A settlement with Key Tours International Inc. will resolve claims that it failed to honor the terms of its refunds in contracts with consumers who purchased vacation packages from the company ultimately cancelled due to the COVID-19 pandemic.
The settlement includes $12,838.15 in restitution, a claims process for certain consumers who file complaints within 180 days of court approval of the settlement, and civil penalties and attorneys’ fees.
“So many Virginians have had to cancel trips and postpone plans because of the COVID-19 pandemic, and they should not be financially penalized because of circumstances out of their control,” Attorney General Mark Herring said. “Companies must honor any refund policies in their contracts and my Consumer Protection Section and I will hold any companies who do not do so accountable. This agreement will make sure that any Virginians who had trips canceled through Key Tours International because of COVID get the refunds that they deserve.”
Herring’s Complaint alleges the Office received a number of complaints from Key Tours consumers that the company was not honoring the terms of its refunds in contracts with those consumers, and in at least one case made an offer in writing for full refunds less cancellation fees, and subsequently rescinded that offer.
The complaint further alleges by not adhering to the refund policy it had in place at the time when consumers made their purchases, and retracting its initial offer of refunds sent to consumers or their agent in at least one instance, the company violated the Virginia Consumer Protection Act.
To resolve Virginia’s allegations, Key Tours International Inc. has agreed to a prohibition against future unlawful conduct including failing to honor promised vouchers and credits to consumers or other written offers made to resolve disputes relating to cancelled trips, and has agreed to restitution, attorneys’ fees and civil penalties.
The settlement specifically requires Key Tours to:
- Pay $12,838.15 for restitution to consumers identified in the settlement;
- Provide additional refunds through a claims process to any consumer who files a complaint with the Attorney General within 180 days of court approval of the settlement regarding a trip cancelled or postponed due to COVID-19 not refunded in accordance with the consumer’s contract; and
- Pay $1,000 for civil penalties and the Commonwealth’s attorneys’ fees and be subject to a judgment of $22,500 for civil penalties and attorneys’ fees with all but $1,000 suspended so long as it complies with the terms of the settlement.
The settlement, in the form of an Assurance of Voluntary Compliance, has been filed for approval with the Circuit Court for the City of Fairfax.