Texas targets “unethical” Royal Palms Travel club

They promised Hans Slatosch the world. Literally.

In a sales presentation he attended a year ago, Dallas-based Royal Palms Travel offered him deep discounts on cruises and other travel products. All he had to do was pony up a $5,593 membership. He did.

But something about the transaction made Slatosch uncomfortable. The sales staff had pressured him to make a decision before he left, and they wouldn’t let him keep the material they’d distributed, he says.

Once we got home I researched Royal Palm Travel on the Internet and found very unfavorable information about it. The company was described as a fraud, a scam and accused of unethical business practices.

Now we feel uncomfortable doing business with the company, and are afraid we are victims of deceit.

Slatosch tried to fix his mistake.

The following day, I spoke to Arnulfo, the membership representative, and asked him to cancel our application. He informed me that since we signed the contract, it is binding. I did send a registered letter to Royal Palm Travel within three days to request the cancellation of our membership, but to no avail.

I’ve handled countless claims like this one, so when Slatosch came to me for help, I knew Royal Palms Travel would not give me the time of day. Only the long arm of the law — either by authorities or in court — could help him find justice. So that’s what I recommended.

Slatosch filed a complaint with the Texas Attorney General. Yesterday, he got some good news: Texas had cracked down on Royal Palms Travel.

According to court documents filed by the state, Royal Palms Travel Inc. and All Inclusive Excursions falsely promised steep discounts as part of travel club memberships they offered through a “shell” company, Sealand Travel Club. The memberships actually had little or no value.

In response to the state’s enforcement action, a Dallas County District Court today issued a temporary restraining order against the defendants that prevents them from continuing to violate the law.

That’s good news for Slatosch and any future victims of this travel club.

I find it amazing that people still fall for this nonsense. A travel club that offers “discounts” in exchange for a huge membership fee? Take-it-or-leave-it sales tactics? Come on. I thought the scam artists perpetrating these predatory businesses had all moved on to Internet gambling or bogus job placement services.

Needless to say, if you ever find yourself in a presentation in which someone offers you discounts for belonging to a travel club, run, don’t walk. I’m sure Slatosch wishes he had.

(Photo: caruba/Flickr Creative Commons)

  • Phil

    Can’t feel sorry for Slatosch, don’t know why anyone would waste their time going to any of these presentations, these presentations have been around for years, and anyone that does not realize it is a fraud deserves to be taken. This just goes to show how stupid the general public can be, nothing is free and when one has to pay to get something at a discount it should be obvious.

  • http://http/aol.com barbie45

    I have to admit my husband and I have gone on a few of these presentations. We had no intentions of buying. we only accepted ones which offered a dinner or a show which was a good deal for an hour and a half of our time. I would play the bad guy and my husband the good guy. W e never got conned into anything as did many people we know. As for internet gaming if you can afford it the odds are great. Also if you can control your spending.

  • Roberto

    “Needless to say, if you ever find yourself in a presentation in which someone offers you discounts for belonging to a travel club, run, don’t walk. ”

    You mean like AAA?

    The bigger red flag is the high pressure, now or never sales tactics. If you aren’t allowed to take the materials home and think it over, then the answer is ALWAYS no.

  • J C

    I also don’t feel sorry for Slatosch and I’m not amazed that people still fall for these “deals”. There are plenty of naive people out there believing that pie in the sky — Wow this is to good to be true, I’ve got to get in on this, only to find out later that was to good to be true.

    There’s always going to be Sheep and there’s always going to be Con artists to shear them. You can warn people till your blue in the face but people like Slatosch will always flock to the “DEAL”

  • J C

    @ barbie45 – Thats the way to do it, if you don’t mind the aggravation of the hard sell. My wife and I avoid them but I like your technique.

  • Carver

    @JC

    Do you really have no sypathy for someone who just got fleeced out of 5 grand? Its easy to think, it couldn’t happen to me. But the truth is that it could happen to anyone, no matter how smart or sophisticated. It’s that sense of self assuredness that allows for the best cons. Think Bernie Madoff.

  • Carver

    @Chris

    You’re 100 percent right on. Any legit deal doesn’t require hard sell tactics, nor will the salespeople prevent you from taking a copy of the promotion materials. Those are sure fire red flags.

