eCruiseStore.com Just Went Bankrupt

[phabric]

I was one of the customers of ECruiseStore that got an e-mail today. First time using a US internal agency.

 

I called Princess and they have my deposit but not the final payment I had made to ECruiseStore. Princess will not honour ECruisestore price.

 

It turns out that ECruiseStore used another agency as a host. I somehow had the host company on my Princess's file. I contacted them and they did not know about the bankruptcy until I called them. I sent all my invoices to them so they could check out my file. They too said that they would not honour ECruisestore price. The price has gone up a couple of hundred $ and I will loose $200 OBC.

 

Visa will dispute the charge so hopefully I will get my money back so I can use it for the final payment.

 

Today I received my full amount of the final payment I had paid to ECruisestore in June from Visa.

[Gonzo70]

Glad to hear at least some of you are being reimbursed via the credit card companies; that is good news. Hopefully the rest of you in this unfortunate situation will be reimbursed as well.

[snausman]

Today I received my full amount of the final payment I had paid to ECruisestore in June from Visa.

 

That is wonderful, glad to hear it.

[IandY]

Firstly, I truly hope that everything works out favorably for those caught up in this mess. It's sad that instead of the happy anticipation of an upcoming cruise, people are instead fighting with credit card companies to retrieve their money.

In regards to an earlier post, it is true that Canadians have greater protection in dealing with agencies, however; I would like to offer this information for my fellow canucks.

This a quote from a Globe and Mail travel article about the cruise compete website, updated April 7, 2009.

 

"Canadians should remember that if they buy a cruise through a U.S. agency, there is no buyer protection in case of default of the agency."

[triathlete]

Reading this thread I see some very strange opinions here. Consider:

 

The cruise lines allowed this agency to represent them and sell their product. When the agency went under, they took over the bookings, kept all the commission they would have had to pay to the agency, and yet they won't honor the invoice prices/onboard credits that their authorized agent sold.

 

So the answer is to book directly with the cruise lines? Strange.

 

If you pay for your cruise with a credit card and the money doesn't get to the cruise line, you just dispute the charge and you get your money back. The worst thing that happens is that you may have to pay the full cruise line rate instead of getting the discount you would receive from an agency. (The full cruise line rate being exactly what you would have paid if you booked directly with the cruise line).

 

This isn't the first travel agency to go out of business and it won't be the last. Each time this happens, everyone panics. Go back a year and look at the threads about Cruise Value going under. Early posts about "what a nightmare", later posts about "oh, I got a refund and rebooked." The only valid complaints are about cruise lines not honoring the prices (though I seem to recall that some lines did honor the prices--NCL, I think?).

 

The bidding site has--I don't know--100 agencies as members? 500? None of them have anything to do with the agency that failed. And while no one seems to think that the cruise lines with all of their resources have any responsibility to vette (is that how you spell it?) agencies allowed to sell their cruises, you expect some bidding site to make sure that none of them ever go out of business? Again, very strange.

 

Personally, I'm going to continue to use travel agencies, and I'll continue to shop around. I'll use the bidding site, and I'll also get quotes from agencies that advertise on Cruise Critic (i.e., the reason this forum exists). I usually save something like 10% on my cruises going this route, and I've never had a problem.

 

If I have to take a 1 in 1,000 or 1 in 10,000 risk that the IF the agency I book with happens to go under between my final payment and sailing that I will have to call my credit card company and pay an extra 10%, it's definitely worth the risk to save that 10% every time I cruise.

[cruiseco]

The cruise lines allowed this agency to represent them and sell their product. When the agency went under, they took over the bookings, kept all the commission they would have had to pay to the agency, and yet they won't honor the invoice prices/onboard credits that their authorized agent sold.

 

.

 

What complicates things even more is that apparently ecruisestore was booking at least some of the cruises under the name of a "host agency". In these cases the cruise line doesn't necessarily know that ecruisestore even exists -- as far as they are concerned the booking was made by the host agency.

