Cruise Value Center agency went under...

[sail7seas]

Excellent. I was hoping you would say that.

[iancal]

MadManof Bethesda is absolutely correct. Following the money will lead to the answer and this can typically be done in a very expeditious manner. If company funds were tranferred out in an inappropriate fashion (no matter how) then there is an issue. IF funds were not transferred out, but rather used for day to day business operations then it will be a fairly straighforward insolvency. Using financial tools such as Paypal does not necessarily mean fraud-it could indicate poor business practice. It does not matter if these funds 'should' have been directed to cruise lines to cover client obligations or whether they were used to pay legitimate business operating expenses. It think that it is unreasonable to jump to the conclusion that fraud is involved or that the principals are in violation of the criminal code until all of the facts are on the table. And this could take months. At this point in time all of the allegations appear to be based on word of mouth/anecdotal info. I think that it fair to assume that the people who are actually in the 'know' as to what has transpired will choose not to comment based on good advice. I truly hate to see any business go down-it can have an awful impact on customers, suppliers, and employess. I have dealt with CVC on a number of occasions and have always had good service. I cannot understand those who say.....see what happens when you use on line TAs...should have used a B&M agency. I cannot for the life of me understand the difference when it comes to insolvency. The B&M agency can go out of business just as quickly as an on line TA. Many of the home based TA's simply act as sub agents for the large on line companies.

[sail7seas]

The B&M agency can go out of business just as quickly as an on line TA. Many of the home based TA's simply act as sub agents for the large on line companies.

 

 

Yup..... :)

 

My down the street B & M was in business for over 30+ years until they weren't. I started to get a sense all was not well and stopped booking with them. I couldn't put my finger on why I suspected there were problems but listened to my instinct. Sure enough....... they closed their doors and are gone.

 

[Donray]

You don't understand why these people should not be prosecuted and in jail??? You are not following what was going on. They took peoples credit cards and instead of paying the cruise line (which should have been done THAT DAY), they paid the monies to themselves and never paid the suppliers or cruise lines. Even former employees have posted that they were instructed to take payments through Pay Pal. These people belong in jail.

 

Tell me what laws they broke?

[Jade13]

Excellent. I was hoping you would say that.

 

You should join us. They still have cabins left. Unless you add additional days on your own, it is 14 days (including Air Travel), Friday - Thursday.

[sail7seas]

Thanks, Jade. That's not exactly my cup of tea but I certainly understand the attraction for others. I'm not into long distance, strenuous travel these days.

[Jade13]

Tell me what laws they broke?

 

They took peoples credit card information and never paid the cruise line, and instead put the money in their own account.

[Maya57]

The agency was located in New Bruswick, NJ was at one time one of the largest cruise sellers in the country selling on the internet.They were able to outsell everyone by giving large discounts. Details of exactly why they closed their doors is unkown but you get bet that discounting had something to do with it. The profit margin on selling travel is very small and giving some of it away will sooner or later take its toll.

 

Personally when I book my travel I want to sit across from my TA. I do not spend that much money on the internet not knwoing who or where it is going. I also do not book with a travel agent working out of their kitchen, I want to see an office indicating that they have some financial investment in their buisness. Out of all the TA's that went belly up in my area leaving consumers with no trip and no money 90% were agents that worked out of their home.

 

Why I don't book direct with the cruise line is service, service, service. On one of my crusies my TA was informed by RCI that they would not be stopping at one of the scheduled ports. On the ship I found a lot of mad people who booked direct with RCI and were not informed of this change until they were on board. When I have a problem I tell my TA and she handles it contacting the cruise lines or tours company.

 

BTW My TA does NOT charge me anything more than the cruise line would charge and sometimes is able to find better deals offered by the cruise line.

[iancal]

We use a TA for certain travel, but not for cruises. I think it is very difficult to determine if a TA has a financial investment in a business or indeed if that capital investment has been eliminated through a few years of loss provisions. Real estate is rented, furniture, fittings, automobiles, signage and phone systems are leased. Who's to know whether that office is living hand to mouth and about to fold. Sometimes it is easy to tell just by the general level of activity when you visit the office but quite often than not the demise is sudden.....when the bank decides to call the operating loan as they know the business account balances are about as high as they will be at any given time period -usually just prior to payroll time.