  • Thalassa

    Chris, you’re so right about this. And Direct Buy – the appliance/furniture sales place – is the same way. You’re allowed to go visit once, then you’re hit with the $5K+ sales pitch, and you’re told you have to decide now, or you never get another opportunity.

    I’m glad the AG is going after scams like this!

  • Natalie

    Is it five grand or five dollars? I read $5.593 (that’s a decimal, not a comma).

  • Nobody

    Salesman Roma of Glengarry Glen Ross to weak customer LingK on the 3 day to cancel a contract:

    Lingk: But we have to before Monday. To get our money back.

    Roma: Three business days. They mean three business days.

    Lingk: Wednesday, Thursday, Friday.

    Roma: I don’t understand.

    Lingk: That’s what they are. Three business if I wait till Monday, my time limit runs out.

    Roma: You don’t count Saturday.

    Lingk: I’m not.

    Roma: No, I’m saying you don’t include Saturday in your three days. It’s not a business day.

    Lingk: But I’m not counting it. (Pause.) Wednesday. Thursday. Friday. So it would have elapsed.

    Roma: What would have elapsed?

    Filled in the contest card
    Won the SUV
    Showed up to collect
    Left with an over-priced contract on something he didn’t need

    RIP
    Nobody was faster

  • http://http/aol.com barbie45

    Carver, You are a real human being. That is a compliment. Now that I recall some pretty smart people who were skinned by Bernie. Also some pretty prominent organizations. Living inSouth Florida every scammer in the world graviates here. Guess I was not among the elite to be scammed.by Bernie.

  • Arizona Road Warrior

    It wasn’t stated in the article, did Mr. Slatosch paid cash? If he paid with his credit card, he could have contacted his credit card company the following morning. If he paid with a check, he could have contacted his bank to stop payment on the check. If he paid cash, that is a red flag.

    More importantly, there were red flags like the high pressure, now or never sales tactics, can’t take the materials with you, can’t think about it and etc. which should automatically make your answer ‘No’.

  • J C

    @Carver

    Your right, in that a Bernie Madoff type con, anyone can be taken at that level. I don’t like to see anyone lose the kind of money that Slatosch lost and It’s a hard lesson.

    I do wish the guy could get his money back. I don’t wish him the loss, but these – come have a free dinner and listen to this great deal I have for you-
    have been around for so long that you should have an idea of what your getting into.

    Barbie45 does.
    Phil was correct. These presentations have been around for years.

    It’s a shame what happened to this person. These con artists should be whipped. He was naive and he paid the price.

    It is truly a shame

  • LeeAnne

    @Christopher – never underestimate the gullibility of people who’ve never heard the phrase “if it looks too good to be true – it is”.

    I do volunteer work for victims of internet fraud. All those ridiculous emails you get from Nigerian “diplomats” telling you that they have 12 million dollars waiting in an abandoned bank account if you will simply send them a few thousand dollars in “fees”? Why do you think you keep getting them? Because people BELIEVE THEM!

    Every week I provide counsel to some grandmother who sent her entire nest egg to a scumbag scammer who convinced her that he was the daughter of a Nigerian prince who needed her help to sneak millions out of his country, and would split the money with her…so she blind-wired him every penny she owned, and he :::SURPRISE!::: disappeared. Or an out-of-work single mother who took a “job” (which she learned about via a spam email) processing “payments” from “customers” which was, in fact, nothing more than cashing fraudulent checks for thousands of dollars and blind-wiring the money to the scammers in Nigeria, before her bank bounces the checks and she gets stuck owing the whole amount to her bank.

    So this fraud travel club doesn’t surprise me one bit. What DOES surprise me is that action is actually being taken to stop it! Yay for the Texas Attorney General.

    As for going to those sales presentations JUST to get the “free” dinner/show, personally I find that to be just as fraudulent as the scam artists. If you go to one of those knowing full well you have no interest in what they’re selling, and are wasting their time (and play-acting to boot!) to get them to give you something of value, that’s immoral and unethical. It doesn’t matter if what they are trying to sell you is legitimate or not – they are giving those dinners/shows away with the expectation that you are a legitimate prospective customer. If you aren’t, then you are lying and defrauding them. Is it legal to do this? Yes – you can always lie and say there was a slight chance (however infinitesimal) that you might have purchased. But is it right? No. My personal values would not allow me to take something of value from someone based on a lie. But hey, you’re the one who has to live with yourself.