 

What's a host agency? A small start up agency may choose to basically act as an outside agent for a more established agency to take advantage of things like higher commissions that can come from the higher booking volume the host agency does. Once they have made enough bookings to get those higher commissions on their own they will usually start making the bookings without the host. For example, one agency I know of does a ton of business on its own with the mass-market cruise lines but rarely has a booking with Seabourn so their commission is only 10%. So when a client books a Seabourn cruise they will book it through another agency (not really a host agency, the owner just happens to be a good friend of the owner of an agency that does a huge amount of Seabourn bookings). By doing this she now gets 15% commission and her clients get a bunch of extra perks that comes from booking through the other agency based on their volume).

 

Where this is a concern is that there is a cost to doing this -- the host agency will want a portion of the commission (anywhere from 2 - 3% of the 15% commission up to a 50/50 split). So when you see an agent using a host agency that is also offering the absolute lowest bid for your business with things like big discounts or OBC or other perks something is not going to add up. You can't give away 20% or more of your commission income upfront to your host agency and still be able to make those types of offers. Sooner or later you don't have the money to pay the bills.

 

If making a booking with an agency you're not familiar with it wouldn't hurt to contact the cruise line and find out the name of the agency that is officially listed as the booking agency. They're the ones you'd think are going to have to pick up the pieces if things go sour. But if you contact the host agency directly you'll probably find out that they won't accept any responsibility for anything the outside agent says or does.

[BadBoysDriveAudi]

Another reason to book direct with the cruise line.

 

Caveat Emptor.

 

I'd never' date=' ever give my money to an online travel agency.......[/quote']

 

I wouldn't be so fast to lump every online outfit with flaky scammers. There's a legitimate business reason to offering a completely online service.

 

That said, the OP needs to contact his credit card provider and explain the situation. At a minimum, you'll be out $50 as required by law...but generally you won't have to pay a dime. Most providers not only offer you protection against fraud but also against "services not rendered satisfactory".

 

So, first check with the cruiseline to see if your voyages were paid. If not, then call your credit card provider and go through the process.

[njmomof2]

As a TA with a large agency, I will often quote a price for a client on a cruise and can offer perhaps a small OBC (given the fact that the commission margin is low and the price may be very low). Often, that person will come to me and say "well, this on line agency is offering me $XXX OBC and free insurance and pre paid tips, can you match that?"

 

I cannot. I am straighforward in that regard, but given that the overall commission on a cruise may only be a couple hundred dollars, and most agents have a piece taken by their parent agency, these on line agencies are giving back just about all of the commission with these deals.

 

And then something like this occurs. People start saying to book only with the cruiseline, you will only be protected if you book with the cruiseline, all TAs are thieves. I have to tell you, I work hard for my customers and work to get them whatever savings are available (even if that means having to give back part of my commission). I will book ES on Carnival if asked. But I cannot compete with on line agencies. There is no way.

 

So before everyone starts running to the cruise lines to book because they think all TAs stink, maybe ask around for a recommendation for a real, live agent. Someone who lives in your area, someone you can sit and talk to, ask questions, get suggestions. I don't do this for the money, I do it because I love to travel and want people to have those vacations that leave lasting memories.

 

Not all of us stink. :(

 

ETA: I never, ever charge anyone's CC to my agency. We are not allowed and we have no mechanism for accepting those payments. We have your card charged directly to the cruiseline. So we never, ever touch your money.

[cruiseco]

 

ETA: I never, ever charge anyone's CC to my agency. We are not allowed and we have no mechanism for accepting those payments. We have your card charged directly to the cruiseline. So we never, ever touch your money.

 

There are some legitimate reasons for a TA to have a merchant account. For example, I used to organize and escort golf cruises. We would let the cruise line make the cc charge for the cruise fare but we had to dole out the money to the various courses for greens fees, carts, tee prizes, etc so the portion charged to the client for all of that went through our merchant account. But I can't think of any reason, short of a full ship charter which can be a whole 'nother thing, why an agency would give away upwards of 20% of their income ** to get their money a couple of months sooner other than cash flow problems.

 

** Say an agency is making 15% of the commissionable portion of the fare and the credit card fee is 3%

 

If the total fare is $1000 of which $700 is commissionable the agency makes $105 ($700 X 15%)

 

If the agency takes the charge on its own merchant account they pay a fee of $30 (3% X the full $1000)

 

That means in this example they're giving up 29% of their commission to get paid about 90 days sooner. I haven't figured it out but that's probably at least a 50% APR. Loan shark rates. How cash flow desperate do you have to be to pay a 50% APR?

