Cruise Value Center agency went under...

[TennFan]

There is no remorse Richard and Ron Smith have done this so long they seem to think that theres nothing wrong!! email Ellen Creager at ecreager@freepress.com she is the travel writer that wrote the storys on COD and CVC.Also FOX 2 NEWS went out to there office

[TennFan]

They stopped mailing those catalogs after 9/11 cause they lost tons of money !!!

Cruises of Distinction relied on direct mailings and repeat customers where CVC was online!!!!Richard Smith spent all summer in NJ making changes to CVC!!!

[TennFan]

The company wasnt paying its bills in Michagan either

[hammybee]

Not sure that is exactly true. I think in the end, they are Agent to the Seller.

Any Real Estate Agents out there that want to weigh in? :)

 

 

Sail, I am a real estate agent. Real estate agency laws vary state to state.

 

Travel agency is a different animal. The term agency does not have the same definition as it does in real estate. All cruise line contracts make it very clear that the travel agent is not their agent. There are no federal definitions or laws governing travel agency.

 

Regulation of travel agency/sellers is at the state level. Most states do not have any regulations or bonding requirements. While seller of travel regulations vary from state to state, those states that issue licenses require registration, a nominal fee and compliance with some financial security regulation or statute, letter of credit, CD, bond or trust account. Typically sunch financial security is in the range of $10-25,000 per agency.

 

That this company held customer funds is not illegal, in most states. It's probably too premature to determine if fraud occured or not. It sounds as though those who used credit cards may be out some nominal OBC or a PG dinner. It's not clear if this becomes a bank recievable or if there are funds available to discharge obligations.

 

Those who paid by check or cash do not have the same protection. That this business has not filed for bankruptcy is curious. There is more to this story than is apparent.

[Jade13]

 

Those who paid by check or cash do not have the same protection. That this business has not filed for bankruptcy is curious. There is more to this story than is apparent.

 

There are people who paid by credit card who lost more than a "little OBC". These are the guests with the higher priced cruises. People who are within final now have to pay higher rates for their cruise and it is considerable. One person posted who is out about $2,500.00 and another who owes Cunard $16,000, who thought they were paid up (their additional cost is $8,100.00 as they can dispute one charge made to "CVC").

 

I don't know why they haven't filed for bankruptcy. I e-mailed the Smith brothers since someone provided their address and was surprised that I was contacted. According to the one brother, they want to pay their agents but have no access to any phone records or payroll. He stated he had no access to anyone's booking information either (or couldn't access his company computer system). He also told me there were multiple owners, and Jeff Kivet was still a part owner. Btw, he indicated he could not sign any agency release forms because there are multiple owners who would have to make that decision. Many cruise lines are not like Carnival, Princess, or HAL, or Celebrity, and will not release a booking unless the agency signs off to forgo any commission. Apparently NCL is in this group.

 

There is also confusion on the Sale date as one paper stated the company was bought in "September", but cruises were being charged to CVC as early as December 2007. Also, if Jeff Kivet was still there as a "Consultant" (the Smith brothers say he was still an owner), where was he 12 months ago when CVC started charging credit cards to themselves that cost them 3-4% in transaction fees and ate into the profits? It seems this practice started almost immediately after they got involved with the company (and definitely nothing to do with the economy).

 

Signing release forms to release bookings back to clients and agreeing to forgo any commission would help a lot of people out ASSUMING the cruise lines would allow clients to turn the bookings over to someone else even though it is unusual within final payment, or if they have full payment (CVC owed rebate checks to many people which was a percentage of their commission). As far as I know, the Smith brothers, are not agreeing to do this.

[Jade13]

The company wasnt paying its bills in Michagan either

 

Do they own anything? Or are their homes mortgaged and cars leased?

[Jade13]

Do they own anything? Or are their homes mortgaged and cars leased?

 

http://www.freep.com/article/20081122/FEATURES07/811220314/1032/FEATURES

 

The comment from former employee "JoblessNJ" also mentions Kivet as "Consultant" walking out one hour prior to his former employees being told they would be jobless. I agree with this former employee that something about this doesn't sit right. The Smith brothers state Kivet was still a part owner...

