2 Area Firms Named In State Suit -- Travel-Voucher Program Is Linked To Hundreds Of Angry Consumers

Z The state attorney general hascracked down on two Seattle-area companies that allegedly swindled 611 consumers out of nearly $280,000 in a nationwide travel-voucher scam.

On Tuesday, the state sued Creative Marketing Concepts Inc. and Agent Trainers International Inc., which does business as ATI.

Creative Marketing Concepts, Inc. of Tukwila advertised low airline fares through a travel-voucher program. After customers paid for the vouchers, the company often could not provide the tickets on time, and couldn't make refunds.

ATI sold similar vouchers which CMC agreed to fulfill, according to the state's suit.

CMC owners, Teresa L. Jackson and Otis J. Alexander Jr., and John W. Atkinson, president of ATI, could not be reached yesterday for comment on the litigation.

In addition to travel vouchers, the state charged that CMC and ATI telemarketed $99 subscriptions to a nonexistent travel magazine. As a bonus, they offered "free" travel vouchers for two airline tickets to Hawaii. But the companies failed to disclose the vouchers could only be used if more than $1,000 in lodging was purchased from a specific hotel.

The companies also sold business-opportunity contracts for "marketing centers" to process orders for CMC products.

The state's investigation began last summer after numerous complaints about CMC rolled in from angry consumers across the nation.

The state received 111 written complaints but knows of 611 victims, said lead investigator David R. Hill.

There are 579 victims of CMC with losses totaling $264,563.50, and 32 victims who lost $14,937.50 to ATI, Hill said.

Restitution to consumers seems doubtful. "I don't know where the money would come from," Hill said.

In a written statement, Attorney General Ken Eikenberry said the operators had "violated clearly applicable state laws in their quest for consumers' money, which appears to have been spent to finance personal debts and lavish lifestyles."

The state's original case against CMC was filed Sept. 30, but not publicized as is customary in a high-profile consumer-protection lawsuit.

Hill said the suit wasn't given the usual publicity treatment last fall because the state was continuing its investigation trying to unscramble the relationship between CMC and ATI, and negotiating with CMC in hopes of reaching a settlement.

"It (the suit) could have been picked up at the courthouse," Hill said.

Also CMC had stopped selling travel vouchers so there was no compelling reason to alert consumers, Hill said, adding that CMC still exists but no longer sells vouchers.

Janet Reis, assistant attorney general who filed the suit and amended complaints, said the state's purpose is not to put the companies out of business, but to halt unlawful and misleading practices.

"In this case, I believe their whole scheme was unlawful," Reis said.

The lawsuit seeks civil penalties, restitution for customers and recovery of legal fees.

"I'm hoping to testify for the attorney general," said Harriet Bye of Tacoma, who lost $900 to CMC.

Bye's case was typical. On May 14, she paid CMC $900 for four vouchers to fly to a Tennessee convention. She said a salesman assured her she'd get the desired June travel dates and could trade in the vouchers for airline tickets.

The salesman promised a company representative would call before her departure date. No one did. Instead she called them an estimated 25 times and left messages that weren't returned.

Finally, Bye and her husband drove to CMC's office to demand their tickets. Bye said Teresa Jackson, CMC company president, told them she would get the tickets.

The next day Bye drove back to CMC. She was not allowed past the parking lot, nor given tickets. Instead employees called Tukwila police to remove Bye.

State law prohibits the sale of such vouchers if they are not backed in writing by an airline that will provide the trip. CMC did not have such backing, Reis said.

Reis alleges that the company is guilty of numerous "unfair and deceptive practices," including:

-- Failing to maintain a bond or a trust account for consumers' money, out of which refunds would come.

-- Selling $99 subscriptions to a nonexistent travel magazine and offered a "free" voucher worth two airline tickets to Hawaii. The company failed to disclose that the voucher could only be used if more than $1,000 in lodging was purchased from a designated hotel.

-- Signing three contracts to establish "marketing centers" through which orders for CMC products could be processed. These "business opportunities" were sold for fees up to $10,000, when the company had no intention of using the centers, the state said.