Victims of unlicensed travel insurance strike back in class action suit

Looks as if the unlicensed insurance scandal — that’s right, the one that got me sued for defamation earlier this year — isn’t over yet.

As I reported earlier this week, Florida appeared to conclude its investigation with a surprise consent order against Revelex, an online booking company.

But now Revelex, as well as several individuals and travel agencies who are alleged to have been involved in the sale of these unlicensed insurance products are on the receiving end of a class action lawsuit (PDF) filed yesterday in Los Angeles Superior Court (case number BC447277).

The list of defendants is long, but it includes some names that will be familiar to readers of this site, including Prime Travel Protection, Smart Travel Group and Vacation Superstore Network, as well as their principals.

The case, which has been filed by Edwin Stewart Trebbe and seeks class action status, alleges certain companies named in his suit knowingly sold a “phony travel insurance policy”. Trebbe, a California resident, bought a Prime Travel Protection policy and claims that he suffered a loss covered under the terms of the plan “and has made a claim for benefits thereunder which has not been paid in full,” according to the complaint. Others are alleged to have been negligent in selling what they should have known was a phony product, the suit also says.
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Palm Coast Travel sues a customer — and me

Here we go again.

Last March, I reported that the Florida regulators had warned three travel agencies that sold insurance policies offered by bankrupt Prime Travel Protection Services of Arvada, Colo., that its activities may have run afoul of state insurance statues.

I quoted Nina Banister, a spokeswoman for Florida’s Department of Financial Services, as saying the state had ordered the agencies to “stop transacting business” and that “they’re on notice that further activity is pending [by the state].”

Soon after that, Florida issued a press release stating, “As a result of ongoing investigations into complaints about the sale of unauthorized travel insurance in Florida, Chief Financial Officer Alex Sink has notified three travel agencies that she intends to order them to stop selling insurance.”

The legal notice to one of the agencies, Palm Coast Travel, alleges that the company “directly or indirectly acted as agent for or otherwise represented or aided one or more unauthorized insurers…” The matter is still pending.

Now Palm Coast Travel has sued one of its customers, Peter Lay, and me, alleging among other things that I defamed the company when I reported the story. Here’s the full text of the complaint (PDF).
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Colorado issues cease and desist order against Prime Travel Protection

Colorado has issued a cease and desist order (PDF) again Prime Travel Protection, the bankrupt travel insurance company based in Arvada, Colo.

The move caps an lengthy investigation by the state and comes on the heels of a similar action by Florida.

The order, signed by Colorado’s insurance commissioner, Marcy Morrison, is likely to put more pressure on the travel agents who have sold Prime Travel Protection policies and other insurance-like products offered by companies owned by Prime Travel Protection’s president, Jerry Watson. It is also likely to give some momentum to Florida investigators, who are said to be pursuing a criminal investigation related to Prime Travel Protection.

Here’s a summary of the order:

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This is a developing story. Look for an update soon.

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Fake travel insurance? 6 questions to ask before buying a policy

George Fredrickson never suspected the travel insurance he bought for his transatlantic cruise last year was fake.

When he paid nearly $8,000 for a Christmastime sailing on the MSC Orchestra through Sarasota, Fla.-based Legendary Journeys, an agent also sold him a $432 policy from a company called Traveler Protection Services. It would reimburse him if he had to cancel his vacation, he was promised.

But after Fredrickson’s wife needed spinal fusion surgery late last year and her doctor advised her to stay home, he learned the truth: Not only was his policy an unlicensed and illegal insurance product, but within weeks of filing a claim, Traveler Protection Services and several related companies had gone out of business. His vacation appeared to be lost.

To describe Fredrickson as upset would probably be an understatement. He’s filed a formal complaint with the state of Florida. He’s also contacted an attorney and hopes to start a class-action lawsuit against the travel agency and insurance company. “I think both of them should be held liable,” says the Davenport, Fla., retiree.

There are no statistics on the number of phony insurance policies sold to travelers. But in the last month, since the apparent bankruptcy of Arvada, Colo.-based Traveler Protection Services, Prime Travel Protection and a related company called Universal Assurance Group, there’s been a dramatic uptick in the number of insurance-related complaints I’ve received. At least two states — Florida and Colorado — are investigating the companies, as well as a network of hundreds of travel agents who sold the policies.

Earlier this month, Florida warned three travel agencies, including Legendary Journeys, that Prime Travel Protection’s policies may violate state law. And the plot thickened just last week, when it was reported that some of the agencies had a track record of selling these questionable insurance products.

