ANNAPOLIS – The Maryland Court of Special Appeals ruled that Luskin’s Inc. mislead customers in 1992 when it advertised “FREE AIRFARE FOR TWO” with a purchase of at least $200 worth of appliances.
The ruling Thursday upholds the state’s Consumer Protection Division, which had ordered Luskin’s to give airline tickets or cash to customers who responded to the ad and reimburse those who had to lay out money to redeem the travel certificates.
That may be a problem, said an assistant attorney general who handled the case, because Luskin’s is under bankruptcy protection.
Luskin’s officials or their attorneys could not be reached for comment Thursday.
The ads, which ran on television and in print during the summer of 1992, offered free airfare for two to Florida, the Bahamas or Hawaii. Those who spent over $200 were promised airfare for two to Florida, those who spent over $300 were promised airfare to the Bahamas and those who spent over $400 were supposed to get airfare to Hawaii.
But a careful reading of the ad showed that in order to get the free airfare customers had to do much more than make the minimum purchase.
The fine print said that customers had to book their trips through Vacation Ventures Inc., that a minimum hotel stay was required, that the tickets had to be used within a year and that any taxes would be the consumer’s responsibility.
Court documents said the disclaimer was in fine print and that on the television ads, “even the fastest speed reader … probably could not have finished reading this statement before it disappeared from view.”
“You can’t hide material facts in a small disclaimer,” said John Nethercut, the assistant attorney general in the Consumer Protection Division.
Once customers made their purchase, they got a VVI brochure with a certificate for two free airline tickets — and even more restrictions.
Customers had to stay in a hotel of VVI’s choice for seven to 12 days and pay a non-refundable $15-per-person processing fee. They had to pick three dates when they wanted to leave and pay the balance of the vacation 45 days before their earliest departure date.
The prices were not guaranteed until VVI received payment in full, various fees and taxes were not included and certain “black-out” dates and other travel restrictions applied.
VVI got only 128 forms back from customers. Only 11 customers actually took vacations offered through VVI.
Luskin’s yanked the ad in July 1992 after the Consumer Protection Division said that it violated Maryland’s Consumer Protection Act.
The state said the ad mislead consumers “into thinking that they would receive free airfare when, in fact, they were given a travel certificate for a vacation program that would cost a minimum of `hundreds of dollars’ to redeem,” according to court documents.
The state also said that Luskin’s should have disclosed that the airfare was actually part of a vacation package offer.
Luskin’s appealed and a Harford County Circuit judge agreed with the company’s argument that the state had unfairly continued to press the case, despite an agreement not to do so after the misleading ad was pulled.
But a three-judge panel of the intermediate appeals court rejected those claims, saying the Harford judge erroneously substituted judgment for the agency.
Nethercut said that while the ruling may be of little help to Luskin’s customers, it should send a message other companies and prevent such practices in the future.