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Protect Yourself From Financial Loss When Booking Travel

Michelle Couch-Friedman talks about the Vantage Travel bankruptcy and how you can avoid being the victim of a bankrupt company.

Imagine you’re booking a vacation. It’s a big trip, like a cruise or a tour. You’ve been saving up for it for a long time, and you found a great deal with a well-established, trusted tour company. But a week after you book your trip, the company goes bankrupt. It’s a nightmare. Do you have options to get your money back? The Vantage Travel bankruptcy took a lot of people by surprise. Many lost thousands or tens of thousands of dollars. But some had avenues to get that money back. We can all learn some lessons from this situation about how to protect our financial investment when booking travel.


See Vantage Travel Bankruptcy with Michelle Couch-Friedman for a complete transcript of the Easy Prey podcast episode.

Michelle Couch-Friedman is the founder and CEO of Consumer Rescue, a consumer advocacy organization that provides free assistance to help customers mediate their problems with businesses. (She’s also been a guest on WhatIsMyIPAddress.com before to discuss Zelle and vacation rental scams.) When she works on cases, she also writes articles about them to share the lessons with other consumers. In addition, she publishes a weekly newsletter with additional tips.

Her team is always available to solve problems for consumers. They also have a service if you want to do it yourself. Meera, their research director, has a huge list of contacts at many companies. Their Ask Meera feature lets you request contact information for a real person at a company you have a dispute with so you can reach out yourself. All of Consumer Rescue’s services are free.

What Happened With the Vantage Travel Bankruptcy

In 2023, Vantage Deluxe World Travel went out of business. When it did, it owed $110 million to customers. The company had been in business for forty years and had a bunch of loyal customers. Many of them were blindsided by the bankruptcy announcement. The tours they booked were canceled, and the money they spend on them was gone.

Melissa has been covering this incident heavily because it impacts over 10,000 people. No company bankruptcy has ever impacted that many consumers before. She has been educating consumers that are able to get some or all of their money back how they can do so.

The Pre-Bankruptcy Sales Blitz

Vantage was actively selling tours until six days before it announced the bankruptcy. It had fired almost all of its employees, except its sales team. And it was offering all kinds of great deals, like all-inclusive two-week trips to Egypt for only $3,500. These trips were never going to happen, but the people buying them didn’t know that. Many thought this company that they’ve known and trusted for decades was just doing some kind of spring sale.

Vantage ran this sales blitz for about six weeks before it fired its sales team. In those six weeks, it sold $2 million worth of trips that wouldn’t and couldn’t happen. The goal was to prove that the customer list had value. It worked, and another company bought Vantage’s customer list. But it left 10,000 customers without a trip and without their money.

They were trying to convince the buyer that even with all the negative publicity, there was still value in the company.

Michelle Couch-Friedman

Signs that Vantage Travel was Heading Towards Bankruptcy

Vantage Travel was an active tour operator. They leased several boats, both riverboats and ocean vessels, and had trips scheduled several times a month. But as they got closer to the date where they fired all their employees, they canceled more and more trips.

Months before the Vantage Travel bankruptcy, employees contacted Michelle with concerns. They didn’t give specifics, but there was something wrong at the company. Operational issues caused a lot of trips to be canceled. It turned out that those “operational issues” were that the company’s ships were repossessed because they couldn’t make the payments. They didn’t have the money to operate. Vendors also contacted Michelle and said that Vantage Travel owed them hundreds of thousands of dollars, but they were still taking work because the company promised payment soon. Between what they owed consumers and what they owed vendors, Vantage Travel dug themselves into $170 million in debt before they filed bankruptcy.

The Pandemic Impact

Most consumers know to be cautious about brand new companies. But Vantage Travel had been around for forty years, so they seemed more trustworthy. The problem was the pandemic. Normally it would be a huge red flag when a large portion of a company’s tours are canceled. But the pandemic caused the entire travel industry to cancel almost everything. What would normally be a warning sign became normal.