[Donray]

They took peoples credit card information and never paid the cruise line, and instead put the money in their own account.

 

You are sure they put the money in a personal account and not a company account. I think you should make sure that the police in NJ are notify by you with your proof that the money went to a personal account.. They will then arrest and prosecute them and you can be a star witness.

You don’t think they did what a lot of people do and just try to hold off paying a bill by using money that should have been used to pay some other bill first? Might have been bad business, but I don’t think what they did was illegal. If it is a lot of people should be in jail for using one credit card to pay off some other card or loan.

[billie5]

Perhaps some contributors don't appreciate that a company with a large cash flow like CVC does not track the dollars paid to them by each traveler with the name of the traveler. CVC has been doing an estimated $2,000,000 of cruise business per week ($100 million for the year). It is certainly likely that payments are collected in a credit account, with a corresponding entry in their debit ledger, but the actual payments out of the debit account might be made on a periodic basis, say once a week. Were that the case, it is not so surprising that when they finally went belly up, there could have been $2 million, a week's worth of collections, still owed out of their debit account -- which, incidentally, corresponds to the reported shortfall in their payments to the cruise companies. Actually, a company trying its best to stay afloat might have delayed its last few payments, so perhaps it is fortunate that the unpaid balance is not considerably higher than $2 million! It is hard to fault a company trying its best to stay solvent, although I am sure I would not be so generous if it were my payment which was lost. Unfortunately, whatever might have been left in their credit account is subject to claim by all of CVC's creditors, even if you know that part of it really is your money.

 

Of course, it would not surprise me if it turns out they really were crooks. The point is, IMO, that it is too early to have any idea as to what caused their insolvency.

 

Bill

[Jade13]

You are sure they put the money in a personal account and not a company account. I think you should make sure that the police in NJ are notify by you with your proof that the money went to a personal account.. They will then arrest and prosecute them and you can be a star witness.

 

 

You don’t think they did what a lot of people do and just try to hold off paying a bill by using money that should have been used to pay some other bill first? Might have been bad business, but I don’t think what they did was illegal. If it is a lot of people should be in jail for using one credit card to pay off some other card or loan.

 

 

As I stated earlier, my trip was charged to the supplier as I insisted on it after hearing a few weeks ago right on Cruise Critic that this was not being done (and was not how this agency used to operated). I am going on my vacation.

 

If you read through the threads there are those that gave their credit card a number of months ago and are just finding out that the cruise line was never paid. There is no bill to hold off paying if you take a clients credit card and charge it to the cruise line. These folks who have posted here are finding out that the charge was made out to "Cruise Value Center". These people can dispute with the credit card company and I suppose Visa, MasterCard and Amex will take the 2-3 million reported hit which will probably eventually affect us all.

 

I feel bad for both the employees who are out of work, are not getting their last payment nor commissions owed, as well as really bad for those who paid their cruise by check or debit card that will probably never get their vacation back.

[Jade13]

Perhaps some contributors don't appreciate that a company with a large cash flow like CVC does not track the dollars paid to them by each traveler with the name of the traveler. CVC has been doing an estimated $2,000,000 of cruise business per week ($100 million for the year). It is certainly likely that payments are collected in a credit account, with a corresponding entry in their debit ledger, but the actual payments out of the debit account might be made on a periodic basis, say once a week. Were that the case, it is not so surprising that when they finally went belly up, there could have been $2 million, a week's worth of collections, still owed out of their debit account -- which, incidentally, corresponds to the reported shortfall in their payments to the cruise companies. Actually, a company trying its best to stay afloat might have delayed its last few payments, so perhaps it is fortunate that the unpaid balance is not considerably higher than $2 million! It is hard to fault a company trying its best to stay solvent, although I am sure I would not be so generous if it were my payment which was lost. Unfortunately, whatever might have been left in their credit account is subject to claim by all of CVC's creditors, even if you know that part of it really is your money.

 

Of course, it would not surprise me if it turns out they really were crooks. The point is, IMO, that it is too early to have any idea as to what caused their insolvency.