[TMLAalum]

Today I received my full amount of the final payment I had paid to ECruisestore in June from Visa.

 

My Chase Visa is sending me the paperwork to dispute charges. They say that eCruiseStore has 30 days to respond. I pay my cc bill in full each month so I wonder how I will be reimbursed. Friends who have a Chase mc and were fraudulently charged 3400 in addition to the cruise prepay, did have the charges reversed today, but, alas, Chase didn't credit my account when I called yet again.

 

Carhoozer, are your Citicard charges permanently reversed or is there a chance you could be rebilled? I am glad to hear that the 60 day dispute deadline was not enforced because my Visa was charged on 7/20.

[triathlete]

There appears to be some (understandable) confusion about the 60-day deadline for disputing "billing errors" and reporting fraud.

 

There is no time limit on your credit company's liability for fraudulent charges.

 

Just for my own amusement, I googled "fraud protection" with the names of a couple of credit cards:

 

Amex: "Use the American Express® Card online or off, and you won't be held responsible for any fraudulent charges. Period.

No fine print, no deductible --just pure protection, so you can shop with confidence."

 

Visa: "Zero LiabilityShop anywhere with absolutely no risk. Your peace of mind and protection are paramount to Visa. Visa's Zero Liability policy is our guarantee that you won’t be held responsible for fraudulent charges made with your card or account information."

 

Mastercard: "With MasterCard's Zero Liability policy, you're protected from fraudulent uses on your account. You pay only for purchases that you have authorized on your MasterCard card."

 

 

Bottom line: as long as you use a credit card, your money is protected if a company goes out of business holding your money and you didn't receive what was promised. People will certainly be inconvenienced by this agency; some may have to pay a little bit more if the cruise line doesn't honor the original invoices/credits; but no cruiser should be out any serious money.

[sirwired]

There appears to be some (understandable) confusion about the 60-day deadline for disputing "billing errors" and reporting fraud.

 

There is no time limit on your credit company's liability for fraudulent charges.

 

Just for my own amusement, I googled "fraud protection" with the names of a couple of credit cards:

 

Amex: "Use the American Express® Card online or off, and you won't be held responsible for any fraudulent charges. Period.

No fine print, no deductible --just pure protection, so you can shop with confidence."

 

Visa: "Zero LiabilityShop anywhere with absolutely no risk. Your peace of mind and protection are paramount to Visa. Visa's Zero Liability policy is our guarantee that you won’t be held responsible for fraudulent charges made with your card or account information."

 

Mastercard: "With MasterCard's Zero Liability policy, you're protected from fraudulent uses on your account. You pay only for purchases that you have authorized on your MasterCard card."

 

 

Bottom line: as long as you use a credit card, your money is protected if a company goes out of business holding your money and you didn't receive what was promised. People will certainly be inconvenienced by this agency; some may have to pay a little bit more if the cruise line doesn't honor the original invoices/credits; but no cruiser should be out any serious money.

 

For AmEx, the big question is: is financial default fraud? I would think that it depends. Companies go bankrupt all the time, even when no fraud takes place.

 

If you look at Visa's site, they state in the fine print: "Covers U.S.-issued cards only. Does not apply to ATM transactions, PIN transactions not processed by Visa, or certain commercial card transactions. Individual provisional credit amounts are provided on a provisional basis and may be withheld, delayed, limited, or rescinded by your issuer based on factors such as gross negligence or fraud, delay in reporting unauthorized use, investigation and verification of claim and account standing and history. You must notify your financial institution immediately of any unauthorized use. Transaction at issue must be posted to your account before provisional credit may be issued. For specific restrictions, limitations and other details, please consult your issuer."

 

MasterCard's fine print: "Unauthorized use means that you did not provide, directly, by implication or otherwise, the right to use your card and you received no benefit from the "unauthorized" purchase." With eCruiseStore, it sounds as if many (if not all) people did provide these guys with the right to use the card, which would invalidate the protection. In short, the transactions were authorized, even though the merchant, in the end, did not provide the service.

 

It basically boils down to: ask your bank. That said, when Windjammer went BK, Chase Visa credited my account instantly, despite the cruise having been prepaid six months prior to the BK. However, most people affected by the WJ BK did NOT get their money back from their credit cards.