Legendary Journeys insists it didn’t know the insurance it sold Fredrickson was unlicensed and says when it found out, it stopped offering it. “As far as we were told by them, [they were] licensed to sell travel in Florida and all 50 states,” says Stew Carrier, a customer service specialist and group tour coordinator. “Legendary Journeys is not in the insurance business and we only act as the intermediary for the insurance provider,” he adds.

In a letter sent to policyholders in late February from a trustee claiming to represent the three bankrupt insurance companies, holders of approved claims were assured that they’d be paid to “the greatest possible extent” over the next three years.

But some people familiar with the companies are incredulous. They believe the defunct insurance carriers are trying to buy time — time that its mostly elderly customers don’t have. And enough time to do what they claim these insurance companies have been doing for several years: to move to another state, morph into a new company and start selling unlicensed insurance through the same network of travel agents whose loyalty it buys with generous signing bonuses and too-good-to-be-true commissions.

Barry Resnick, a college professor from Orange, Calif., whose mother lost her vacation after buying an unlicensed policy a few years ago, now tracks companies that offer fake travel insurance. He says Traveler Protection Services is just the latest in a string of bogus travel insurance companies. “The perpetrator lines up a ring of travel agents, promising commissions up to four times what a legitimate insurance company would pay,” he says. “The product is masked to look like real insurance, promising compensation for specific potential future losses, in exchange for a payment.”

And then it’s marketed to retirees who are looking for an affordable insurance policy and who lack the resources to sue the fake insurance company or travel agent when a claim isn’t paid. In short, says Resnick, they’re the perfect victims who have allowed the fake insurance companies and their surrogates to get away with the perfect crime — at least until now. “A lot of the agents selling these policies are repeat offenders, waiting for the next new company to offer the same illegal product,” he says.

I asked Jerry Watson, a principal for the travel insurance companies in question, about the allegations made against his companies and several other now-defunct businesses he worked with that sold travel protection policies. Watson told me his policies were a “benefit services contract” — not insurance — and that he clearly represented them as such. “I ceased operations when I realized that there was no way that we could continue to pay claims based on the incoming revenues,” he says, adding, “I have no plans to leave Colorado and I do not have any intentions of operating any type of travel protection company.” You can see the full text of our interview here.

Insurance or not, how do you avoid buying a policy that can’t — or won’t — cover you? Here are six questions to ask before signing on the dotted line.

1. What do they call it?
The name of the plan can be a giveaway. Is it a “protection” plan or a “travel insurance” plan? There’s an important difference. Insurance is regulated by your state, according to Steve Dasseos, president of TripInsuranceStore.com. Trip protection isn’t. A clever travel agent may refer to a protection policy as “insurance” but the contract will tell you otherwise. “The phrase ‘travel insurance’ is tossed around, making it sound like every type of protection plan is a real insurance plan,” he says. It isn’t.

2. Is it backed by a legitimate underwriter?
Real travel insurance companies are backed by one or more regulated underwriters that are insured and financially healthy, says Bob Chambers, the director of operations for CSA Travel Protection. “Check the A.M. Best Web site to see current ratings for a provider.” (A.M. Best is a worldwide insurance rating and information agency, and any reputable travel insurance underwriter will be rated by it. If it’s not, walk away.) Also, check the U.S. Travel Insurance Association Web site to see if the company is a member. USTIA has strict legal and ethical standards of conduct.

3. Have you shopped around?
Don’t take the first policy that’s offered. And that’s particularly true of the one-click come-ons that you’ll find when you book a trip online. Instead, take the time to thoroughly review your options and consult with someone you trust. “In my opinion, it is always best to work with a travel professional — and you should seek and respect that person’s opinion,” says Guido Adelfio, president of Bethesda Travel Center, a travel agency in Bethesda, Md. In other words, do your due diligence on the agent you’re working with, too.

4. Is it being sold by a licensed agent?
It isn’t just important for your insurance policy to be legitimate, but also your travel agent. “If you’re unsure about the agent you’re working with, stop before signing any paperwork or writing a check,” says Michael McRaith, the property and casualty committee chairman for the National Association of Insurance Commissioners. “Call your state insurance department, which is easily reached by phone, and confirm the agent is legitimate and licensed to do business in your state.” You can get more information on reaching your state insurance commissioner at the NAIC Web site.