 

Bill

 

Bill, but don't you agree normally a company would try to stay afloat by first cutting staff (even if that would not have solved the problem long term). It doesn't appear that this company made any attempt to finalize the cruises with money they had taken from clients. Employees who have posted have stated the entire place (about 75 employees) were just all let go on the very same day.

 

Also, I'm not in the business but I thought another TA stated that they normally would get (large) payments by the cruise lines at the end of the year. If that was the case you would think they would try to ride it out to complete some of their commitments.

 

On a very basic level it sounds like the margins were not enough to pay the employees salary and mortgage (if there was one) or basic operating expenses such as electric and insurance. You are right though that we do not yet have all the facts.

[Jade13]

I just spoke to the very large and popular online agency I use all the time and they told me specifically that they always charge directly to the cruise line not to them, which I knew was true. They have always been so good and helpful to me. They are in Florida, which is rumored to be another place where one is going down, and they assured me it wasn't them, but still, one has to be cautious.

 

Interestingly, someone has just made a complaint to the BBB regarding your company, although this issue has to do with insurance and I think the fault may be partly their own for not reading the terms of the "Free" Insurance.

 

Pricing is an issue but personally I like "Cancel for Any Reason" as you do not have to give one, don't have to disclose your personal medical records either.

 

This person was given bad advise by the agent who recommended the policy as her 91 year mother who died was mentioned to the agent. Apparently the policy does not even cover family members not traveling with you.

 

http://boards.cruisecritic.com/showthread.php?p=17030512&posted=1#post17030512

[scottjeanne]

Billie:

 

You suggested that the only payments not made to the cruise companies were for deposits made in the last week or so to CVC. Cruise Value Center charged my credit card on September 5 to their own account for our final payment. HAL has never received the final payment. I also made a crucial tactical error. CVC owed me a refund from a previous cruise we took last spring. I agreed to have them credit it to this cruise since the refund had not been recieved in three months. Between the two credits, CVC has over $9000 of my money. And it is not funds they recieved in the last month. It was over two months ago and longer.

 

We are still going on our December cruise to Australia, but I had to pay the final deposit again. I have submitted a compalint with my credit card company. I will see how that is resolved.

[Jade13]

Billie:

 

You suggested that the only payments not made to the cruise companies were for deposits made in the last week or so to CVC. Cruise Value Center charged my credit card on September 5 to their own account for our final payment. HAL has never received the final payment. I also made a crucial tactical error. CVC owed me a refund from a previous cruise we took last spring. I agreed to have them credit it to this cruise since the refund had not been recieved in three months. Between the two credits, CVC has over $9000 of my money. And it is not funds they recieved in the last month. It was over two months ago and longer.

 

We are still going on our December cruise to Australia, but I had to pay the final deposit again. I have submitted a compalint with my credit card company. I will see how that is resolved.

 

But, I assume you also had to pay the higher amount to HAL including the amount that was supposed to be a refund? So, even when your credit card company looks, the amounts will not match up, ie you can dispute the lower amount that CVC charged you (it included a refund), but HAL still needed the full amount.

[RedmondCruiser]

We booked a cruise on line on October 9th for the November 1st sailing of the Ryndam. This was done on line. The charge ( from HAL ) shows up with an October 10th date. The charge on my card was from HAL.

For those of you who are missing funds, were you making your booking on line or did you deal with one of their TA's ?

We book late and our total payment is always due. Could this be the difference ?

[scottjeanne]

Jade, no the amounts do not match up. HAL is charging us $176 more than CVC. I had the refund of $2761 and the final deposit of $6874. CVC made the intial deposit back in August of 2007 of $2550 and they made an additional payment on our behalf. I had a difficult time getting HAL to tell me how much this was and when it was made. The credit card company is challenging the $6874, but not the $2761 credit from the previous cruise. I paid HAL an additional amount to finalize our booking. It will never come out the way we had budgetted and booked.

[Jade13]

Jade, no the amounts do not match up. HAL is charging us $176 more than CVC. I had the refund of $2761 and the final deposit of $6874. CVC made the intial deposit back in August of 2007 of $2550 and they made an additional payment on our behalf. I had a difficult time getting HAL to tell me how much this was and when it was made. The credit card company is challenging the $6874, but not the $2761 credit from the previous cruise. I paid HAL an additional amount to finalize our booking. It will never come out the way we had budgetted and booked.