 

In conclusion, if you are within 60 days of your statement date in which the charge appeared, you are home free, no matter the issuer. Outside of that, it is up to the card issuer, each of which has their own policies.

 

SirWired

[Gonzo70]

There appears to be some (understandable) confusion about the 60-day deadline for disputing "billing errors" and reporting fraud.

 

There is no time limit on your credit company's liability for fraudulent charges.

 

Just for my own amusement, I googled "fraud protection" with the names of a couple of credit cards:

 

Amex: "Use the American Express® Card online or off, and you won't be held responsible for any fraudulent charges. Period.

No fine print, no deductible --just pure protection, so you can shop with confidence."

 

Visa: "Zero LiabilityShop anywhere with absolutely no risk. Your peace of mind and protection are paramount to Visa. Visa's Zero Liability policy is our guarantee that you won’t be held responsible for fraudulent charges made with your card or account information."

 

Mastercard: "With MasterCard's Zero Liability policy, you're protected from fraudulent uses on your account. You pay only for purchases that you have authorized on your MasterCard card."

 

 

Bottom line: as long as you use a credit card, your money is protected if a company goes out of business holding your money and you didn't receive what was promised. People will certainly be inconvenienced by this agency; some may have to pay a little bit more if the cruise line doesn't honor the original invoices/credits; but no cruiser should be out any serious money.

 

Though while intentioned, the information you provided is not really relevant to the issue on this thread. The policies you referenced are more related to if someone somehow obtains your credit card (or credit card number) without your knowledge or permission, and uses it (again without your permission). This is a different scenario/issue.

[triathlete]

Gonzo: I don't claim to be an expert on the legalities. However, it seems to me that if you give money to someone for the express purpose of their paying a cruise line for your cruise and they don't do so, then it's fraud.

 

But from a practical standpoint, on all of the posts I read about the Cruise Value bankruptcy I believe everyone who used a credit card was made whole. (It seems to me we would have heard about it if this wasn't the case?) Plus there are already posts in this thread about people getting money back after 60 days.

 

You may be right--banks may have some discretion. But I don't think so...

[Cahroozer]

My Chase Visa is sending me the paperwork to dispute charges. They say that eCruiseStore has 30 days to respond. I pay my cc bill in full each month so I wonder how I will be reimbursed. Friends who have a Chase mc and were fraudulently charged 3400 in addition to the cruise prepay, did have the charges reversed today, but, alas, Chase didn't credit my account when I called yet again.

 

Carhoozer, are your Citicard charges permanently reversed or is there a chance you could be rebilled? I am glad to hear that the 60 day dispute deadline was not enforced because my Visa was charged on 7/20.

 

TML: I disputed one charge online, and another on the phone. In the case of the latter I got an instant decision and it showed up on my CC bill as a credit 48 hours later. In the case of the online disputing, I followed up this morning, 48 hours after doing it online, and was told it had been decided in my favor and would appear on my credit card activity online in another two days.

 

I have no reason to believe that these reversals are not permanent. I pay off my bill each month as well, but I don't think that affects whether you can get the charges rescinded.

 

Good luck!

[cruiseco]

Gonzo: I don't claim to be an expert on the legalities. However, it seems to me that if you give money to someone for the express purpose of their paying a cruise line for your cruise and they don't do so, then it's fraud.

.

 

Years ago, an agency in our town went bankrupt after doing many of the things that ecruisestore is accused of doing. The cruise lines got together and elected me to clean up the mess.

 

In my dealings with the local Sheriff's Dept I was told that there's no law against any of this. The agency (lacking specific instructions to do otherwise from the client) can legally charge the client's card on its own merchant account. The agency can also legally keep the client's money in its own bank account for as long as possible before forwarding it to the cruise line. If the agency goes bankrupt while sitting on clients' money, well there's no law against being a bad businessman.

 

The Sheriff's fraud investigator and the DA of the fraud division both told me that it would be impossible to prove "intent to defraud" in that case. Screwed up bookings -- yep. Poor judgment -- yep. Poor management skills -- yep. Plain stupidity -- yep. None of those are criminal acts in and of themselves. They advised those who lost money (many were promised an additional discount if they paid with cash) to pursue a civil case with it's lower standard of guilt as they didn't have the proof necessary to prove criminal fraud.

