Investigation: Cruise startup French America Line took customer money, didn't deliver
Hundreds of passengers left in the lurch after cruise line cancels trips, withholds refunds.
Corrections & Clarifications: The story has been updated to include new information that Chase Bank has recouped its costs from the cruise company in Jim and Anita Sammon's case.
Jim and Anita Sammon were looking forward to the luxurious Mississippi River cruise they booked on a boat called the Louisiane, complete with four open decks, nightly live entertainment, a spa and gourmet dining from an award-winning chef.
The brochure from French America Line boasted of the riverboat's elegant French flair and a multimillion-dollar remodel. The Sammons thought shelling out nearly $10,000 for an eight-day trip seemed worth it.
But instead of Southern charm, the Mesa retirees got a rude awakening.
The company canceled and rescheduled their cruise four times over more than a year, offering a variety of excuses. Then, despite promising a refund, company officials ignored the couple for months, emails show, and didn't send a refund check.
The Sammons had to plead with their credit card company to reimburse them instead.
"I have taken many trips with different lines. Never was one canceled even once," Jim Sammon, 72, said. "They tied up our money for over a year and a half."
The snowbirds aren't the only ones who felt duped.
Three other couples told The Arizona Republic that their French America Line cruises were also canceled at the last minute, and they had to fight for months for more than $20,000 in refunds combined.
Hundreds of pages of financial records, email correspondence, legal documents, shipping records, government contracts, news clippings and interviews reveal French America Line canceled trips for up to 600 passengers; moored the Louisiane for more than 18 months, despite rebooking passengers repeatedly; waited more than a year to refund some customers, while forcing others to seek refunds from their credit-card and insurance companies; and is embroiled in multimillion-dollar lawsuits.
Customers demand investigations
Complaints about canceled trips and delayed or missing refunds are plentiful online against New Orleans-based French America Line and its California-basedpartner travel agencies, Uncommon Journeys and Train Holidays.
Passengers said they have filed grievances with the Louisiana and California attorneys general, the Federal Trade Commission and the Federal Maritime Commission, but have not seen action taken against the company.
"These are people you don't want to do business with," Sammon said.
The attorneys general would neither confirm nor deny complaints about, or investigations into, the companies. The Federal Trade Commission did not respond to a request for information. The Federal Maritime Commission said it has done as much as its limited authority allows.
The Better Business Bureau has revoked accreditation of all three companies.
Uncommon Journeys continues to take phone calls, operate a website and advertise vacation packages throughout the country by email despite the California Franchise Tax Board suspending its business license for failure to meet tax requirements and the Louisiana secretary of state revoking its business license for failing to file paperwork.
Company offers a defense
Christopher Kyte, the main owner and face of French America Line and reservations partner Uncommon Journeys, told The Republic via email that he was traveling and unavailable for comment.
French America Line CEO Duane Kendall Grigsby defended the company, saying events beyond the company's control caused the cancellations and that every customer was refunded "to the penny."
"We were beyond reproach on that," he said, although he admitted French America Line should have refunded some people sooner.
But in making that assessment, Grigsby revealed French America Line counted customers who were refunded by their credit card companies or travel insurance providers, instead of the cruise line, as taken care of.
He argued French America Line has exceeded industry requirements by offering passengers a free trip whenever the boat sets sail again.
"By the standards of the business ... I think we're pretty good," Grigsby said.
Trip after trip delayed
Company news releases and media coverage of the Louisiane promised an inaugural launch in August 2016. It didn't happen.
The next month, officials broke off the Sammons' eight-day reservation, citing hurricane travel restrictions, Sammon said.
Louisiana did experience historic flooding, though no hurricane, in mid-August. The governor's statewide emergency declaration was through early September.
The company rescheduled the Sammons for a 13-day voyage in October 2016, then delayed at the last minute again.
The boat couldn't be painted because of heavy rain and carpet shipped from Europe arrived late, officials told the couple in a letter. The Sammons rescheduled again.
The Louisiane made one complete voyage in late October 2016, according to Grigsby, and then a leak interrupted the second trip for 115 passengers.
A sewage tank flooded parts of the kitchen, lower floor and crew quarters, putting future voyages on hold, French America Line said in legal documents.
"Were it not for the incident with the 22 gallons of gray water and the vessel going out of service, it would have continued sailing in October sold out and would probably have people doing their second or third trips on it by this point," Grigsby said.
The Sammons' third rescheduled trip, 15 nights between Nashville, Tennessee, and New Orleans, was canceled less than a week before its November 2016 launch, emails show. Officials blamed the sewage-tank leak.
Dispute prevents return to the water
Once it was clear in spring 2017 that cruises on the Louisiane would not begin for a while, French America Line was "honorable" and stopped taking new reservations, Grigsby said.