[hammybee]

Do they own anything? Or are their homes mortgaged and cars leased?

 

A corporation or LLC limits the owners' liability to the investment in their business. In some extreme and rare cases courts may hold the owners liable for the debts of the company, including judgments resulting from lawsuits. In legal jargin, this is called "piercing the corporate veil."

 

Courts pierce the corporate veil in situations where one or a small group of owners dominate the corporation or LLC under certain circumstances, sustaining undercapitalized operations with full knowledge that the company cannot satisfy its debts and/or fraud.

 

All of this assumes that the owners have assets. Speculation on my part, that it's likely personal assets, if any, are held in separate trusts or names to avoid potential personal liability.

 

It's too premature to tell what's really going on here. It might be a cash flow problem, employee embezzelment or owner fraud. It's possible some cruises were sold for less than cost. The possibilities are endless. The respective Attorney General's office (s) will need to wade through the muck to figure it out.

[hammybee]

 

There are people who paid by credit card who lost more than a "little OBC". These are the guests with the higher priced cruises. People who are within final now have to pay higher rates for their cruise and it is considerable. One person posted who is out about $2,500.00 and another who owes Cunard $16,000, who thought they were paid up (their additional cost is $8,100.00 as they can dispute one charge made to "CVC").

 

This suggests that in some cases, this company may have been selling cruises for less than cost. This happens when companies have cash flow problems and the intent is to make it up in volume. Sounds goofy, eh?

 

I am making the assumption that the credit card company will refund. Those consumers may be out the opportunity of sailing in a cabin that was sold to them at less than cost, unless the consumer is willing to make up the difference.

 

I previously reported that several years ago, I bought a cruise on eBay ( different and substantially smaller travel agency) at a too good to be true price. It was a pyramid scheme, whereby the travel agency's ability to pay for any given cabin cabin was dependent upon selling subsequent cabins.

 

I know with certainty that I paid less than the cabin cost. I got my cabin because I was suspicious from the onset, persistent and it was an el cheapo inside cabin on X that would have otherwise probably not been sold. Those who bought suites were not as fortunate.

 

The Cunard nightmare is a certified check thing, if I am not mistaken. That's most unfortunate. The whole deal is unfortunate.

[Jade13]

This suggests that in some cases, this company may have been selling cruises for less than cost. This happens when companies have cash flow problems and the intent is to make it up in volume. Sounds goofy, eh?

 

I am making the assumption that the credit card company will refund. Those consumers may be out the opportunity of sailing in a cabin that was sold to them at less than cost, unless the consumer is willing to make up the difference.

 

I previously reported that several years ago, I bought a cruise on eBay ( different and substantially smaller travel agency) at a too good to be true price. It was a pyramid scheme, whereby the travel agency's ability to pay for any given cabin cabin was dependent upon selling subsequent cabins.

 

I know with certainty that I paid less than the cabin cost. I got my cabin because I was suspicious from the onset, persistent and it was an el cheapo inside cabin on X that would have otherwise probably not been sold. Those who bought suites were not as fortunate.

 

The Cunard nightmare is a certified check thing, if I am not mistaken. That's most unfortunate. The whole deal is unfortunate.

 

I don't think this was the case. Use the example of the CC member who is now out $6,100.00. Suppose the World Cruise on Cunard (or part of a world Cruise) is $68,000.00 and the commission is 18% ($12,240.00. You should check my math). Now CVC has agreed to a 9% discount or $6,120.00. They would still be making $6,120.00. However they took this persons credit card, charged it to CVC and never paid Cunard. Now Cunard is looking for that full payment including the additional $6,100.00. My understanding is that CVC could pay directly to these cruise lines at the agreed upon rate and on-line where they just subtracted their commission.

 

Celebrity/RCCL only allowed OBC, so those passengers who are within final do not have that OBC posted. CVC also offered cash rebates. I know someone who went on Expedition and did not want $1,000 OBC, so they would have received a $1,000 rebate check. Luckily an agent they contacted first matched that rebate, which hopefully they are still getting.

[Jade13]

 

The Cunard nightmare is a certified check thing, if I am not mistaken. That's most unfortunate. The whole deal is unfortunate.