  • Carver

    @JC

    Yes, he was naive. That is truly unfortunate. Alas, since these scams remain, that strongly suggests that people are falling for them all the time. Personally, I just stay clear of all of it.

  • Arizona Road Warrior

    @ Carver – “But the truth is that it could happen to anyone, no matter how smart or sophisticated. It’s that sense of self assuredness that allows for the best cons. Think Bernie Madoff.
    - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - –

    You are right that it can happen to anyone, no matter how smart or sophisticated since a con plays to a person’s greed.

    In regards to Bernie Madoff, his con was successful because it was ‘government approved.’ His company was regulated by the government (SEC) and quasi –government (NASD) thus giving the illusion that he was legit since the government was regulating and monitoring his company via on-site compliance reviews, monthly and quarterly reports and etc. There were several complaints filed with the SEC about that were totally ignored by the SEC with the first complaint being filed with SEC back on 1999. It was the failure of the government that allowed Bernie Madoff to run his ponzi scheme.

  • LeeAnne

    @Carver – staying completely clear of these types of situations is definitely the way to go, IF you have no intention of buying, and especially if you know going in that it’s a scam.

    But I think it’s important to note that you can’t just assume that any company that is giving away dinners/shows is a scam.

    The reality is that there ARE valid companies selling things of value that use “giveaways” to entice people to view their products. For example, I know lots of people who’ve been very happy with their timeshare purchases. (Timeshares don’t appeal to me, but I they can work for certain people in certain situations.) So you really can’t use “giveing away a free dinner” as a red flag that whatever they’re selling is a scam. However, you CAN use “must buy it now, can’t take materials home with you” as a pretty solid red flag. I would never purchase ANYTHING that I wasn’t allowed an appropriate amount of time to review – and any sales situation in which you must decide RIGHT THEN, and can’t take any materials with you to evaluate, is almost assuredly a scam of some sort.

    So if you know going in that it’s a scam, or you have no intention of buying, then your approach is the right one: avoid it altogether. Don’t lower yourself to the level of the scam artists by taking something of value to which you aren’t entitled. Two wrongs don’t make a right. Scamming from scam artists still makes you a scammer.

    I do have compassion for victims of scams. I’ve talked to too many of them, and seen what it’s done to them, not to have compassion. But I still want to strangle them sometimes just for being so gullible. But there are lots of people who are simply uneducated about how business dealings work, and are just too trusting. I see this especially in older people who grew up in small towns where everyone knew everyone. You can’t be a successful scam artist if you personally know all your potential victims! People like this often have just never encountered unscrupulous strangers who will do whatever it takes to part their victims from their money, so it’s an alien concept to them. They grew up in an environment in which it was safe to trust. It’s heartbreaking to see them face the reality that they’ve been defrauded by some slick con artist who seemed like “such a nice young fellow”.

    The best, and often ONLY, recourse against scams and frauds is education – getting the word out to the public about what to watch out for. Which is exactly what Christopher is doing with this article.

  • Carver

    @LeeAnne

    I’d agree with much of what you said. I’d nitpick a few points.

    1. I don’t see anything wrong with attending the dinner if you have no intention of purchasing. You’re not scamming anyone. They said upfront, no obligation. In fact, you can even tell them that you’re not buying and they’re still happy to have you attend and take the free items.

    2. My larger point though is that although people may be satisfied with their purchases, a timeshare purchased from the original developer is almost universally a terrible deal. That’s why they have to either you with free crap to attend the seminars.

    Now, I’ve seen some nice timeshares on the resale market which are great deals.

  • http://http/aol.com barbie45

    You can have a doctate, be a member of Mensa, live in a small town or a big city andprey to a scammer.Evil people are in every institution of life and in every country. . No amount of education can prevent you from being scammed. We are all mortals .

  • LeeAnne

    @Carver – Okay, I can see how it might be viewed like that. I personally wouldn’t be comfortable with it, because I would feel like I was being deceptive. Generally you can’t walk in there and say “Give me the free dinner, but I will NOT be buying what you’re selling no matter what you say. I just want the freebie.” Most of them would show you the door. What they are giving you costs them money, and they are giving it with the expectation that you are an actual potential customer. If you are not a potential customer, then IMO you shouldn’t take it. It’s true that there’s no obligation to buy – but there is an implied obligation for there to be the POTENTIAL that you’d buy. That’s why they often insist that both spouses be there – and why they don’t just hand these free dinners to homeless people on the streets.

