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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“Like everyone, we need the state to take action against Prime Travel Protection”

Florida regulators today filed a revised notice of intent to issue a cease and desist order against Legendary Journeys, a Sarasota, Fla., travel agency, as part of its investigation into Prime Travel Protection. It appears to be the state’s biggest action against a single company, with 17 counts and half a million dollars in outstanding claims, according to a government report. Here’s the order (PDF). Unlike some of the other agencies affected by this scandal, Legendary Journeys has been candid about its role and eager to face its critics. So I asked Al Ferguson, a vice president at Legendary Journeys, to answer a few questions.

Why do you think the state decided to revise its intent to issue a cease and desist today?

The intent is unclear. I think there is even conflicting opinion in Tallahassee on this.

We have complied on anything asked and submitted a mountain of paperwork to support everything that occurred. The revision is the same notice [we received a year ago] to not sell Prime Travel Protection policies. We stopped doing that six months before the first intent was issued.
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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, 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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Palm Coast Travel gets more company as regulators crack down on Cruises R Us, Atlantis International

Florida regulators this morning cracked down on two more travel agencies as part of their expanding investigation into illegal travel insurance. It brings the total number of companies charged with selling fake travel insurance to seven since January. More enforcement actions are believed to be on the way.

Notices of intent to issue a cease and desist orders were filed against Atlantis International Limited, a St. Petersburg, Fla., travel agency, and Cruises R Us of Plantation, Fla., which also used the name

Here’s the paperwork for Atlantis International (PDF) and Cruises R Us (PDF).

Cruisequick is familiar to readers of this site. A few years ago, it allegedly sold another unauthorized travel policy to reader Don Filiault. His insurance company, Trip Assured, was later hit with a cease and desist order issued by several states, including California and Florida.
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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

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, 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, 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, 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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“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.