As early as October 2021, Michelle was talking about how Vantage Travel didn’t seem to have gotten the memo that pandemic restrictions had eased and they could stop canceling their tours. But it’s likely some consumers just weren’t aware. They trusted in the well-established brand and didn’t research beforehand.

It’s also likely that some customers recognized the warning signs but didn’t have any choice in the matter. Vantage Travel didn’t refund most pandemic cancellations. Instead, they offered it as credit towards a future trip. So for some people, even if they recognized something was wrong, they were locked into booking with Vantage Travel anyway. Vantage often made it worse for these people by claiming the price of their trip has gone up, there were new add-ons or fees, or they could switch to a different trip for just a little more money. Some people had $30,000 or more in credit they could only use at Vantage Travel.

We can learn lessons from this story. Michelle has lots of advice on how you can avoid being a victim of a bankrupt travel agency or company, or a bankrupt anything. You can take steps to make sure this doesn’t happen to you.

Lessons to Learn from the Vantage Travel Bankruptcy

There are only two ways to get a refund from a bankrupt travel agency, or any company. One is if you paid by credit card, you can file a chargeback with the credit card company. The second, which only applies to travel-related companies, is if you have travel insurance that covers insolvency.

The majority of people affected by the Vantage Travel bankruptcy had neither. Like many companies, Vantage offered discounts if you paid with a bank transfer. Many people took advantage of the discount to save a small amount, but ended up losing the rest of their money. And many also didn’t have travel insurance, or didn’t have insurance that covered insolvency.

Travel Protection versus Travel Insurance

A lot of people don’t realize that travel protection and travel insurance aren’t the same thing. Vantage Travel, like a lot of tour operators, offered travel protection as an optional add-on to trip purchases. They call it protection because they can’t legally call it insurance. Insurance is heavily regulated and requires an underwriter. “Protection” is self-funded by companies and is not very regulated. And because the protection is funded by the company, if the company goes out of business, the protection can’t help you.

You want to get your travel insurance away from the company that’s taking you on the tour.

Michelle Couch-Friedman

Michelle keeps telling people and writing about it: Don’t be insured by someone with no underwriter! If there isn’t an underwriter and the company goes out of business, your money goes with them. The protection you invested in means nothing if a company goes out of business owing $170 million. When they owe that much, there’s not going to be any money there to help you. It’s not really protection, it’s just pricey unprotection. You always want to get your travel insurance from a third-party company, not the company doing your tour.

Make Sure Your Insurance Covers Insolvency

Not all travel insurance covers the company going out of business. Some people affected by the Vantage Travel bankruptcy did what you should do. They went to an actual insurance company and got a travel insurance policy. But because they policy didn’t have an insolvency clause, they weren’t protected.

Not all travel insurance covers situations like the Vantage Travel bankruptcy.

Travel insurance is generally meant to protect you from your own cancellation – things like if you get sick, if someone in your family gets sick, or there’s a death in the family. These policies are called perils policy, and they cover around a dozen different situations. But many policies exclude situations where the tour operator goes out of business. If you want to be protected from a company going bankrupt, you need a clause that says you’re protected from insolvency with or without bankruptcy.

Some people with travel insurance policies made claims when Vantage Travel announced their bankruptcy. But for people whose trips were canceled previously, many travel insurance companies said the policy ended when the trip was canceled so they aren’t protected. Michelle took a bunch of these cases and argued that even though the company wasn’t bankrupt when the trip was canceled, they were definitely insolvent. Many of those cases got their insurance claims approved after that.

“Insolvent” means a company isn’t able to operate its trips because it doesn’t have enough money to pay its bills. That’s not hard to prove when you see patterns like trips being canceled and employees leaking internal memos to the media. Especially when you’re booking an expensive trip, get travel insurance from a third party and make sure you’re protected against insolvency with or without bankruptcy.