5. Did you read the policy?
Review the policy carefully before you buy. Don’t take someone else’s word for what’s in it. When it’s time to make a claim, verbal promises are meaningless. “Most travel insurance policies provide a grace period during which you can review and return for a refund if you choose to cancel the policy,” says Bradley Finkle, past president of the U.S. Travel Insurance Association. “If you have questions, travel insurance companies typically offer a customer service number to help answer questions.”

6. Are you aware of any tricky clauses?
Even if your license is backed by a quality underwriter and checks out, it may still be worthless to you. Why? Because of the clauses in your contract that are easily glossed over when you’re buying. The biggest snag is for pre-existing medical conditions. “If you have a pre-existing condition or health problem of any sort, make sure the policy covers you for that condition,” says John Wagner, the director of products and services management for Blue Cross Blue Shield of Florida. “No insurance policy will cover you for all possible events and eventualities,” he adds.

What if it’s too late and you’re stuck with a fake policy? You have a few options. Mark Cipolletti, a vice president at insurance provider Mondial Assistance, says you should contact authorities immediately. “Call the Department of Insurance in your home state to report the problem,” he says.

If you bought your policy through an agent, report it to the appropriate state regulatory agency. Let the Federal Trade Commission know about your problem, too. You can file a report online, by e-mailing or by phoning (877) FTC-HELP.

A dispute of your credit card charges or a trip to small claims court could help recover some or all of your money, but that’s not an ideal solution.

“It is much better to check everything up front than to try to untangle problems after the fact,” says Bill Hardy, director of AAA Insurance Services.

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“This is just the beginning of a much larger investigation”

What do the recent intents to file cease and desist orders by Florida against three travel agencies — Vacation Superstore, Legendary Journeys and Palm Coast Travel — mean for travelers?

I asked Barry Resnick, who has become something of an expert on the sale of unauthorized travel protection insurance plans. Resnick’s mother held a policy with Trip Assured, a Tennessee company that sold unauthorized trip protection plans. (I featured his comments in my MSNBC column last week.) Florida and five other states issued cease and desist orders against Trip Assured between 2005 and 2006. Jerry Watson began working at Trip assured in 2002 and left in early 2004 to start his own company, Vacation Protection Services, the predecessor to Traveler Protection Services and Prime Travel Protection.

Since the time his mother made a claim against Trip Assured that was eventually denied, Resnick has tracked these unauthorized companies and the agents selling the policies, working closely with the various state and federal investigators. But as a professor of counseling, Resnick also has an academic interest in recent events — as a case study in human behavior. I asked him for his perspective on the recent Florida rulings. Here’s our interview:

Q: What do the recent rulings mean for travelers?

Resnick: Simply put, it means buyer beware — not only for the product, but the seller of the product. It’s disappointing because many of these travelers relied on their travel agent for appropriate recommendations.

Q: What about travel agencies?

Resnick: Based on the intent to order a cease and desist, it’s rather confusing. The orders obviously put a stop to the sale of unauthorized insurance and insurance-like products. However, there seems to be issues with licensing that will need to be clarified. In speaking to the department’s legal counsel, it appears that this is just the beginning of a much larger investigation that entails several governmental agencies within the state of Florida and possibly the federal government.

Q: I read an interesting story in the Sun-Sentinel about one of the agencies, and it certainly seems like this is an innocent mistake. Do you think it is?

Resnick: I would hope a travel agent who sells insurance would be able to differentiate between legitimate insurance and non-insurance. However, based on the many sophisticated investors who were scammed by Bernard Madoff, I can condone an honest mistake.

When the Trip Assured investigation was being conducted, our lawyers received dozens of phone calls from both consumers and travel agents who purchased the unauthorized plan. The lawyers asked me to handle several of the calls as the volume was tremendous. I spoke to many people, including some very large producing travel agents. I certainly hope that those who were involved with Trip Assured did not sell Prime Travel Protection. I have been told that this issue is the focus of the state’s investigation to determine if any of the travel agents are repeat offenders.

Q: The press release issued by Florida makes this look like a minor infraction. No actual cease and desist orders have been filed. Isn’t this an almost victimless crime, in which only a handful of travelers lost their vacations?

Resnick: The state regulators usually act on complaints that are filed. I found in my personal investigation that many individuals do not even file with the state regulators. Therefore, the exact number of individuals who lost their vacations cannot really be determined. However, because it has been determined that these “policies” were unauthorized, even those individuals who did not file a claim may be entitled to a refund of their premium.

Q: Describe what’s at stake for the travel agencies selling these policies.