"It was not in our interests or anyone's interests to have valued customers booked on something unlikely to operate. ... All it does is anger customers," he said. "There's no value in any way, in terms of reputation morally, ethically to constantly be offering the mirage of trips down the road without a blueprint for getting there."
But months after deciding the boat would not sail, French America Line still did not notify customers who had scheduled trips in the coming months, several customers said.
Although the leak was "minor," according to Grigsby, French America Line didn't quickly fix and relaunch the Louisiane because of an extended dispute with the insurance company over who would pay for repairs.
The snowballing effect from the insurance company dispute meant French America Line had to cancel extra trips and deal with additional costs such as payments to entertainers whose shows were canceled and lost advertising, Grigsby said.
The cruise line sued Lloyd's of London last month, alleging the insurance conglomerate prevented the boat's Mississippi River return by refusing to cover its claim.
Grigsby said he doesn't know why Lloyd's refused to pay for repairs. French America Line attorneys said in court documents that insurance underwriters claimed the boat was "unseaworthy."
The denial cost French America Line at least $4.8 million in damages and the loss of the boat's certificate of inspection with the U.S. Coast Guard, court documents filed by the company said.
The cruise line is now behind on payments to vendors, lawyers and crew members, has defaulted on multiple loans and has been "essentially ... involuntarily driven out of business," the company told the court.
Blaming hurricane victims
Each time the Sammons' trip was canceled, French America Line promised free upgrades and a future trip of any length for the original price, Sammon said.
"That sounded really good to us," he said.
But the third time, "it was like, 'Wow, this is kind of crazy,'" he said.
The Sammons agreed one last time to reschedule.
But as the couple packed their bags for their October 2017 excursion, the cruise company again told them the Louisiane would not sail.
The boat was "chosen as a headquarters for relief services," the company claimed, after major hurricanes hit Puerto Rico and other areas.
"While disappointed that we cannot operate her as a cruise vessel, we felt that some good could be done by playing a small part in the rebuilding of these devastated areas," the French America Line letter to the Sammons said.
The Louisiane, however, never helped victims in the Caribbean, Grigsby confirmed. The boat has been docked outside New Orleans since 2016, ship-location reports collected by VesselTracker.com show.
French America Line's agreement to provide housing to hurricane workers fell through, Grigsby said, because the agreement was with Whitefish Energy Holdings, a company whose $300 million, no-bid, government contract to repair Puerto Rican electrical lines was revoked after a media firestorm.
Whitefish Energy Holdings did not respond to a request for confirmation.
Another contract for the Louisiane to provide hurricane relief fizzled. A third is in negotiation for the still-recovering U.S. Virgin Islands, Grigsby said.
The revenue from a hurricane relief charter and a settlement with the insurer would allow the travel company to pay back its creditors, relaunch a massive advertising campaign and return the New Orleans excursions to their original grandeur, Grigsby said.
Attempts at a refund
After the last cancellation in October 2017, the Sammons decided they'd had enough.
They asked by phone and email for a refund two dozen times from October 2017 to January 2018,copies of emails and a spreadsheet of communication Sammon kept show.
"You have nothing to worry about since it was the cruise line that canceled the voyage," Uncommon Journeys Assistant Vice President Anthony Vargas emailed the couple on Oct. 24, 2017. "So you will not have any issues with regard to refunds. They just take a little bit to roll out to the credit cards or checks cut."
As time passed without a refund, Jim Sammon's patience ran thin.
"This is not normal," he wroteto the company Dec. 5, 2017. "Most businesses refund in just a couple of days. This has been a couple of months! I think an explanation is in order. Don't you?"
The Sammons finally got their money back 18 months after making their first reservation — not from French America Line, but from their credit card company.
Grigsby said French America Line does not owe anything to customers who received credit card "chargebacks." He did not respond to a request to clarify whether the company reimbursed credit card companies for the refunds.
Credit card companies sometimes eat the cost of a chargeback when customers prove fraud, defective products or services not rendered and the merchant refuses to pay the credit card company for the refund, national personal finance expert and consumer advocate Beverly Harzog said.
Credit card companies may also assess the merchant an additional fee, take legal action or refuse to process future credit card transactions from merchants whose customers request too many chargebacks, she said.
In the Sammons' case, Chase Bank spokeswoman Maura Cordova confirmed the credit card company did not experience a loss. Chase recouped the money it had refunded the Sammons by withdrawing it from the bank account of Train Holidays, the travel agency related to Uncommon Journeys and French America Line.
But if French America Line didn't reimburse all credit card companies for chargebacks that passengers received, the riverboat operator or its travel agency may have kept money paid by customers for uncompleted trips, while banks shouldered the cost to make passengers whole.
Similar couples in Prescott, California
Besides the Sammons, three other couples told The Republic that French America Line canceled their trips and didn't send refunds.
Some passengers lost additional money on airfare and precruise hotels, which the company's terms and conditions said it was not responsible for.
Each couple recounted dozens of phone calls and emails requesting reimbursement for cruise fares that French America Line and Uncommon Journeys ignored.