Recovering Money Through Financial Institutions

If you paid for a trip with a company that went bankrupt, you can dispute the charge with your credit card provider. However, that can sometimes be a challenge because it’s not unheard of for people to book cruises two years in advance. Often there is a time limit for when you can dispute. The clock is generally supposed to start from the date of service, not the date of the charge. But Visa and MasterCard, the two biggest credit card servicers, have a limit of 520 days from date of charge, regardless of when the service was supposed to happen.

If you paid with a bank transfer, those are generally not reversible unless the bank that received it agrees to send it back. In the case of the Vantage Travel bankruptcy, though, it was different. You should never count on it happening, because Michelle has never seen it before. But because of the sales blitz the company went on before going out of business, a lot of banks and credit card companies considered it to be fraud. Some banks returned customer money because of that.

A lot of consumers don’t understand there is no purchase protection with a bank transfer.

Michelle Couch-Friedman

To be safest, you should always pay with a credit card. Even if you get a discount not to do so, you should. The Fair Credit Billing Act only protects you if you’re using a credit card. If you don’t use a credit card, it doesn’t help. And if a company goes bankrupt, even if your money is just sitting in an account somewhere, you can’t go grab it back because bankruptcy freezes the accounts. It’s always safer to just use a credit card.

Scammers Targeting Victims of the Vantage Travel Bankruptcy

The scammers come out when they see a pool of victims somewhere.

Michelle Couch-Friedman

When something big happens, scammers want to find out how they can get a piece of it. When the event results in a pool of victims, like the Vantage Travel bankruptcy did, they see an opportunity to re-victimize people and maybe steal even more money.

Targeting Credit Card Disputes

The first scam they tried was against people who had valid credit card disputes. Many Vantage customers filed disputes and should have been successful. Michelle has never seen a bankrupt company ever file a challenge to a customer dispute. But suddenly these customers were getting letters from Vantage Travel saying the company isn’t out of business, the trips are still going, and they should call this phone number to reschedule. Michelle has published some of these letters on Consumer Rescue. They have no names attached, poor grammar, and other common signs of a scam. Some of them even claimed to come not from Vantage, but from the company that bought Vantage’s customer list – and who had nothing to do with the disputes.

Scammers targeted victims of the Vantage Travel bankruptcy with fake letters.

These letters went out to a variety of people from a bunch of different banks. Michelle reached out to her contacts at those banks and started an investigation. They quickly realized it was a scammer. The likely goal was to get people to call the phone number to “reschedule their trip” and extract more money in fake fees. Michelle started publishing articles to get the word out about this scam and that seems to have caused the letters to stop.

Targeting Bankruptcy Claimants

The other scam targeted customers who were on the bankruptcy claims list. When Vantage went bankrupt, people had the opportunity to fill in a form stating that Vantage owed them money and how much. This data went to a bankruptcy warehouse called Stretto. When a judge signs a bankruptcy order, it gets uploaded to Stretto, and people can go there and find all the information they want about the bankrupt company that owes them. It’s public. But the list of claimants is also public. Scammers know this, and they use it to build a list of victims.

This particular scam took Stretto letterhead and made an offer. They claimed that victims weren’t going to get any money back at all. But investigators had recently uncovered a stash of cryptocurrency that they could distribute. Victims could take half of the amount they were owed in crypto and be removed from the claimant list. That’s the best offer they were going to get. But it was a limited-time offer, and they had to accept the crypto payout within 24 hours.

Rushing you to hurry up and make a decision before you can think, google it, or contact a consumer advocate is a common sign of a scam. Luckily one of the victims saw the warning signs and sent it to Michelle, asking if it was real. Michelle knew right away that it wasn’t. She assumes the scam was to give everyone who accepted the “deal” a certificate saying they’ve received so much money in crypto, and when they try to redeem it there would be additional fees, a cost to convert it from cryptocurrency to U.S. currency, etc.

