Travel Company to Pay Back $3 Million

World Class Network Inc., an Irvine-based travel company shuttered in March as part of a nationwide crackdown on travel-related fraud, has agreed to abandon its multilevel tactics and reimburse more than $3 million to consumers.

The settlement with the Federal Trade Commission and the California attorney general’s office will allow the company to resume selling its travel agent tutorials, but not in the freewheeling style that triggered lawsuits from those agencies accusing World Class of operating a pyramid scheme.

Monday’s settlement was hailed by state and local law-enforcement officials as a major victory in their battle against travel fraud, estimated to cost American consumers more than $12 billion a year.

“This is a very strong resolution for consumers,” said Greg Staples, a Los Angeles attorney with the FTC. “We recovered the greatest amount of money we could and have obtained strong provisions to safeguard the public.”

World Class and its principals admitted no wrongdoing as part of Monday’s settlement.

Scott Warren, the company’s attorney, said his clients are pleased with the settlement and are eager to reopen the business, which has been shuttered since March.

“The company bent over backwards to avoid a long, protracted legal battle,” Warren said. “They want to show they are legitimate and get back in business as soon as possible.”

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Monday’s settlement requires World Class and its principals to pay $3 million immediately into a fund to reimburse many of the 51,000 consumers who may be dissatisfied with their purchase of at-home travel agent kits. More than half that amount will be paid by World Class Chairman Daniel Dimacale and Secretary Denise Dimacale.

If claims exceed $3 million, state authorities will be able to garnish 10% of the company’s revenues for up to five years to satisfy purchasers’ demands.

In addition to the consumer restitution, the company also has agreed to pay $500,000 in civil fines to the state. The settlement also forces World Class to revise its travel tutorial kit and ban the company from using multilevel marketing methods to sell that product.

“This will prohibit them from forming another pyramid scheme where the bulk of income comes from recruitment instead of the sales of a product,” Staples said.

And World Class must set up a 90-day “cooling off” period to protect consumers from high-pressure sales tactics. During that time, new purchasers of the travel tutorial would be prohibited from becoming travel agents or distributors, giving them a chance to become familiar with the program before putting any more money into the network.

The order would also force the company to give dissatisfied customers their money back--100% within 45 days of purchase and 90% from 46 to 90 days of purchase.