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Consumer Alert - Travel Clubs Charged Under Fair Trading Act

EDMONTON, July 9, 2002 - Two travel club companies jointly face 11 charges, just weeks after a special regulation was added to Alberta's Fair Trading Act to better protect consumers who purchase travel club memberships.

Intravelnet.com and 968362 Alberta Ltd., operating as Snowbird Vacations International and Orca Houseboats respectively, are charged for operating without licences, misleading consumers and refusing to provide refunds when consumers attempted to cancel their contracts.

Alberta Government Services investigated complaints from five consumers alleging that Snowbird Vacations International had initially offered memberships under $200 for wholesale travel services. But when the contracts were presented for signature, consumers were required to sign another contract with Orca Houseboats for houseboat charter agreements ranging from $4,000 to $6,000. Snowbird Vacations International and Orca Houseboats then allegedly refused to honour consumers' 10-day right to cancel their contracts and receive refunds.

Alberta's new Travel Clubs Regulation, which took effect May 17, 2002, applies to any organization that sells memberships to consumers for future access to travel services. In addition to providing 10-day cancellation rights, the regulation requires any travel club intending to deal with Albertans to be licensed, post a security and follow a code of conduct. Further, consumers have one year to cancel a contract if a travel club does not hold the required licence.

The regulation does not apply when the total amount paid to enter a contract, including any ongoing periodic fees, is less than $200 if there is only one adult member in a household, or $400 if there are two or more adult members in a household.

Any other Albertans who have purchased travel club memberships since May 17 and have concerns about their contracts, are invited to contact Alberta Government Services' Consumer Information Centre toll-free at 1-877-427-4088. A travel club tip sheet is also available at this number, or online at www.gov.ab.ca/gs.

When it comes to considering any travel club membership, Albertans are advised to:

• Never sign a contract unless they have read and understood it;
• Take their time - avoid being rushed into a decision;
• Shop around - compare prices offered by other businesses; and
• Check if a travel club is licensed - if a contract must be cancelled, consumers may make a claim against the security if money paid in advance is not refunded.

The Travel Clubs Regulation was established after a consultation with more than 1,000 Albertans and evidence of increasing concern about travel club operations. The number of callers to the department's Consumer Information Centre with questions about travel clubs almost quadrupled in one year, from 125 inquiries in 1999/2000 to 402 in 2000/2001.

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Megan Parker - Alberta Government Services - (780) 415-6051