(WMC TV) - A marketer for a Florida-based travel club under investigation by at least one state's attorney general has spent the last month luring consumers to a Germantown hotel with dubious promises of travel discounts.
DM Solutions, representing Reservations Services International (RSI) of Winter Park, FL, booked the Homewood Suites, 7855 Wolf River Blvd., for the entire month of April.
Its marketers sent an undetermined amount of mailers to Mid-South homes. The mailers appear to be from one of the airlines. They offer two complimentary round-trip airfare tickets if recipients call a number to book a spot at a seminar.
The first sign of trouble: a fine-print disclaimer on the mailer.
"It says (the airline) has nothing to do with this," said Midtown Memphis' Heidi Knochenhauer, who received the mailer.
When Knochenhauer and The Action News 5 Investigators answered the mailer's invitation under hidden camera, a DM Solutions representative asked for Knochenhauer's credit card.
"If something's free, why am I giving them my credit card?" asked Knochenhauer.
Amy Working, also of Midtown, and her husband attended one of the Germantown seminars after answering the mailer. She said the marketer was selling a license to access Reservation Services International's benefits website.
For $9,000 down -- plus an annual renewal fee of $320 -- Working said DM Solutions promised deep discounts on airfare, hotels and resorts anywhere in the world for the life of the license.
"Instead of buying an inflated product, you buy at cost as long as you purchase their license," said Working. "You had to purchase their license, and it would last for your lifetime."
Vicki Rush, CEO and travel agent of A&I Travel Management, said legitimate travel clubs never charge thousands of dollars for membership.
"They are a few dollars or a few hundred dollars," Rush said. "When you get into thousands of dollars, that is not a good deal." Rush said consumers could find more competitive travel options all by themselves either on the web or through an agent.
When Working balked at the $9,000 start-up fee, she said DM Solutions immediately offered to knock it down to $2,399. That should have been a warning, but it persuaded Working and her husband to sign a contract and buy the license.
"To get discounts on resorts, going to the beach for the summer, that didn't look so bad after all," she said.
What Working didn't know is March 15, New Jersey Attorney General Jeffrey S. Chiesa filed a lawsuit against another marketer, Global Travel Solutions.
According to the suit, the marketer was selling Reservation Services International's travel club memberships in New Jersey.
The suit alleges Global Travel Solutions, acting on behalf of Reservation Services International, "...enticed consumers into purchasing Memberships through the following: (a) direct mailings that falsely advised consumers that they were entitled to receive complimentary cruises and airfare when, in fact, these cruises and airfares were not free; and (b) misrepresentations, during sales presentations and meetings, as to their ability to secure for consumers large discounts on airfares, cruises and accommodations as well as the quality and availability of accommodations offered..."
"We allege that consumers paid significant money for sham memberships that were essentially worthless," said Thomas R. Calcagni, director of New Jersey's State Division of Consumer Affairs. "In fact, consumers could find lower vacation travel prices through free Internet sites."
The suit also alleges Global Travel Solutions, again acting on behalf of Reservations Services International, would not honor its contract's 3-day cancellation policy.
That's exactly what happened to Working when, after finding negative reports about DM Solutions and Reservation Services International on the web, she attempted to cancel her contract.
"After sending e-mails and letters to four different locations, I finally got someone on the phone who said they would void the ($2,399) charge. Two days later, it showed up on my credit card, and now, I can't get anyone to answer our calls," she said.
Similar to what is alleged in New Jersey, DM Solutions' marketers at the Germantown hotel revealed the truth about those "free" plane tickets to us under hidden camera.
"You will have to pay the taxes," said an unidentified DM Solutions representative, who added we would also likely have to pay an uncertain amount of destination and administrative fees.
When we revealed who we were and asked to speak to someone in charge of DM Solutions, a man who would not identify himself said, "I don't have to prove s*** to you. Go away. You're bad news."
A voice-mail message left with Walter Elvy, Reservation Services International's director of client services, was not returned.
The general manager of the Germantown Homewood Suites evicted DM Solutions' personnel April 23 after The Action News 5 Investigators explained our concerns with the marketer's sales pitch and with its relationship to Reservation Services International.