    If you can walk in and tell them that you want the giveaway but have zero intention of buying, and they will still give it to you, that’s a different story. Hey, knock yourself out with that! No deception, no scam. I’m fine with that. But if you have to go in and lie — actually SAY that there’s a chance you might buy, and even PLAY-ACT (good cop/bad cop – wow), then that’s deceptive. That’s LYING. That’s saying something that isn’t true, and obtaining something of value under false pretenses – which is, indisputably, fraud. There is simply no way around that.

    But like I said earlier, everyone’s gotta make their own personal moral choices. I take a pretty hard line against obtaining things of value under false pretenses, mainly because of my volunteer work with fraud victims.

    I once spent a weekend with my kids at a resort-style campground for free. It was a time-share type situation where you could stay at that campground, or any of their campgrounds around the country for two weeks a year. We were huge campers back when our kids were small, and it was something we were seriously considering. The financials actually worked out pretty well, provided we used it every year for a certain number of years – and we were camping often enough back then that we would have. We came pretty close to buying, but the numbers just weren’t QUITE there. But they didn’t insist we make a decision right then, we brought information home with us, and after adding it all up we decided against it. I felt no remorse for taking that freebie (which would would have cost a couple hundred dollars if we weren’t on the “freebie” thing). But if I knew I had no intention of buying, my personal ethics would not have allowed me to take advantage of it.

  • http://http/aol.com barbie45

    Carver, you are correct. They do state you are under no obligation to buy. If they were such a great investment how come so many are on the market for less than was paidfor them.Cosmetic companies lure me with all kinds of freebies to go to their counter, I usually go with no intention of buying and land up with at least a hundred dollars worth of products. Oh well a hundred dollars is far less than the cost of a time – share.

  • LeeAnne

    barbie45, you are 100% wrong that education can’t prevent people from getting scammed. In fact, education is often the ONLY thing that will prevent people from getting scammed!

    Do you work in scam prevention, like I do? Where did you obtain your information that education has no impact on scam prevention? Do you have some special knowledge about scam prevention/education to back up the claim that education has no impact?

    Those of us who actually WORK in scam education and prevention, and actually have some basis of knowledge about it, can show you reams of data validating that educating the public about scams can and DOES dramatically reduce the number of victims who fall prey to it. That’s what many of us do: we devote countless hours working to educate the public about the scams that are out there, how to recognize them, and how to avoid getting trapped. And it WORKS.

    Someone who is desperate for a job, and gets approached with what seems like an easy, lucrative and legitimate way to bring in money to feed their family, will often jump at the chance. But if they’ve HEARD of those kinds of job scams before, the moment they see the red flags that we’ve EDUCATED them about, they know to run away. How did they know to run? How did the recognize the red flags? EDUCATION. Getting the word out. Spreading the knowledge.

    I resent your implication that the work we do to educate the public about scams has no impact. Just for the record, it’s a good idea to actually have some basic knowledge about a topic before you post something about it.

  • Kevin M

    Lee Anne,

    To be fair to Barbie, I think what she’s saying is that it’s possible for even a very educated person to be a victim of a scam. Education can help you spot a scam, of course, but it can’t “prevent” it in the sense that a vaccine prevents a disease.

    As for whether or not your ethics would let you take a free meal for one of these presentations, I’d suggest you simply tell the person up front “I’m really not interested in X” (whatever X is, be it a timeshare or a discount club. If he says “That’s okay, we’d love the chance to talk with you and show you our stuff,” then you’re free and clear ethically. I don’t think you have to say “There’s no way in hell I’d ever buy this”. But for your own financial sake, make sure you stick to your guns.

    That all said, unlike Barbie, I don’t think an hour and a half of my time is adequately compensated by a free dinner. Here’s what I figure: professionally, my time bills out at about $100/ hour. I consider my free time, my personal life, far more important than my work time, so for an hour and a half of my time, it would have to be a very, very expensive dinner to compensate. If my partner were included, his time would be just as valuable. For people who don’t value their time highly, however, it could conceivably be worth it to suffer through one of these things.

