October 09, 2014

Is "free cruise" promotion real or a scam?

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 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 Georgia Attorney General'’s Consumer Protection Division. 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 the National Do Not Call Registry online or call 888-382-1222.

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