 

I'm glad that the credit card companies seem to be stepping up and taking care of their clients but they have to be doing it on some basis other than "fraud" . Maybe they're doing it under some "this stinks to high heaven" provision.

[BadBoysDriveAudi]

[W]hy an agency would give away upwards of 20% of their income ** to get their money a couple of months sooner other than cash flow problems[?]

 

Your presumption is likely correct. In other forms, it's called "factoring" or "accounts receivable factoring". You essentially sell your accounts receivable at a discount in order to get your hands on necessary cash "now". It's not necessarily an indication of a failing business, but it's something you want to keep an eye on if you're an investor.

 

I think the perception of the general public is that "online merchant can sell me this cruise at X and you can't so you're not as good" is flawed and likely steeped in ignorance -- they just don't have all the facts to discern whether those deals from online merchants are shewd business decisions or unsustainable practices.

[BadBoysDriveAudi]

My Chase Visa is sending me the paperwork to dispute charges. They say that eCruiseStore has 30 days to respond. I pay my cc bill in full each month so I wonder how I will be reimbursed. Friends who have a Chase mc and were fraudulently charged 3400 in addition to the cruise prepay, did have the charges reversed today, but, alas, Chase didn't credit my account when I called yet again.

 

Carhoozer, are your Citicard charges permanently reversed or is there a chance you could be rebilled? I am glad to hear that the 60 day dispute deadline was not enforced because my Visa was charged on 7/20.

 

You may choose to pay your bill in full or pay in full "minus disputed items". If you choose the latter, there should be zero interest charges applied to your account.

 

The credit card merchant can take one of two options: they can reimburse your account immediately or wait until the matter is resolved and reimburse you then. Generally, they will reimburse you up front (will show online in a few days) and proceed with the dispute process. If it's determined that you *do* owe the money, they'll apply the charge back to your account.

 

If you call them, ask them for their specific business process. The phone rep should be able to tell you. They should also inform you what the expected period is for the reversal to show up online.

[Gonzo70]

Gonzo: I don't claim to be an expert on the legalities. However, it seems to me that if you give money to someone for the express purpose of their paying a cruise line for your cruise and they don't do so, then it's fraud.

 

It is only fraud if they never intended to pay the money over to the cruise line. It is not fraud if they held the money prior to final payment became due and went bankrupt prior to making the final payments. Hopefully people will still all get their money back (and the early reports on this thread are positive), but it is not because of fraud provisions.

[BadBoysDriveAudi]

Years ago, an agency in our town went bankrupt after doing many of the things that ecruisestore is accused of doing. The cruise lines got together and elected me to clean up the mess.

 

In my dealings with the local Sheriff's Dept I was told that there's no law against any of this. The agency (lacking specific instructions to do otherwise from the client) can legally charge the client's card on its own merchant account. The agency can also legally keep the client's money in its own bank account for as long as possible before forwarding it to the cruise line. If the agency goes bankrupt while sitting on clients' money, well there's no law against being a bad businessman.

 

The Sheriff's fraud investigator and the DA of the fraud division both told me that it would be impossible to prove "intent to defraud" in that case. Screwed up bookings -- yep. Poor judgment -- yep. Poor management skills -- yep. Plain stupidity -- yep. None of those are criminal acts in and of themselves. They advised those who lost money (many were promised an additional discount if they paid with cash) to pursue a civil case with it's lower standard of guilt as they didn't have the proof necessary to prove criminal fraud.

 

I'm glad that the credit card companies seem to be stepping up and taking care of their clients but they have to be doing it on some basis other than "fraud" . Maybe they're doing it under some "this stinks to high heaven" provision.

 

Exactly! These practices are legal business decisions so the term "fraud" doesn't apply here. The goal of such a practice is to use the money to generate interest income that (hopefully) would offset the steep discounts they are offering to their clients. It's a calculated gamble like any other form of investing. The problem is that sometimes you'll run into a handful of very stupid financial managers (don't mean to be harsh...that's just how it is).