  • Carver

    @LeeAnne

    I think that Barbie meant that general education doesn’t necessarily help, i.e. both highly educated people as well as less educatied folks get scammed. I don’t think she meant that specific education about scams is useless. But I’m sure she can explain if she wants

    As far as ethics goes, I’ve done exactly what you suggested. I was at the Planet Hollywood in Vegas last year. They wanted me to attend a real estate investment opportunity. I told them that I had absolutely no intention of purchasing a timeshare and that I was way too good at math for that crap. They told me that was fine that I had no intention of buying; that they just wanted the opportunity to make the presentation to me and to change my mind. I still declined.

    But the reality is that even though you have no intention of buying, the salespeople are usually better than you and many will ultimately buy. That’s why the salespeople are happy to give away the trinkets because ultimately if you don’t show up, they have zero opportunity to change your mind.

    Now, it’s a different story if you can’t buy. But as long as you possess the ability to buy, the salespeople are happy to have you come to the seminar even if they have to give away a few more trinkets.

  • http://http/aol.com barbie45

    Firstly many solicitations are mailed to perspective buyers based on lists which provide information on your ability to purchase set property etc. As a retired person I recieve many solicitations for financial seminars with free dinner included. I decline believing that if it were such a great financial investment I would not have to be offered a free dinner. Secondly many of these time sharing offers occur at tourist areas such as Las Vegas where you are approached at the hotel you are at. Mostly fairly upscale ones. If the incentive is a really good show or restaurant why not. It is a great escape from those tables and slots. You do have to be discriminating. We only accepted ones that offered at least a hundred dollars per .couple. or a great show or dinner.We were always upfront about our intentions to no avail Thus good guy. Only one beautiful offering when we told them the truth just gave us the money and let us go.As to specific education about scams great idea. I just wonder how competent and trained the volunteers were. Did they have legal expertise? What were the the organizations involved?

  • sue

    well, just to chime in here, I really do think that being a discriminating consumer is a big factor in avoiding scams. It may not have to do with educational degrees, but truly smart people do not get scammed – Bernie Madoff, as pointed out elsewhere here, was, which is not common, backed by the government agencies who should have been more vigilant. Too good to be true is a red flag for any thinking person. I have sympathy that this gentleman got taken, and I think that he should be able to get his money back if he comes to his senses in a few hours, but if he doesn’t, I would hope it was a lesson learned. I found out once that some casual friends of mine had not one, not two, but THREE time shares….all bought under pressure at one of these events. They were trying to convince themselves that they had made a good deal, but after spending a week at their place in Orlando, I was even more convinced that time shares, even as a concept, are a bad idea. Staying in a condo in the far reaches of a touristy resort town is not my idea of dream getaway ever. Locking into it as a yearly commitment would be insane.

  • Charles

    There often is a desire to shift some of the blame onto the victims in these cases. I see that here in comments like “truly smart people do not get scammed”. My father was a well educated professional who would have never bought into any of these types of scams. Then one day he had a stroke. After that he was easy prey for lots of scammers. Luckily he avoided the vacation clubs and the timeshares, but his house was loaded with the “no money down” and other get rich quick scheme materials. Scammers love the elderly because they know no amount of education or intelligence will matter if you develop many possible problems that can impact your cognitive abilities. So, let’s keep the blame were it belongs: on the scammers and their sleazy operations.

  • http://www.texas-spa-finder.com/ Cheryl

    I was a travel agent in Dallas for many years. It is good to hear when scam artists like this one get shut down. No one should ever pay to get travel discounts. A good travel agent will find you best deals out there.

  • Tightwad

    I make decisions on the facts,information,and if the figures work for me
    I will say or no! that’s how most intelligent people make decisions. They should of checked out the deal before they went! Look at Madoff and his ponce! Even the best of the best didn’t know!

  • naoma

    Have gone on them years ago — best thing to do is say “My attorney must look over anything before I sign it.  SORRY.  I just can’t commit.”  You will be “off the hook” and maybe even get your FREE gift.  I told some friends going to Mexico, never get involved in these scams.  They did.  Had to pay over $1,000 for something worthless, but they just would not listen to ADVICE.