December 6, 2002

Genene Morris (973)504-6327


New Jersey Seeks to Stop Unlawful Practices of Companies
That Allegedly Cheated Consumers With Promises of Luxury Vacations

NEWARK—Attorney General David Samson and Consumer Affairs Director Reni Erdos today announced the filing of a lawsuit against several New Jersey companies and their principals for allegedly luring consumers with false promises of luxurious vacations, accepting payments for services they knew they could not deliver and then refusing to give refunds to dissatisfied consumers when they complained.

The complaint names eight companies and individuals as defendants, alleging that consumers were defrauded out of more than $750,000 paid for vacation travel accommodations and services. After receiving payment for their services, the complaint alleges that the defendants ceased operations and ran off with consumers’ money without delivering the services they aggressively peddled to consumers.

The nine-count complaint names:

In addition, the suit also names Conrad Credit Corporation and Conrad Acceptance Corporation for allegedly harassing and threatening consumers in an attempt to have them pay for the services they did not receive.

The State’s complaint alleges that the travel companies used sales promotions, glossy brochures, and telemarketers to entice consumers into buying the services they were purportedly offering.

However, the complaints allege, when the time came to deliver on their promises, they failed to do so, leaving consumers out of their money and with little recourse.

“When a company takes money from a consumer in exchange for a product or service, it has a legal obligation to live up to its end of the agreement and deliver on its promises regardless of what the company is selling,” Governor James E. McGreevey said.

“The defendants named in the State’s suit played on vacationers’ desires and dashed those desires through a pattern of deception and misrepresentation,” Attorney General Samson said.

The complaint alleges, the defendants frequently called consumers to tell them they won a free dinner to a restaurant and/or a three-day trip to an unspecified location if the consumers visited their offices and listened to a sales presentation about their travel packages and services. When consumers responded, they did not receive any prize, but were subjected to the defendants’ high-pressure sales presentations that were geared toward convincing consumers to purchase pre-paid weeks of vacation.

During sales presentations, the complaint alleges, the defendants:

The complaint also alleges that the defendants misrepresented to consumers that travel accommodations would be available anywhere in the world and of certain type and quality and, in some cases, handicapped accessible. However, when consumers did sign up and attempted to take advantage of the services for which they paid, they allegedly encountered numerous problems including:

“The travel companies were undercapitalized and depended upon money received from later sales to fulfill the vacations that earlier consumers had already paid,” Erdos said. “The defendants knew or should have known that they had insufficient funds to fulfill the travel packages they were selling. Nonetheless, they failed to disclose this fact to consumers, who were prepaying the contracts with money they thought would go to pay for their future vacations”.

“None of the travel companies are currently selling new travel packages and as such, have and will continue -more- to have insufficient funds to fulfill the existing vacation contracts for which they have received payment,” Erdos said.

The State’s case seeks to have a receiver appointed and to have the defendants pay penalties to the State, costs and fees and restitution to affected consumers.

Deputy Attorney General Sharon A. McCloskey of the Division of Law is handling this matter for the State.

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Posted December 2002