 

The credit card merchants are not offering reimbursement under "fraud" per se; it's under the "received products/services in a satisfactory manner". If I purchased a lamp online and the merchant shipped it to me damaged, I could try to get a replacement directly through the merchant. If they balk, I simply call up my cc company, explain the situation and get reimbursed. The cc company will then go after the merchant to get reimbursed themselves.

 

Most cc companies offer this protection to their clients. If yours doesn't, make a switch!

[Blackrobe]

cruiseco, the difference between the situation you described and the eCruiseStore situation is the intent to defraud. The intent to defraud may not have been able to be shown in your situation but it is very clear in the situation with eCruiseStore. I submit the pattern of constant double billing using the excuse that the front office made a mistake shows a course of conduct. It is not a mistake when it appears to have occurred on almost every transaction. Likewise, there is no valid explanation for using the customer's credit card to falsify a charge under the name of another company 6 months after the original charge and within weeks of shutting down the business. Those activities display a course of criminal conduct with mens rea or criminal knowledge and planning. These are acts that are clearly able to be prosecuted and I sincerely hope that charges are brought.

[bobyng]

Another reason to book direct with the cruise line.

 

Caveat Emptor.

 

I'd never' date=' ever give my money to an online travel agency.......[/quote']

 

 

Always pay by credit card so you can dispute the charge. Booking directly with the cruise line does not help when the cruise line goes bankrupt. This has happened to me twice: once the cruise line went bankrupt and one the on-line travel agency went bankrupt. I paid for both cruises with my AMEX Platinum and when I called AMEX my account was immediately recredited in full. Also had an airline file bankrutcy, which AMEX recredited our account. We always book flights, cruises, and overseas travel with AMEX.

[Nickycar]

So very sorry you all have run into trouble there but for the Grace of God go I!! I would take the very good advice and contact the cruise company and the CC companies - good luck - hope you get it resolved. Heather

[sirwired]

For the folks on a regular deposit/final payment booking, most will get their money back, as final payment is not pulled outside of the 60-days-from-statement window mandated by law. (At least, this isn't the case with most cruise lines...) If eCruiseStore withdrew that money and never sent it on, the credit card banks should not put up too much of a fuss and will permanently credit the money, as long as you promptly and correctly go through all the proper hoops to file a dispute. This also applies for full prepaid bookings within the window.

 

If you pre-paid the full amount, and it went direct to eCruiseStore, AND you are outside of the 60-days-from-statement-date window, it is entirely up to the issuing bank if they want to refund your monies, as the law does not require refunding a dime outside of the window. I suspect their doing so depends on several factors:

a) your profitability as a customer.

b) the likelihood the bank believes they will be able to recover the money, either from the merchant (unlikely), or from the merchant's bank.

c) if the bank interprets this as fraud (which will refund you under the zero-liability policies) If I was a profit-starved bank, I would interpret the double-charges as unauthorized use, which they are, but the "legit" charges as simple financial default.

 

The double-charges should have already been in dispute... at least I know I wouldn't be arguing with any agency, no matter how much I liked them, for two months before disputing a bogus charge.

 

For all we know, these folks were trying to line up last-minute financing to keep the doors open and simply failed; that would put the "legit" charges into financial default category and out of fraud.

 

As I said before, when WindJammer Barefoot Cruises went under, most people were unable to recover from their credit cards. I did, and unfortunately I don't know why.

 

Again, no matter how the bank classifies the problem, if you are inside the 60-days-from-statement window, you have little to worry about other than exacting paperwork. If you are outside the window... well good luck.

 

SirWired

[billie5]

Blackrobe,

I do believe you are guilty of wishful thinking. The acts you list do not prove fraud. Many patterns of behaviour may not be good business practice, but that does not make them fraud. Double billing, no matter how often it occurred, is evidence of lousy bookkeeping, but not fraud (since the money was eventually returned, through the agency or the credit card company). You may have your suspicions that the double billing was intentional, but suspicions do not prove fraud. Nor has it occurred on almost every billing. That is just silly. Even if a few hundred people have indicated it happened to them, how does that get to almost every billing? I dealt with ecruisestore only once and had no problem. Frankly, although they had the lowest price on cruise compete, I do not recall why I used them, since I try always to do a quick Google check on on-line companies which I use, for cruises and for all other purchases. Perhaps I was just sloppy, since it should not have been very difficult to find numerous complaints going back a number of years.

 

Bill