 

No someone posted somewhere he paid for a SilverSeas World Cruise by Certified Check.

[Jade13]

I just spoke to both the AG offices in NJ and Michigan. Michigan just heard about this on Monday after the AG's office in NJ contacted them. They stated they have 15 complaints so far but can't get in touch with the owners. They said if anyone had the numbers/Emails to forward to them but they can not take the info over the phone. It has to go by mail or through their on-line consumer complaints.

 

NJ thinks there will be a lot more problems as a Rep from one cruise-line told them that some passengers show up at the ship without a boarding pass (or get the pass at the ship - not sure if that is Carnival etc.?) and that is common. She may have been speaking of some European passengers/ships as well.

[cruise freak]

Get this one. The former owner was on the inaugural for the Solstice last week-end. Go figure. Why would X allow that? Nobody could figure it out.

[mstrc1]

Some people just have no morals and I guess the entire CVC did not phase him at all.

[Randyk47]

I would assume the invitation to sail on the Soltice came well before CVC closed. I only used CVC for my Holland America cruises but I'd guess that they also did a lot of business with Celebrity. You'd think Celebrity would have stayed on top of the situation and un-invited him but, on the other hand, the owners haven't been charged or convicted of anything at this point despite how we might feel about them.

[Scooters]

Hummmmmm..... Let's see if I can sort this out.

 

If they took our money and didn't pay the Cruise Lines before they went bankrupt, that might be considered to be bad business.

 

It they took the money, didn't pay the Cruise Lines, and still claim to be in business, that sure seems like Fraud to me. Either stealing from the customers or from the Credit Card companies!

[RlrCstr]

Did anyone else get something from the parent company?

I got this today in the post, and present it here as I received it.

 

Letterhead has a logo:

Travel Holding Entity Company

Cruises of Distinction/ Cruise Value Center

 

it came in an envelope from Cruises of Distinction

postmarked from Michigan on November 25

 

Tavel Holding Entity and its subsidiaries, Cruise Value Center and Cruises of Distinction have temporarily stopped taking new reservations.

 

When a company pauses there is always mis-information, and rumors...

none of which are true.

 

Rather than add speculation to an already very unfortunate situation, we would like to extend our greatest gratitude to the tremendous team of employees and independent contractors we have in New Jersey, Michigan

and elsewhere. We want to thank our great buisness partners who have taught and helped us much. Of course, we could not exist without our loyal customers. We do not know the future status of the company.

 

We wish you prosperity as we experience the Greatest Economic Challenge of the last 100 years.

 

Below this is the same as what is currently on the website, followed by

the best line of all:

You may contact us by U.S. Mail only...but there may be no one to answer.

 

Followed by addresses for CVC and C of D

 

The letter is unsigned.

[Scooters]

Yep, I got the same letter for our upcoming Carnival cruise.

 

It seems really, strange to me. Think about the person who isn't on CC and doesn't know what is going on... They are just waiting to board their ship in a few weeks......

 

1)We're not taking new bookings (we still aren't telling you that we kept the money that you paid for your cruise)

2)There is mis-information and rumors (rumors about what? Soooo, what is the truth?)

3)You should contact your credit card company, etc. (they still haven't said why you should contact them or that your booking is no-longer paid-for/valid).

 

These guys are really, really, detatched from reality. Hopefully, someone brings them back into the real world! Possibly their next statement should begin, "Yes, Your Honor...."

[ricok987]

Business is pausing? Pausing? What kind of business term is that?? You are either in business, or out of business-period. The reminds me of the electronics store "Crazy Eddie". They always had very low prices. But, the owner found a loophole. It seemed he could get away with (stealing) a lot of money-millions by overstaing inventories. By the time the authorities caught up with what was going on he was out of the country, and Crazy Eddie was out of business. Eventually, Eddie Antar was brought back to the US and gave a large portion of the money back and went to jail. I wonder where all the CVC money is...