 

Wow, this is confusing. So, how much do you think you will be out, the $2,761.00 credit plus the $176.00 additional cost on this cruise? It is easer to dispute a charge made directly to CVC.

[MightyQuinn]

I have lost sleep over this. I am someone who has lost a significant amount of money I will never get back. While my upcoming cruise (non HAL) was paid to the supplier, this TA owed me money and it was not a small amount.

Hi Jade - I really appreciate that you & others have so openly shared your stories. I think this thread makes us all aware of what could go wrong with bookings, even when everything seems to be going just fine. But I have a question for you: As I understand it, you insisted that payment for your cruise be made direct to the supplier & not to the TA. I assume that was done, so I'm curious how the TA owes you money? If you can share, thanks. If not, I understand.

 

I'm so sorry that you're caught up in this mess but I'm happy that you're going ahead with your Antarctic trip. It's a real life-changing experience. :):)

[Aussie Gal]

Because we live overseas, I always keep on checking my Amex account after giving deposits and full payments online to U.S. agents.

 

By doing that I can see that within a couple of days my funds have gone directly to the Cruise Line. The funds have always gone directly and I have never had the need to worry.

 

There is no way that I would give an online TA the go ahead to take the money from my credit cards for final payment or a deposit without being able to constantly check my account.

 

Jennie

[cruiseladytexas]

It is a bit risky to work through travel agents - they like to charge you as early as possible and pay the line as late as possible (naturally trying to maximize their use of your funds). If they go under before the line confirms receipt of payment, you can be at risk. While they might be able to find you somewhat better pricing, you can usually do as well yourself by calling around - following up, asking to speak to supervisor, etc. Particularly now, with many small businesses on the brink, it may be a good idea to eliminate as many middlemen as possible and deal direct with the provider (of whatever service) yourself.

 

Actually, most agents will call the payment in directly to the cruise line (or tour operator or travel company). We don't make enough commission to absorb the 3-4%credit card fee. And anyone who gets the "free" insurance, gets only bare bones coverage, no financial default or pre-existing coverage and the insurance is not purchased until final payment.) The only money I charge directly to my own merchant account is for travel agency fees, deposits on group airline tickets, and group sightseeing when the company wants a check. I NEVER charge anything that can be charged to the cruise line. If you see a charge like that, you should be worried. About 15 years ago, South Florida Cruises (a $25 million agency) and another one went out of business the same month. And it was exactly the same, they rebated their commissions a lot, started taking credit card payments directly and then closed their doors one day, and many many passengers who thought they were paid in full found out the cruise line had not been paid. It's really sad when this happens, because those of us who act honorably get painted with the same brush. But then, isn't it partly the consumer who should bear some blame? Except for group space and two-week sales that produce shipboard credit and reduced deposits and maybe dollars off, we all have access to the same prices. So, you shop around and find an agent who will reduce your price by a couple of hundred dollars and you go for it. But, eventually, the agency who does that will get squeezed just a little too hard, and won't be able to catch up. When they close down, the only thing the cruise lines can do is service your booking, but they won't give you credit for money they did not receive. I am always sorry when this happens

 

Karen

Oh Say Can You Sea Cruises

[Jade13]

Actually, most agents will call the payment in directly to the cruise line (or tour operator or travel company). We don't make enough commission to absorb the 3-4%credit card fee. And anyone who gets the "free" insurance, gets only bare bones coverage, no financial default or pre-existing coverage and the insurance is not purchased until final payment.) The only money I charge directly to my own merchant account is for travel agency fees, deposits on group airline tickets, and group sightseeing when the company wants a check. I NEVER charge anything that can be charged to the cruise line. If you see a charge like that, you should be worried. About 15 years ago, South Florida Cruises (a $25 million agency) and another one went out of business the same month. And it was exactly the same, they rebated their commissions a lot, started taking credit card payments directly and then closed their doors one day, and many many passengers who thought they were paid in full found out the cruise line had not been paid. It's really sad when this happens, because those of us who act honorably get painted with the same brush. But then, isn't it partly the consumer who should bear some blame? Except for group space and two-week sales that produce shipboard credit and reduced deposits and maybe dollars off, we all have access to the same prices. So, you shop around and find an agent who will reduce your price by a couple of hundred dollars and you go for it. But, eventually, the agency who does that will get squeezed just a little too hard, and won't be able to catch up. When they close down, the only thing the cruise lines can do is service your booking, but they won't give you credit for money they did not receive. I am always sorry when this happens

 

Karen

Oh Say Can You Sea Cruises

 

Karen, that is a very interesting point regarding the 3-4% credit card charge, so now what CVC was doing makes even less sense if charging to their own account cost them an additional 3%, as an example, with Visa.