What to Do if a Company You Booked With Filed for Bankruptcy

When a company files for bankruptcy and owes you money, you’re supposed to send you a card in the mail to notify you. But the problem with the Vantage Travel bankruptcy was that their bookkeeping wasn’t very good. A lot of the customers that were owed money weren’t on the list. If you don’t get that notification, you have to find out about it first. Do some digging, get on the internet, find a consumer advocate, or read news articles. If you can find out the jurisdiction the bankruptcy is happening in, you can usually contact the court and ask for information. Warehouses like Stretto also let you sign up for updates.

If you find out you are the victim of a bankrupt company, keep your eyes open for more information. Many times the companies won’t provide it because they don’t have employees anymore. Be proactive and make sure you’re on the list. But remember, in most cases, you won’t get money from the court. If a company is going bankrupt, they don’t have money. If a company has no money and owes $170 million, you’re probably not going to get anything. It’s best to look elsewhere.

In all likelihood, nothing is going to trickle down to the consumers. It’s better to look elsewhere.

Michelle Couch-Friedman

Hopefully you paid with a credit card or your travel insurance covered insolvency. If not, look at other options. With the Vantage Travel bankruptcy, the company that bought the customer list was generous and extended $110 million in future credit for all victims. This generosity isn’t common, but it turned out better than normal for customers. Many customers didn’t see that as so positive because they hadn’t been through a bankruptcy before and didn’t know what could expect. Everyone wants the refund. But if the company had money to refund them, they wouldn’t be going bankrupt.

How to Protect Yourself

Booking travel with a company and having that company go bankrupt can be a catastrophe. Think about the Life at Sea Cruise, a year-long cruise along the world. Some people sold property in order to go, only to be abandoned in Rome halfway through when the company ran out of money. You have to take steps to protect yourself and your investment.

Protect yourself against such a catastrophe … even if you know the company very well, even if you have full trust in the company, do some googling.

Michelle Couch-Friedman

Go online and see if there are any reports about this company. Is anyone talking about warning signs or indications that something might be going wrong? Also watch out for one of the biggest red flags of a company in financial issues: Really cheap trips. If $3,500 couldn’t buy you a business-class flight to Europe, how can a tour company be offering two weeks in Egypt with business-class flights and food included for that price? Be suspicious. Compare the same or similar trips with other companies, too. If the $3,500 trip is listed on other sites for $15,000, something is wrong.

Never pay with a bank transfer. The Fair Credit Billing Act only protects you if you pay with credit card. The discount you get for a bank transfer isn’t worth giving up that protection. Always insure your trip, too. Sometimes people think that they don’t expect to get injured or sick so they don’t need travel insurance. But it also protects against things like if you get sick or injured on a trip – most domestic health insurance won’t cover you abroad. And make sure there’s a clause that protects you against insolvency with or without bankruptcy.

Read the Fine Print

A lot of customers don’t realize that you have ten to fourteen days after you purchase a travel insurance policy to read through it thoroughly and make sure it covers everything you want covered. People often buy the insurance, assume they’re covered, and don’t read through the documentation. But travel insurance policies come in all shapes and forms. Some have minimal coverage. Some cover you if you cancel for any reason. There’s a spectrum.

If you have a preexisting condition, for example, make sure that’s covered. Your travel insurance may cover illnesses and other problems generally, but many specifically exclude and do not cover illnesses or anything associated with a preexisting condition. If that’s a coverage you need, you must specifically select and pay for it. And as previously mentioned, many policies also exclude cancellation if a company becomes insolvent or bankrupt.

Read the fine print, even if it’s twelve pages long … it could be the difference between getting $30,000 back from a trip to getting nothing.

Michelle Couch-Friedman

Read your policy, know what you’re covered for, and make sure it’s what you need to be covered for. More expensive policies cover more. And insurance doesn’t protect you against everything. But it’s important that you know and make sure you have the coverage you need and expect.

Learn more about Michelle Couch-Friedman and Consumer Rescue at consumerrescue.org. If you need help, you can use ethe Get Help button to reach out to Michelle and her colleague Dan, or use the Ask Meera option to get contacts to reach out to yourself. All of Consumer Rescue’s help is always free.

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