What is travel fraud?

Travel fraud schemes come in all shapes and sizes. One example involves vacation travel packages in which the consumer pays hundreds of dollars to receive a travel package that includes round-trip air transportation for one person and lodging for two people in a specified location. However, you must purchase a high-priced, round-trip ticket for the second person from the fraudulent travel operation, or you must pay for costly accommodations in less-than-ideal timeshares or resorts. In the end, you may pay more for this vacation package than if you had purchased your own tickets in advance or bought them through an airline or reputable travel agency.

How can I avoid becoming a victim of a travel scam?

First and foremost, use your common sense. Any offer that seems too good to be true is most likely too good to be true. Nobody gives away something for nothing.

Example: If you are told that you have been awarded a prize, but you have not entered a contest, you are being scammed.

Do not be pressured into buying right now. If the offer is legitimate, you will not be expected to make an immediate decision.

Do not be afraid to ask questions. Know exactly what the price covers and what it does not. Find out if there will be any additional charges later. Find out the names of the hotels and airlines that are included in your package and double-check arrangements with them. Ask about cancellation policies and refunds. If the salesperson cannot answer your questions, you do not want the package.

Before you purchase a travel package, ask for detailed written information. Once you receive the information, make sure the written material confirms everything you were told by phone.

Never give your credit card number to unsolicited telephone salespeople, even if they say that they need the number for verification purposes. Once they have your credit card number, all the scam artists have to do is charge your account.

TIP: When in doubt, say no.

Does the airline have to compensate me if it bumps me off a flight because of overbooking?

Overbooking is not illegal, and most airlines overbook their scheduled flights to a certain extent in order to compensate for "no-shows." As a result, passengers are sometimes left behind or "bumped."

When a flight is overbooked, the Department of Transportation requires airlines to ask people who are not in a hurry to give up their seats voluntarily in exchange for compensation. Those passengers bumped against their will are, with a few exceptions, entitled to compensation.

The DOT rules require that:

  • Your original ticket can be used another time or be fully refunded.
  • You get a free seat on the next available flight leaving from any airline. Your original carrier will arrange it.
  • You get immediate cash compensation, based on how long the delay will be from your original planned arrival time.
  • Compensation is equal to twice the cost of a one-way fare to your destination or $400, whichever is less.
  • Compensation is equal to the cost of a one-way fare or $200, whichever is less, if the next available flight arrives within 2 hours of the original flight, if it is a domestic trip, or within 4 hours for international flights.
  • There is no compensation if the alternative flight is scheduled to arrive within an hour of your original flight.
  • You must be at the gate at least 10 minutes before your departure time or you forfeit your reservation and the DOT compensation does not apply.

What is a "vacation timeshare"?

Under a timeshare, you pay a one-time price plus annual maintenance fees, and in turn, you buy the right to use a given vacation property for a certain amount of time each year.

Is a timeshare a good investment?

Not necessarily. Some timeshares require you to decide up to 2 years in advance which week you want to use it. You are often restricted to one location, although some timeshares allow you to trade your week for one at another location. Moreover, sometimes annual fees rise to equal the amount you would spend renting for a week at the facility, so you actually are not saving any money.

If I buy a timeshare, will I have trouble selling it later?

Studies show that there is a very small resale market for timeshares. This is because there are more owners looking to sell than there are people wanting to buy timeshares.

If you are able to sell your timeshare, it is likely that you will lose money on your investment. In most instances, the original price of the timeshare may have included premiums of up to 40 percent to cover sales costs. You will also have to pay a commission to the broker who sells the property for you.

Can I get out of my timeshare contract?

Most states have "cooling-off" laws that allow you to get out of a timeshare contract if you act within a few days after signing the contract. Check the laws of your state and the state of the timeshare location. If there is no such law or if you change your mind after the time has passed, your only recourse may be a formal lawsuit.

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