A discount travel club and its operators were accused Monday of getting credit card numbers from potential customers through a telephone sales pitch and then charging the victims’ accounts for unordered memberships.
According to a Los Angeles Superior Court suit filed by the state attorney general’s Consumer Law Section, the operators would tell consumers their credit card number was needed to validate data and that it would not be used until the owner accepted the program.
In fact, the company immediately processed the credit card data, charging the consumer one or more times for the full membership fee of $149, Atty. Gen. John Van de Kamp said.
The suit also alleges that operators, working out of telephone sales rooms in Los Angeles County, misrepresented tax deductibility of membership fees and falsely guaranteed that consumers would save at least the amount of the membership fee on their first vacation.
Named as defendants in the suit were Club California, doing business as Travel Goods Inc.; Market Force International, E.J.K. Travel Inc. and Edward J. Kane, Bernd Drisang and William Visilios.
The suit also alleges that Kane and Drisang engaged in similar activities on behalf of Sunsets Unlimited Travel Club, a Utah-based company, which since has filed for bankruptcy.
The suit asks the court for orders prohibiting any future such operations and seeks $200,000 in civil penalties.
Senior Assistant Atty. Gen. Herschel T. Elkins, who is handling the case, said he does not know how many people were hurt by the scam, but estimated that bank losses would hit “at least $1 million.”
“It was the banks that really got caught with this one,” Elkins said. “The customers (credit card holders) squawked to the bank (when they learned they had been charged improperly) and the banks ate the losses.”
The defendant companies are all out of business now, Elkins said. They had been doing business in Santa Monica and the San Fernando Valley “but they are gone now.”
He said the state filed on them “because we want to pursue them and see that it doesn’t happen again.”
The Times was unable to contact any of the defendants for comment.