This month, Club ABC Tours went out of business without any notice and with little support for customers ?even the ones out on the road. Peter reviews what has happened and what travelers can do to protect themselves.
For the past couple of weeks, I have been reading your questions about Club ABC Tours. After 45 years in operation, the New Jersey-based company, owned by Crown Travel Service of Bloomfield,?shut down abruptly on October 1. When it shut down a lot of people were out a lot of money. There were even travelers overseas who, ?midway during their trip, ?found their hotel and flight reservations canceled. The upset is so huge that the New Jersey attorney general has been asked to investigate ABC Tours. So far, 166 travelers filed complaints with the Division of Consumer Affairs
Go to Club ABC Tours? website and you?ll see only this notice:
After almost 45 years of business, it is with deep regret that we must announce that our company has ceased operations.?If you booked a tour and purchased travel insurance, you may contact your insurer to determine claim eligibility. If you paid by credit card, you may contact your credit card company to determine refund eligibility.?On the event that you have booked a cruise, we suggest that you contact your cruise line directly and inquire as to the status of your trip.
Not very comforting, is it? What happens if your travel provider suddenly goes under, without any warning? ?It all goes back to how you book your travel.
1. Always pay for your travel with a credit card.
I do not say this for the best interest of the credit card companies, but for your best interest. You might not realize that Federal Credit Law that gives you rights. As a consumer, you are protected when you pay for goods or a service with your credit card, especially when it comes to high-ticket items and travel.
Remember, there is one caveat about paying with a credit card. A lot of tour operators and travel providers, will try to insist you make a huge and substantial deposit on your trip more than 60 days out, but the law doesn?t protect you outside of 60 days.
Here?s how The Federal Credit Law works: if you buy anything, whether it?s a television set or a trip to Bermuda, and you don?t get the TV set, or it never gets delivered, or the TV set breaks, or the cruise never happens, then the law kicks in only within 60 days of intended use. Your credit card company becomes the creditor against the travel provider, and issues you a credit on your account.
2. Consider travel insurance, wisely
Right now there are a lot of angry, angry travelers out there, but something could have been done. In addition to paying with a credit card, when you have a relatively large investment in a travel product?whether it is a hotel, a resort, an airline ticket, or a cruise?you want to insure that investment with a bare minimum of trip cancellation or interruption insurance. The insurance premium might be 11 or 12 percent, but when it?s a high-ticket item you need some protection of your out-of-pocket costs. More comprehensive coverage will also include lost or delayed baggage coverage (save those receipts for any out-of-pocket expenses), 24/7 support and other protections, but the basic trip cancellation or interruption is
3. Do not purchase that insurance directly through your travel provider
Trip Mate, the travel insurance provider for ABC, has more than 200 travelers who claim to have paid for policies through Club ABC that were never purchased.??Contact providers directly, whether it?s Trip Mate,?Travel Guard and Allianz Travel Insurance (formerly Access America for independent insurance. Talk to an agent about all potential scenarios and get a side-by-side comparison of what the policies do?and don?t?include. Online brokers such as ?Insuremytrip and Squaremouth have good comparison charts.
4. Protect your payment
Many travel providers will want the entire payment 6 months in advance. It a recipe for disaster unless, a company can prove to you that they are putting that money into an independent, third-party, escrow account that cannot be released until the day the trip starts. And those accounts do exist because travel providers want their credibility protected just as much as you want your money protected. If they can?t promise that and prove it in writing, don?t you do it.
Club ABC Tours is a textbook case, reminding travelers what you need to do before you ever take a trip. You want to pay with a credit card within 60 days of your intended departure, purchase travel insurance from a third party, or make sure that your travel provider puts your money into a third-party, protected escrow account that can?t be touched until you actually leave the harbor, or get on the plane, or check into the hotel.
For more advice on how to protect yourself, check out:
By Peter Greenberg for Peter Greenberg Worldwide
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