[Randyk47]

They can pause all they want but as a past customer, and I always got good service from the old CVC, there's no way I'd ever book with them again. This type of business relies almost solely on reputation, there are virtually no assets or inventory that have value, and the CVC name is blackened forever. Whether or not they did anything criminal is yet to be proven and I'm guessing blaming the "economic situation" is their way of excusing their behavior which obviously ran the company into the ground.

 

PS - My first DVD player was from Crazy Eddie eight years ago at a significant discount. A friend of mine from New Jersey warned me that the company had some funny business practices, even hinting that some of their equipment "fell off the truck", but I was able to register the warranty so no problem. Just sold the player in a yard sale. :)

[mstrc1]

Good point David. Maybe the business is monkey business, as they have jerked everyone around in this process.

[Jade13]

Yep, I got the same letter for our upcoming Carnival cruise.

 

It seems really, strange to me. Think about the person who isn't on CC and doesn't know what is going on... They are just waiting to board their ship in a few weeks......

 

1)We're not taking new bookings (we still aren't telling you that we kept the money that you paid for your cruise)

2)There is mis-information and rumors (rumors about what? Soooo, what is the truth?)

3)You should contact your credit card company, etc. (they still haven't said why you should contact them or that your booking is no-longer paid-for/valid).

 

These guys are really, really, detatched from reality. Hopefully, someone brings them back into the real world! Possibly their next statement should begin, "Yes, Your Honor...."

 

I believe this person who posted on "Ask a Cruise Question" may have paid for a World Cruise by Cashiers Check (since on another site someone posted they were in the UK, paid for SilverSeas cruise for a 50th Anniversary and just found out the cruiseline was never paid). Maybe someone has advise. It is just unbelievable that a company would take about $60K from an individual and never pay for their cruise.

 

http://boards.cruisecritic.com/showthread.php?t=881989

 

http://freep.mlogic.mobi/news.jsp?key=357461&rc=fe

[ricok987]

I believe this person who posted on "Ask a Cruise Question" may have paid for a World Cruise by Cashiers Check (since on another site someone posted they were in the UK, paid for SilverSeas cruise for a 50th Anniversary and just found out the cruiseline was never paid). Maybe someone has advise. It is just unbelievable that a company would take about $60K from an individual and never pay for their cruise.

 

http://boards.cruisecritic.com/showthread.php?t=881989

 

http://freep.mlogic.mobi/news.jsp?key=357461&rc=fe

 

Well it just goes to show:

1. Never pay with anything but CC

2. After paying check with cruise line to make sure you have one of their booking valid numbers

3. Using travel agents puts you at risk more than booking direct with cruise line-no mater who the agent is-just another middleman/level where something possibly can go wrong

4. Finally, never assume anything, after all it is your money, your vacation on the line

[crusinanan]

ya know, over the past 5 years I always liked dealing with CVC, I feel bad for the employees of CVC too...I found a really good TA there and she has been effected by all this too. She was so helpful to me when this went down.

[Nyna]

I don't think this was the case. Use the example of the CC member who is now out $6,100.00. Suppose the World Cruise on Cunard (or part of a world Cruise) is $68,000.00 and the commission is 18% ($12,240.00. You should check my math). Now CVC has agreed to a 9% discount or $6,120.00. They would still be making $6,120.00. However they took this persons credit card, charged it to CVC and never paid Cunard. Now Cunard is looking for that full payment including the additional $6,100.00. My understanding is that CVC could pay directly to these cruise lines at the agreed upon rate and on-line where they just subtracted their commission.

 

Celebrity/RCCL only allowed OBC, so those passengers who are within final do not have that OBC posted. CVC also offered cash rebates. I know someone who went on Expedition and did not want $1,000 OBC, so they would have received a $1,000 rebate check. Luckily an agent they contacted first matched that rebate, which hopefully they are still getting.

 

 

Do keep in mind that cruiselines do not pay agencies commission on the entire fare. Commissions are not paid on taxes, port fees, plus a portion of what the cruiseline refers to as the "non-commissionable fare". As a former TA, I can tell you it was very common to receive commission on 50% (or sometimes even less) of the fares my clients actually paid.

 

This whole CVC mess is absolutely terrible and my heart goes out to everyone who is out of money, or any other benefits they were promised because of this.