 

Ok, I am pretty sure in the past TA's could discount the cruise while still using the clients credit card to pay. So, how was that done?

 

Also, just fyi the moderators will likely remove your agency name but I hope they do not remove your entire post as it brings up a new point regarding the cost for merchants to have credit card billing.

 

Also, all agents do not have access to the same rates. As an example, I have seen rates on a $2,800.00 cruise (base rate) direct with HAL offered by this TA for say $1,800.00. As I have mentioned on CC even a year ago some of these in my opinion were perceived discounts for the same size cabin in a different location. So I think (could be totally wrong) Carnival/HAL may have sold balconies to the big agencies at the same price whether it was on deck 4 or deck 7 etc. But I know there were price breaks for groups.

[cruiseladytexas]

Karen, that is a very interesting point regarding the 3-4% credit card charge, so now what CVC was doing makes even less sense if charging to their own account cost them an additional 3%, as an example, with Visa.

 

Ok, I am pretty sure in the past TA's could discount the cruise while still using the clients credit card to pay. So, how was that done?

 

Also, just fyi the moderators will likely remove your agency name but I hope they do not remove your entire post as it brings up a new point regarding the cost for merchants to have credit card billing.

 

Also, all agents do not have access to the same rates. As an example, I have seen rates on a $2,800.00 cruise (base rate) direct with HAL offered by this TA for say $1,800.00. As I have mentioned on CC even a year ago some of these in my opinion were perceived discounts for the same size cabin in a different location. So I think (could be totally wrong) Carnival/HAL may have sold balconies to the big agencies at the same price whether it was on deck 4 or deck 7 etc. But I know there were price breaks for groups.

 

When we book group space as soon as the rates come out, it is possible to have a legitimate difference in pricing; but it's unusual for it to be $1000. I have checked prices often against many online agencies, and rarely do I find much difference since they have cracked down on rebating.

 

Someone mentioned that CVC had bigger taxes but HAL charged more for the cruise, so it came out close - actually, CVC probably seperated the "port fees or NCF's" from the cruise fare but HAL probably combined that part with the cruise fare.

 

I know that a consortium that I worked with in the past used to pre-buy space on selected cruises that they could retail for any price, but most agencies only book what has been sold. That is different than actually blocking group space and then releasing unsold space.

 

As far as criminality, I think that the cruiseline's portion should be considered trust funds. That money is NEVER ours, even for a minute, so, any company that uses the cruise line's money to pay bills should be prosecuted criminally. The only portion that belongs to us is the commission, and even that is recalled if the cruise is cancelled. On my books that would be a liability "unearned commission received".

 

(Sorry about putting agency name. I misread the requirements about phone, links etc.)

 

karen (a travel agent)

[billie5]

Jeannie, if I understand correctly it seems that the reservation you made in September was not routine, what with the earlier credit. I think CVC has had trouble with nonroutine transactions for a number of years, if Internet complaint blogs about them are any indication. Perhaps they have set up their customer service to deal with a huge volume of standard transactions, with no one able to deal with the occasional wrinkles. It is interesting that, although the complaint blogs are extensive, the "compete group" which I can not name here registered a 99% approval rating for CVC based on more than 2000 cruise reviews.

 

Jade, there are so many financial possibilities for which "cutting staff" might not be a prelude to failure. For example, perhaps a refinance to deal with their cash flow problem might have been in the works, not requiring staff cutbacks, and if that fell through, the end could be immediate. Perhaps they were hoping for/expecting a takeover bid, which unexpectedly fell through. I am sure an MBA could come up with dozens more scenarios. My only point was that without financial details it is impossible to know if their demise was an honorable, desperate and eventually futile effort to stay afloat, or entirely crooked.

 

Bill