Resnick: The best word to describe what’s at stake for these travel agents is simply, “trouble”. The state has a lot of leeway in regards to how they may proceed. Civil and criminal penalties are possible. Individuals can also file civil lawsuits against their travel agent. Of course, it’s up to the courts to determine an agency’s liability. I would think a judge would be fairly sympathetic to a senior citizen who claims he or she relied on the travel agent’s advice in purchasing insurance. This will especially hold true if the individual bringing the lawsuit can prove that their travel agent has a track record of selling unauthorized travel protection plans. I know of a few such cases that were filed against the travel agency. Each was settled prior to trial.

Q: What’s the extent of the damage for travelers?

Resnick: I would hope at a minimum the cost of the trip and refund of the premium for those who filed a claim and those who did not. I know one traveler who passed away while battling for his claim. His family told me they were going to sue for damages against the travel agency. I do not know if the lawsuit was ever filed. In our litigious society it wouldn’t surprise me to see multiple lawsuits filed for damages above the cost of the trip. Whether the plaintiffs would prevail is another question.

Q: Do you think state and federal investigators are aware of the magnitude of this problem? And if not, why not?

Resnick: I know federal investigators have been made aware because I have been told by some individuals they have already contacted the Federal Trade Commission and the Department of Justice. Within the DOJ, the investigation would be assigned to an Assistant U.S. Attorney in the geographical region of the complainant. The Assistant U.S. Attorney would ask the FBI to conduct an investigation. These investigations can take a very long time and quite often those under investigation are unaware until an indictment is made. The state of Florida is very aware of the magnitude of this problem and they have been in communication with their counterparts in other states. It’s also possible the respective state investigators will share their information with the federal authorities.

Q: Are there any other travel agencies involved in this?

Resnick: As I mentioned, I spoke to many travel agencies a few years ago. I cannot recall offhand who I spoke to. I made copious notes that I plan to locate. I hope that none of the travel agencies I spoke to are involved with PTP. The Florida authorities did indicate that they are still looking at other travel agencies. I am personally not aware of any other agencies, but I am certain there must be more than the three who were issued the orders.

Q: In an interview with Al Ferguson of Legendary Journeys, he says only a a very small number of his clients are affected by the Prime Travel Protection and Vacation Protection Services bankruptcy. What’s your sense of how many travelers are currently affected by this scandal?

Resnick: That’s great, then Mr. Ferguson should pay them off right away. Everyone who purchased one of these plans has been affected. The plans are illegal. When asked about how claims will be honored, Mr. Ferguson responded that insurance products have a “mediation remedy”. He is absolutely correct, but what he does not seem to understand is the products he sold were illegal and are not insurance products. There is only one remedy in such cases and that is full reimbursement for the cost of the premium and claim, if filed.

Q: Legendary Journeys apologized for selling Prime Travel Protection and Vacation Protection Services. It’s so rare to find an executive apologizing for anything, and I have to be honest — I’m impressed. How about you?

Resnick: It’s admirable Mr. Ferguson has apologized, but he has to stop pointing fingers. He continues to put the blame on Prime Travel Protection and Vacation Protection Services and feels because other travel agencies have engaged in these activities it is somehow OK and he is not at fault.

Q: When I asked Ferguson how long his agency had been working with Jerry Watson, he answered by saying his agency was going to sue Watson. What do you think of that answer?

Resnick: I think Mr. Ferguson is evading the real issue here. First of all, he should immediately put his resources into reimbursing his clients. Many of these consumers are senior citizens and waiting years and even months is simply not acceptable. Last summer you posted information about Paul Donohue, a PTP claimant who purchased his trip protection plan from Legendary Journeys and was fighting for his claim refund. Unfortunately, Paul passed away this past week. He was a man of modest means and his wife is now left in a financial bind. How many other Paul Donohue’s will pass away before these travel agencies do the correct and moral thing and reimburse their clients?

I find it curious why Mr. Ferguson failed to answer the simple question of how long he has been working with Mr. Watson.

An Internet archive search shows that Legendary Journeys was selling “trip protection” plans as far back as 2003 and calling it “insurance”. This coincides with the time Mr. Watson was employed by Trip Assured and perhaps is the reason Mr. Ferguson failed to respond to your question regarding the longevity of his relationship with Mr. Watson. In my review of the archived Web sites, I found that the contract terms of these plans looked similar to the types of plans that are considered unauthorized by state insurance regulators. If Mr. Ferguson was indeed selling the same type of illegal trip protection as far back as 2003, this could be a very serious issue.