The travel company should have refunded customers in less than 60 days since there was no dispute that the cruises were canceled, Harzog, the consumer advocate, said.
"That would be the right thing for that cruise line to do," she said. "It shouldn't take 60 days for the merchant to work that out."
Richard and Nancy Shultz of Rancho Cordova, Calif., said they fought for at least four months for $18,000 in cruise fares. They finally received a chargeback from their credit card company instead of a check from the cruise line.
JoAnne Betti and Clyde Cicotte of Laguna Woods, California, said they received an offer from the company of 50 percent off a future trip, but no refund.
Prescott couple Debra and George Veit said they called, emailed and filed government complaints without success for six months after their cruise was canceled.
Debra Veit wasn't able to request a chargeback because when she first booked in January 2017 for a November 2017 cruise, Uncommon Journeys said it could not process a credit card transaction and requested the couple use a check, she recalled.
In March 2018, a week after Debra told the company she was talking to a Republic reporter about her trouble receiving a refund, Uncommon Journeys sent a check.
The company added an extra $200, officials said in an email to the Veits, "to buy you a nice dinner to atone for the epic delays with this refund."
"I don't know how they sleep at night, and I don't know how they're still in business," Veit, 67, said.
Veit's situation was a rare "comedy of errors," Grigsby said.
He did not respond to questions about why the company didn't immediately refund the Sammons, Shultzes, Betti and Cicotte.
Feds helped assure some refunds
By law, U.S. cruise lines are required to deposit money into escrow accounts held by the Federal Maritime Commission to refund customers for cancellations.
But if customers paid for trips through a travel agency, as many of the Louisiane passengers did through Uncommon Journeys, the law does not require them to receive escrow funds.
Grigsby said no matter who passengers booked with, "French America Line or AAA or Bob's travel agency in Amarillo," they received refunds from the escrow account.
Commission spokesman John DeCrosta confirmed that the agency worked with French America Line to pay out escrow funds to passengers but would not divulge the amount.
"The Commission believes that based on this reporting from French America Line, all passengers on the canceled voyages have received refunds through escrow, credit card chargebacks, or insurance payments," DeCrosta said in an email.
After questions from The Republic, the commission issued a bulletin encouraging passengers who weren't reimbursed to contact its dispute resolution office by calling 866-448-9586 or emailing email@example.com.
Grigsby estimated the company refunded about $500,000 total to 450 to 600 passengers out of the escrow account.
If that money had been divided evenly, it would add up to about $900 per customer.
Trip packages ranged from about $1,700 to $13,000 per person, with most packages coming in at $3,500 to $7,000 per person, according to brochures and interviews with customers. Although some customers may have paid partial deposits, others had already handed over the full fare.
Feds, Louisiana, others out money
Passengers weren't the only ones in line for payment from the company.
At least five vendors have sued French America Line and Uncommon Journeys for failing to pay more than $70,000 for goods and services, court records show.
There are also tax liens and judgments going back to 1998 against Kyte and his businesses French America Line, Uncommon Journeys, Train Holidays and their affiliate Great Northern & Southern Navigation Co., court documents show.
Other companies Kyte is affiliated with include The Great American Steamboat Co. and Riverlines Holding Co.
An additional $6.5 million in government loans is also at stake.
The U.S. Department of Agriculture's rural business division lent French America Line $5 million in 2016 to renovate the Louisiane.
The cruise line also received a $1.5 million loan from the Jefferson Parish Economic Development Commission to move the vessel to Gretna, a tiny city outside New Orleans.
That year, Louisiana Gov. John Bel Edwards praised French America Line for choosing the hamlet as its home port, claiming the company would bring 140 jobs and millions of dollars of investment to a depressed region.
"We welcome French America Line and their mission to help us tell Louisiana's story," Edwards said then.
Gretna Mayor Belinda Constant touted the company's promise to share revenues with the city to renovate a defunct ferry.
"This project will allow us to put Gretna at the forefront for opportunities of tourism," Constant said then.
The ferry renovations never happened.
The mayor did not return requests for comment.
Gretna Councilman Mike Hinyub, who was elected after the deal was made, said the cruise line hasn't generated the expected business, and the council doesn't know when it will.
"Everybody's waiting to see," Hinyub said.
Company still confident
French America Line's executives are confident the Louisiane will return to service in late 2018 or 2019 and become one of the most popular passenger cruises around, Grigsby said.
"I can't imagine any reason to give up," he said. "Hopefully, the people that had a voyage that was postponed or canceled will come along for a free trip. And that will ultimately be the test. If people sit down and have a great dinner with rack of lamb and bread pudding and hear great New Orleans jazz, that will be the ultimate judge of whether or not it's a pleasant and enjoyable boat."
Sammon said he no longer has faith in the company.
"At the last minute, they go ahead and pull the rug out from under you," he said.