • Avoid giving out your credit card (or, especially, bank account) information.  If it is truly a free cruise, you shouldn’t have to pay.  If you have to pay, it isn’t free.
  • Read the written notice carefully, including the fine print.  You may miss important information otherwise. Are transportation, meals, and lodging all included? What other additional fees or charges are there? Do you need pay a deposit to make a reservation? If so, is it refundable?  What are the refund and cancellation policies? Are you required to attend a sales presentation of any kind?
  • If you feel you’ve encountered or been a victim of a scam, you can file a complaint with the Governor’s Office of Consumer Protection.  You can also report your concerns to the Federal Trade Commission for their data collection purposes.  Additionally, if you believe you’ve received a fraudulent vacation offer in the mail, you should contact the Postal Inspection Service online, by calling 877-876-2455, or at this address:


Postal Inspection Service
P.O. Box 16489
Atlanta, Georgia 30321-0489


Finally, you mentioned that the company is calling you on the phone and leaving you messages.  If you no longer wish to receive telephone calls from the company, you can put your number on the National Do Not Call Registry. Visit www.donotcall.gov or call 888-382-1222.

 

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"Free" cruise requires hefty fees

December 13, 2011 18:43 by Consumer Ed

Dear Consumer Ed:

I received a mailer from a cruise line stating I had won a trip but just had to pay a small fee, which has turned into a big fee. I would like to get my initial money back and not go any further with actually booking the trip. The document I have states “refunds subject to the state law consumer resides in.”  I live in Georgia.  Am I entitled to a refund?  The company refused to give it to me.

Consumer Ed says: 

It sounds like the mailer you received from the cruise ship is a promotional mailer, which is regulated in Georgia under the Fair Business Practices Act (“FBPA”).  There are certain disclosures that such mailers must make in order to comply with the law.  These include disclosing all additional costs which the participant will be required to pay in order to obtain a “prize” being offered as part of the promotion.  If the mailer you received didn’t contain a clear and conspicuous disclosure informing you of all of the additional costs associated with the trip you had won, the business might be in violation of the law.  Furthermore, if the fee you are being required to pay is anything other than a refundable deposit to the service provider, that could be an additional violation of the law.  If the promotional mailer is in violation of the law, you may be entitled to get your money back.

If you believe the company failed to adequately disclose the additional costs, you should contact the Governor’s Office of Consumer Protection by visiting www.consumer.ga.gov, or by calling 404-651-8600.

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Is money going to sweepstakes scammers?

November 4, 2010 08:33 by Consumer Ed

Dear Consumer Ed:

I’m worried about my 84 year-old aunt.  I was at her house and noticed she had a box of sweepstakes and lottery letters on her kitchen table.  She insists she is not playing the lottery, but I’m concerned that she is sending what little money she has to strangers.  What should I do?

Consumer Ed says:

You’re right to be concerned.  You should try to help your aunt understand the potential danger of participating in these sweepstakes and lotteries.  They are often scams, especially designed to take advantage of older consumers.

With regard to lotteries, you should remember two important things.  First, you have to “pay to play.”  That is, if you didn’t buy a ticket, then you could not have won a prize.  If your aunt received a notice about winnings from a lottery and she doesn’t have a ticket showing that she paid for the opportunity to play, then the award letter is probably a scam. 

Second, there are only a few legal lotteries in which consumers may participate, and all of those are heavily regulated by the government.  In fact, the only entities that can legally operate lotteries in Georgia are the Georgia Lottery Corporation and some charitable organizations.  Your aunt should avoid participating in any lottery that is conducted by any other entity, especially those conducted in other countries.

Sweepstakes are a little different from lotteries. They are a promotional device – often a way of advertising a product or service – through which prizes are awarded to participants by chance.  Unlike lotteries, the consumer is not required to purchase items or pay entry fees or taxes prior to receiving the prize.  With respect to sweepstakes then, your aunt should not be required to “pay to play.”

Although legitimate companies will not require your aunt to pay to enter or to improve her chances of winning, many consumers believe they will have a better chance of winning if they buy a product – and so they do. This can lead to problems. In some instances, consumers who believe that they are sending money to participate in the sweepstakes are really just signing up to receive other sweepstakes offers.   In other cases, there is language hidden in the terms of the sweepstakes offer that will allow the company to automatically debit the consumer’s checking account on a regular basis until the consumer cancels.  Canceling services with these companies can be time-consuming, and it can be extremely difficult to receive a refund once one is requested.

If your aunt is willing, you should write letters to the companies on her behalf, asking to be removed from their mailing lists.  If you find that she has paid money to any of these companies, you should check to see whether the company offered any product or service to your aunt and, if so, whether it was actually provided.  If the company failed to provide the product or service as it was described in the advertisement, then you have grounds to request an immediate refund and to cancel all future billing.

If you believe that your aunt is receiving sweepstakes or lottery solicitations that are deceptive or illegal, then you can take other action.  You can forward copies of these advertisements to your local Post Office, the Federal Trade Commission, and the Georgia Governor’s Office of Consumer Protection.

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