Q: Is that your only concern?

Resnick: No. Mr. Ferguson repeatedly refers to Vacation Protection Services. This company was issued a cease and desist order over two years ago by the state of Tennessee. I find it incomprehensible that Legendary Journeys would be selling a product from this company under the circumstances, especially after the date of the cease and desist.

Mr. Ferguson continues to use the excuse that Legendary Journeys was actually the victim and they were defrauded by Mr. Watson’s companies. As one of the largest travel agencies in Florida, if not the country, this is simply not an acceptable excuse.

The sale of unauthorized insurance by travel agents was widely publicized when Trip Assured was issued a cease and desist order in September 2006. Every trade publication covered the issue multiple times. A travel agency as large as Legendary Journeys certainly should have been aware of this matter considering the action was taken by the very state Legendary Journey conducts the majority of its business – Florida.

For a travel agency to engage in the sale of the same type of illegal product after the September 2006 Trip Assured cease and desist is incomprehensible in my opinion. More shocking, however would be to learn that an agency sold illegal trip protection through another unauthorized company and then later sold again through Prime Travel Protection.

As I write this, an investigation is underway to determine which Florida travel agents were involved in these illegal sales prior to Prime Travel Protection. It is my understanding the findings will be made public this week.

Q: I’ve received no fewer than three cease and desist letters from agencies and their lawyers, trying to stop me from publishing blog posts about them. Is this a tactic commonly used by agencies that sold Watson’s policies?

Resnick: This is typical behavior. I was threatened in a similar manner as was my mother and several others who pursued their claims. Threatening letters from lawyers, intimidating correspondence to the employers of those seeking claim reimbursement were common tactics. It’s just a way to move the focus away from the actual issues. My guess is whoever sent you the letters are possibly the individuals who have the most to hide – perhaps they are the agencies who have sold these unauthorized products over and over again. It would be very beneficial to your readers, Chris is you would share the name of the travel agencies who have threatened you.

Q: What should travelers do to make sure they don’t get caught with a worthless policy?

Resnick: Travelers need to be smart consumers and should thoroughly investigate their travel agent. The BBB provides a rating for many travel agents and that is a good indication of their reliability.

Q: Do you think it’s still safe to do business with these three agencies, and any other agencies named in a future complaint?

Resnick: I would hope they have learned from this unfortunate experience and make good on all claims. There is a saying that lightening doesn’t strike twice, so one would assume these agencies would certainly not sell unauthorized products again. The question that remains: Is this the first time that these travel agencies were involved in such sales? We’ll leave that question to the state regulators or perhaps an investigative reporter. I do believe if any of these agencies are found to have sold such unauthorized plans in the past, criminal charges will be filed.

Q: What do you expect next?

Resnick: I expect the state of Florida is going to take a serious look into who has engaged in the sale of these types of products in the past and who currently sold through PTP. I also believe the results of Florida’s actions will dictate the role of any federal investigation.

Q: As a psychology professor, what has this experience taught you about human behavior?

Resnick: Just like those who invested with Bernard Madoff – greed can be a powerful aphrodisiac. Prior to 2006, with the companies that preceded Prime Travel Protection and currently, travel agents were provided huge incentives for selling these unauthorized plans. They were given overrides and signing bonuses and may have made more money selling unauthorized insurance than cruises and tours. I honestly believe that greed overruled common sense.

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“I realized that there was no way that we could continue to pay claims”

We’ve already heard from Prime Travel Protection’s customers and from the agents who sold its policies. But other than a form letter from its trustee, the company and its president, Jerry Watson, have remained silent. Until now.

To recap, state authorities in Florida and Colorado are investigating Watson’s company and travel agents who sold Prime Travel Protection policies.

Agents say they were unaware that Watson’s travel protection was unlicensed insurance, and insist that they stopped offering it the moment they found out it was an illegal product. But some customers claim Prime Travel Protection is the latest incarnation of a sophisticated insurance scam, and they believe Watson will return with the same network of travel agents, whose loyalty they say he buys with generous commissions and signing bonuses.

Last week, I asked Watson for his side of the story. Here’s the full text of our e-mail interview:

Q: Why was it necessary to cease operations? Have you filed for bankruptcy protection, and if so, in which court?

Watson: I ceased operations when I realized that there was no way that we could continue to pay claims based on the incoming revenues. I had not received any cease-and-desist notices. I elected not to file bankruptcy mainly because it is and has always been my intent to make good on the obligations of the company. Liquidation seems to be a better alternative.

