The Federal Trade Commission filed two actions against several companies and individuals engaged in what the agency alleged is a nationwide “Free Vacation” prize scam.
According to the Commission, the defendants used Spanish language radio and TV ads to offer a vacation package supposedly worth thousands of dollars that callers could win if they correctly answered a trivia question; while in fact, “winners” were either unable to collect their prize or paid a fee up to $400.
VGC Corporation of America’s television ads said, “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 Disneyland!” In the background, images of Disneyland included Mickey Mouse and the Magic Castle.
Similar radio ads encouraged consumers to call with the name of a country without the letter “A” in it, the agency said.
According to the complaint, VGC “uniformly” told consumers they had won, but then later notified them they were not eligible, or they had failed to meet previously undisclosed conditions or restrictions, such as age, income, or marital status requirements, or had failed to attend a timeshare presentation.
The company and three individuals were charged with violating the FTC Act, while the Florida Attorney General alleged they violated the state’s unfair and deceptive trade practices law. A U.S. District Court in Florida granted the FTC’s motion to halt the defendants’ business operations and freeze their assets pending further litigation.
In the second suit, the Commission charged Holiday Vacations Marketing Group, Happy Life Corporation of America, Happy Life Carribbean Corp., and two individuals with operating a similar scam from April 2009 to June 2010.
In the defendants’ ads, consumers were instructed to “Dial now and tell me what animal lays eggs and is not a bird, and the whole family wins” a trip to Disney.
Again targeting Spanish-speaking consumers, the defendants asked for a credit or debit card number when consumers called to accept their prizes. Accounts were charged with a fee up to $400, according to the agency, and some consumers were mailed terms and conditions telling them to pay their own airfare.
Consumers who tried to redeem their prize often could not reach an operator, according to the FTC, or were unable to reserve the number of nights they were promised for their trip. Others learned of additional requirements after their arrival at Disney.
The FTC said that one consumer traveled from Texas to Florida and was charged for her hotel stay because she failed to attend a timeshare presentation that was scheduled the day after her departure.
The agency said consumers who tried to complain or get a refund struggled to make contact with the defendants or did not receive promised refunds.
To read the complaint in FTC v. VGC Corporation, click here.
To read the complaint in FTC v. Holiday Vacations Marketing Group, click here.
Why it matters: The Commission said the two actions were filed as part of the agency’s Hispanic Law Enforcement Initiative and its ongoing efforts to combat telemarketing travel fraud. In the complaint against VGC Corporation, the FTC said telemarketers had a script (obtained from a former employee) which directed employees to tell consumers that “this is the winning call!” The script further instructed employees to “Transmit emotion” and “take advantage of the emotion that the client is feeling, use it to your favor!!” with comments such as, “Congratulations to you and your family!” and “Wonderful! Perfect!!”