Jet Set Travel, a Silver Spring-based telemarketing firm that sold more than $1 million in travel packages a month, has closed its doors, throwing 125 employees out of work and leaving scores of consumers with questions about their travel plans.
The 15-month-old operation recently used two shifts of telephone sales representatives to market a 10-day travel package for two that included a six-hour cruise from Florida to the Bahamas and hotel accommodations for $398.
According to employees, the firm sent postcards telling consumers they had been selected to receive a luxury vacation. When customers across the country called a toll-free 800 number, they found that the trip was not free and that to qualify they had to give their credit card number over the phone. Jet Set Travel then charged $398 to the credit card, the employees said.
The Montgomery County Office of Consumer Affairs said yesterday that it has been investigating complaints about the company since late spring. Under Maryland law, consumers must be sent a contract so they can see what they're getting before their credit card account is charged.
Customers also were upset because they believed they could get a refund if they were not satisfied with the package, according to consumer affairs investigator Nellie Miller. What they actually got were "travel credits" for other trips, she said.
"We're telling consumers if they've booked trips, they should call the hotel or cruise line to see if they have reservations," Miller said. She added that consumers who don't want the package should write their credit card company telling them the firm has gone out of business and they want the charge taken off their account.
Mark Blum, an owner of the company and its president, made frequent trips to the Cayman Islands, including a trip during the holidays, several employees said. Blum said through a representative that he had no comment on the company's closing.
"There are too many loose ends," said a company official, who was identified by other employees as director of marketing Howard Siegler. "We do want to tell our side of the story, but we have to wait until it won't complicate matters."
A number of Jet Set employees, including the general manager, said that they believed that customers who purchased the travel packages recently would be able to get travel services they paid for because vouchers had been purchased through Passport International, a travel package wholesaler. But others weren't sure.
"It all sounds nice, but it doesn't follow that because they bought them through Passport they're going to get protection," said Paul Ruden, an attorney and senior vice president of the American Society of Travel Agents. "If Passport has been paid, they may be in a position to deliver."
Passport International officials could not be reached for comment.
The past year was one of the worst years ever for the travel industry, and the economic situation seems to encourage unscrupulous operators, said industry officials.
"Looking ahead ... there's going to be a tendency to offer people extraordinary deals," Ruden said. "It's a ripe environment for people to offer things that just aren't possible."
Jet Set employees said the firm's phone lines went dead Wednesday. Then employees were told by Blum that the firm was closing immediately and that he was unable to pay their salaries and bonuses, but would attempt to do so within 48 hours.
Yesterday, 20 or so employees waited in the lobby of the building where Jet Set's offices are located, hoping to be paid, but to no avail. Some were owed as little as $200, some as much as $2,000. Turnover at the firm was said to be high during its short existence.
"We were grossing between $1 million and $1.3 million a month," said Paul Carmody, former general manager of Jet Set. "Somebody made off with a lot of money."
Blum told employees on Wednesday that he was shocked when Madison Bank of Maryland informed him there was trouble with Jet Set's account because of a large number of credit card "chargebacks," a situation where the card holder disputes a charge and refuses to pay it.
Jet Set sold about 3,300 travel packages in October and more than 2,000 in November, according to sales supervisors.