Q: How many claims did you pay in 2008? How much money was paid to your policyholders in total?

Watson: I don’t have the exact number of claims but the dollar amount paid in 2008 is approximately $1,236,691. The total dollar amount for all companies from 2004 through 2008 is approximately $5,627,222.

Q: How many outstanding claims do you currently have? What is the amount of the claims? Of those, how many are approved, and how much are they worth?

Watson: No answer.

Q: Did you ever represent any of the policies offered through Prime Travel Protection and Travel Protection Services to agents as insurance, or encourage agents to represent your policies to their customers as insurance?

Watson: NO, I/WE never advised the travel agencies or the customer that we were an insurance company. We stated that we offered a benefit services contract.

Q:: How is Prime Travel Protection different from travel insurance?

Watson: The Prime Travel Protection service contract is issued in exchange for a separately stated consideration, whereby we are obligated for a specified period to the holder to repair, replace or indemnify or reimburse the holder the cost of repairing, replacing or provision for incidental payments of indemnity. Prime Travel Protection is a member of CLIA (Cruise Lines International Association) and ASTA (American Society of Travel Agents.

The business plan of Prime Travel Protection is to provide benefits that have been deleted from other companies, including “Vendor Default” and pricing that is Non-Age based. Prime Travel Protection offers participating agencies the ability to receive commissions on sales and referrals or to establish their own pricing grids.

Prime Travel Protection is underwritten by the Cielo Capital Insurance Company Ltd; certificate number S24794 with assets exceeding $1,000,000.00 and its Reinsures.

As a comparison with other providers, our claim denial percent ratio was well within Industry standards.

Q: How many travel agencies were selling your policies at the time you ceased operations?

Watson: 38

Q: Do you have any plans to leave Colorado or to start another company that offers travel protection?

Watson: I have no plans to leave Colorado and I do not have any intentions of operating any type of travel protection company.

Update (9 p.m.): Watson has followed up with more information.

I wasn’t able to provide you with accurate data with reference to the number of claims and amounts due to the number of chargeback’s and agency participation in claims settlements.

Regardless of the outcome of the state investigations, I believe that I have tried to accommodate the consumer and the agency community the best that I can. However, the individuals that have responded to your blog are those that have been denied their request for reimbursement and I expect nothing more than their comments, etc. Unfortunately, the customers that have received the benefits of their contracts most likely will not respond in a complimentary fashion and they are in the majority. Our denial rate is less than 20%, which is well within the Industry averages.

For those consumers that feel that they have been denied the benefits of the contract purchased, per the Terms and Conditions of their contract, they have the opportunity to submit to binding arbitration with the American Arbitration Association for a hearing on their case. To my knowledge, their have been no cases filed with the American Arbitration Association. Their failure or lack of evidence to proceed with this form of resolution only validates their claim denial.

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Investigations of Prime Travel Protection, travel agents coming “to a head”

Authorities in two states appear poised to take enforcement action against Prime Travel Protection and travel agents who sold its policies.

“There’s an ongoing investigation,” says Chris Lines, a legislative liaison for Colorado’s regulatory agencies. “We expect it will come to a head in a matter of weeks.”

The state of Florida, which is looking at travel agencies that sold Prime Travel Protection policies — a product it considers unlicensed insurance — may be even closer to taking action.

Two more state agencies, Florida’s Office of Consumer Regulation and the Division of Insurance Fraud, have now joined its investigation. The involvement of the latter agency increases the likelihood that criminal charges will be filed.

The Federal Trade Commission, the agency created to investigate and eliminate unfair and deceptive trade practices in business, also appears to be in the early stages of its own investigation. Numerous travelers report they have filed complaints with the FTC, and one high-level official at the agency has confirmed today that the agency is reviewing the grievances.

In a related development, last week’s letter to creditors that purporting to come from Prime Travel Protection’s trustees, appears to have misstated certain facts. A review of bankruptcy filings in United States Bankruptcy Court reveals no record of a filing by Jerry Watson, Prime Travel Protection’s principal, or of his company.

The next several days may prove to be interesting, not only for Prime Travel Protection policyholders, but also for agents who sold trip protection policies and Prime Travel Protection’s owners.

Update (3 p.m.): Colorado has followed up with a statement regarding possible actions it could take regarding Prime Travel Protection.

Prime Travel Protection and Universal Assurance Group, Ltd. were not licensed to conduct the business of insurance in Colorado, thus the Colorado Division of Insurance is only authorized by law to issue a cease and desist order.

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