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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Prime Travel Protection investigation at crossroads after Vacation Superstore/Best Price Cruises filing

Florida’s campaign to stop unlicensed travel insurance appears to be at a crossroads. State regulators yesterday sent a two-count notice to Vacation Superstore Network/Best Price Cruises, with the by-now familiar charges: selling travel insurance without a required license, employing agents who didn’t have the necessary paperwork, and, of course, identifying customers who were affected by the alleged purchase of unlicensed insurance.

Here’s the document (PDF).
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Lawsuit update: Legal bloggers rally to support free speech online

I wanted to take a moment to say “thank you” for the support I’ve gotten from lawyers in the blogosphere after being hit with a frivolous defamation lawsuit from a Florida travel agency earlier this year.

We’ve filed a motion to dismiss the suit and there’s no question that the case will be thrown out of court with prejudice.

In the meantime, it has become clear to the experts that this case was filed with the sole purpose of silencing this blog — what’s called a strategic lawsuit against public participation (SLAPP), or a suit intended to censor, intimidate and silence someone by burdening them with the cost of a legal defense until they abandon their criticism.
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Palm Coast Travel fined $2,500 and placed on probation for selling unauthorized travel insurance

Looks like Palm Coast Travel, the Boca Raton, Fla., agency accused by the state of Florida of selling unauthorized travel insurance, while at the same time trying to sue one of its own customers and me into silence, has quietly negotiated a settlement with insurance regulators.

Under the agreement (PDF), which was signed today, Palm Coast Travel, which also does business online as Smartcruiser.com, has agreed to cease and desist selling unauthorized insurance and will pay a $2,500 fine as well as restitution to its customers affected by the purchase of an unauthorized insurance policy. It will be placed on 18 months’ probation and has agreed not to sell unauthorized insurance in the future.

The consent order is practically identical to a draft settlement agreement (PDF) that has been circulating between Palm Coast Travel and insurance regulators since last summer, and which I obtained after filing a public records request.
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Internal report shows Palm Coast Travel had $27,787 in outstanding travel insurance claims

A fresh round of public records released by the state of Florida’s Department of Financial Service this morning reveals the number of consumer complaints against travel agencies alleged to have sold illegal travel insurance, as well as the claims paid and their estimated value.

Palm Coast Travel had just three claims worth $27,787 — far below those of other large travel agencies such as Vacation Superstore (33 claims worth $131,061) and Legendary Journeys (174 claims worth $503,957). That figure suggests Palm Coast Travel, which also does business as Smartcruiser.com, aggressively moved to settle claims related to its alleged sale of illegal Prime Travel Protection products even before Florida regulators stepped in.
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Florida accuses three more travel agencies — wait, make that five more agencies — of selling unlicensed insurance

Looks like Palm Coast Travel has company. Florida regulators have filed charges against three more travel agencies as part of their expanding probe of unlicensed insurance offered through defunct Prime Travel Protection. (Two more agencies were added to the list at the end of today; see update at the end of this post.)

Ahoy Cruises of Jacksonville, Fla., JB Travel of Boynton Beach, Fla., and St. Lucie West Travel of Port St. Lucie, Fla., are accused by the state’s Department of Financial Services of violating several insurance-related statues — or, put differently, of selling fake travel insurance.

This is an important story, because bogus “trip protection” policies are known to have been sold to people across the country for years, potentially costing travelers millions of dollars in lost vacations.
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What was Palm Coast Travel doing with its Access America policies?

Florida’s Department of Financial Services is in the early stages of a far-reaching investigation into the activities of Palm Coast Travel and its affiliated companies, according to documents released this week under the state’s Public Records Act.

The documents also raise new questions about the relationship between Access America, the largest travel insurance company in the world, and Palm Coast Travel, which also does business online as Smartcruiser.com.

In a prepared statement, Access America yesterday suggested its current and future relationship with Palm Coast, which is accused of selling unlicensed insurance, is an internal matter.

“Thus far we have been contacted by both customers identified in the Florida investigation and we are working to resolve each matter appropriately,” a spokesman said. “Access America will continue to take steps consistent with providing ongoing care for its customers.”
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What’s next for Palm Coast Travel? Here’s what happened to agencies that settled with regulators

As I reported last week, Palm Coast Travel and its companies, including Smartcruiser.com, are headed to a hearing with a Florida administrative law judge to determine if it sold unlicensed travel insurance. This is an important story, because fake “trip protection” policies are known to have been sold to people across the country for years, potentially costing travelers millions of dollars in lost vacations.

So what’s next for Palm Coast Travel?

There are two possibilities. First, the judge could rule the agency didn’t sell unlicensed insurance. But that’s unlikely, given the customers who have already complained to state regulators that they were sold these allegedly illegal policies. Second, the court could find Palm Coast Travel guilty of selling bogus insurance.
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In a twist, Florida levels new charges against Palm Coast Travel

Only a few weeks ago, Palm Coast Travel, one of three large travel agencies the state of Florida last year alleged had sold unlicensed insurance, seemed to have everything going for it.

The state’s investigation into its activities appeared to have hit a dead end. The company, which runs the site Smartcruiser.com, had sued one of its customers and me in an effort to silence its critics. And it was issuing press releases at a regular clip, touting its Better Business Bureau rating and obsession with customer service.

But late last week, in an unexpected twist, Florida regulators filed an amended notice of intent to issue a cease and desist order (PDF) with more detailed charges against Lake Worth, Fla.-based Smolinski and Associates, Inc., which, in addition to doing business as Palm Coast Travel and Smartcruiser.com, also operates under the names Smart Travel Group, Smart Cruiser Holdings and Tripsmart. (Update: A hearing has been set for April 8. Here’s the docket.) Any way you read the latest claims, it’s clear that Florida’s Department of Financial Services has no intention of letting this case fade away. (Here’s the first notice, for comparison purposes.)
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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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