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"Free" Vacation? Hardly.

I am a "winner." At least that's what I'm told almost every day by the recorded voice on my answering machine, informing me that I've "won" a wonderful vacation package. Simply call back with my "winner code" and start packing!

Thanks, but no thanks. I'd rather be a homebound loser than a "winner" whose so-called prize is the opportunity to mail a cashier's check to claim my not-so-free vacation.

You can be sure that the 100-plus folks who shelled out a total of $144,000 for European vacations wish they'd hung up on the Connecticut woman who claimed she was arranging group tours that never took place. Same with Denver sports fans (including some police officers) who thought they scored a getaway package to the NFL's Pro Bowl in Honolulu, only to learn after arriving at the airport that they'd been duped.

At least the Connecticut con artist got 10 years behind bars. Too often, consumers see their vacation money simply disappear into the wind. According to an ABC News story, Americans lose $12 billion a year to travel scams -- and bogus offers are practically a permanent fixture on the list of top five consumer complaints.

Getaway gotchas
Travel tricks range from gimmicks that have you sit through a sales pitch to outright fraud. The most common of these scams is the contest that's just a ruse to get your personal information (to sell to marketers) or, worse, to take your deposit and disappear.

You're not in the clear once you reach your destination, either. Hidden costs are rampant. The most common include:

  • Travel deals or discounts requiring participants to sit through a pressure-cooker time-share presentation.
  • Discount-club memberships with more restrictions than a maximum-security prison.
  • Service fees for everything from the hotel to travel fees, port charges, and every little upgrade.
  • Penalties as severe as requiring you to pick up the tab for everything if you cut your trip short.

Not every discount travel offer is a rip-off, of course. Professional organizations such as the American Society of Travel Agents and the National Tour Association provide oversight on their members. (It's always a good sign if someone making contact with you is a member.) But before you put in for vacation days, learn the warning signs of a potentially disastrous deal.

Signs that spell S-C-A-M
Here's a handy rule of thumb: Anytime someone offers you a free vacation, there's a catch.

  • "You are a winner." Did you even enter the contest? Does the notification include any information whatsoever about the companies behind the promotion and those providing the prizes?
  • "Special offer." There's a big difference between winning "a four-star fab getaway" and "a four-star fab getaway offer." The word "offer" is a big clue that more charges will follow.
  • "Subject to availability." This one smacks of bait and switch -- the accommodations provided often bear no resemblance to that serene scene on the promotional materials. Also beware of monstrous blackout dates and other restrictions.
  • "Major airline" or "popular hotel." Demand specific names. It's a major red flag when providers get couched in vague language like this.

Even if the offer passes these tests, don't pack your bags just yet. It's time to do a little background research before you're cleared for takeoff.

Check out that travel deal 
Don't feel rushed to accept an offer until you've had time to check it out. (For one thing, read the Federal Trade Commission's tips on telemarketing travel fraud.) That goes double for sending a deposit to reserve a spot. Many fraudulent operators employ delay tactics, such as requiring partial payment for a trip that's months away, to give them time to do their dirty work. As the departure date draws near, travelers may find that the business has disappeared and any charges placed on a credit card are no longer eligible to be disputed.

Get everything in writing -- from the travel dates to hotel and transportation companies to cancellation and refund policies. Price out the exact trip you're being offered to see whether the deal is for real. And initiate contact with the businesses that are part of the package to verify that they are participating in the promotion. Don't just take it on faith that the firm is indeed partnering with MGM Mirage (NYSE: MGM  ) or Las Vegas Sands' (NYSE: LVS  ) Venetian, or else you could end up eating your vacation meals from a Motel 6 vending machine.

When it comes time to pay, once again, initiate contact yourself, and use the credit card that offers the best fraud coverage and dispute resolution.

Trust your gut. If the offer feels iffy, it probably is. And remember, sometimes the best travel deal is the one that you cobble together yourself. (Use this cheap travel cheat sheet for cost-cutting getaway tips.)

Score a free vacation for real
More than half of all credit cards come with a loyalty component, such as frequent-flier miles and points. But bagging any free travel, hotel stays, and goodies has also gotten much more complicated in the past year.

You've got to be smart about playing the points game. In this month's issue of Motley Fool Green Light, which goes live on Wednesday, I cover the new rules of rewards cards and offer tips from a resident rewards travel guru on snagging the best seats to the best places. (She's scored tickets to Africa -- twice -- as well as India and China, and she says Starwood's (NYSE: HOT  ) program is a must.) Grab a free 30-day trial for access to at least $450 worth of money-saving, moneymaking, hands-on tips. 

Dayana Yochim keeps a magnifying glass handy so she can make out the fine print on everything from travel deals to credit cards to brokerage accounts to mortgage deals. It also helps her see to pluck her eyebrows. As the co-advisor for the Motley Fool Green Light investing and personal-finance service, she offers tips on finding bona fide deals. (Sorry, no eyebrow-shaping tips. Except this: Don't over-pluck.) She owns shares of none of the companies mentioned in this article. The Fool's disclosure policy is ready for its close-up.


Read/Post Comments (1) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 20, 2013, at 1:34 PM, barbie15fletcher wrote:

    These timeshare deals usually come in the form of mandatory sales presentations that last anywhere from 90 minutes to several hours in some circumstances. These free weekends aren't all bad though. You will get a chance to tour the resort (or you should; if a salesperson meets you in a restaurant with a few rough drawings - beware).

    Before embarking on a free weekend, however, be prepared. Their goal is to get you to buy a timeshare on the spot. You will probably be pressured to some degree. If the weekend stay isn't worth the high pressure sales, remember you can always leave - but it is possible to simply enjoy the weekend and leave without having purchased a timeshare at the end. This is a good article about timeshare deals and promotions:

    http://www.timesharescam.com/blog/162-timeshare-deals/

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