Hobbit announces plan to give out refunds

  • Article by: SUZANNE ZIEGLER , Star Tribune
  • Updated: January 21, 2010 - 10:13 PM

About 2,400 customers lost money when the travel agency closed its doors last month. Refunds will be issued "to the extent possible."

Hobbit Travel tried to dig out from its public relations nightmare Thursday, announcing that it has set up a procedure to help get refunds for customers who lost money when it abruptly closed its doors last month.

Customers who are unable to get a refund from their credit card company or who paid with cash, check or debit cards can contact its staff via e-mail or phone starting next week.

In a statement detailing the plan, owner George Wozniak apologized and said the company will do its best to "help those customers who are caught in the middle and are out money without having received the travel services they purchased."

But Hobbit, which left customers only with its website listing vendors' phone numbers since closing, is not making any promises: It indicated that a third party has been set up to help customers get refunds "to the extent possible." The Minneapolis agency did not say how much money is available but indicated that about 2,400 customers are out money.

Hobbit spokesman Jon Austin said Thursday night that the refund money is coming from "the assets of the company" and that he doesn't yet know how much will be available.

"Some of the funds that we're using depend on payments we have yet to receive," he said.

Citing financial difficulties and the economy, Hobbit shut down on Dec. 22, leaving thousands of customers scrambling on their own to see if their trips were still on. Since then, the company has been skewered on websites and blogs, including one on StarTribune.com.

Many of the 100 people who contacted the Star Tribune said they're upset because the company took their money up until it closed its doors and even sent out e-mails advertising their discounted vacation packages until the end.

Asked if pressure from those comments prompted Thursday's announcement, Austin said: "No. It's an effort to set right the hardship that we caused by making the decision to shut down. I think we'd be doing this if nobody had spoken a word about it. It's the right thing to do."

In most cases, it appears Hobbit had paid the cruise lines but not Sun Country, where Wozniak has been a board member and investor. Many would-be travelers ended up paying again to reserve seats and crossed their fingers that they could get a refund from their credit-card company.

But refunds have been out of reach for many because they paid for their trips outside the 60-day window that credit-card companies generally allow for disputes.

"Something is better than nothing because I'm expecting nothing," Doug Erickson of St. Louis Park said when asked about Hobbit's plan. In August, Erickson's mother-in-law paid Hobbit in full -- about $10,000 total -- for the 10-person cruise on Feb. 28. Hobbit paid Norwegian Cruise Line, but not Sun Country. When Hobbit shut down, Erickson paid Sun Country $3,400 out of his own pocket so everyone could still go on the trip.

In the days after Hobbit closed, Sun Country was inundated with phone calls from customers left without a way to get to their ports of call. Spokeswoman Wendy Williams Blackshaw said more than 6,000 Hobbit customers had seats booked on Sun Country when it closed. The airline rebooked most of them at the same fare Hobbit had been given, she said, though many ended up paying twice.

Erickson said he has filed a complaint with the Minnesota attorney general's office, which has declined to say whether it's investigating Hobbit Travel. Austin said he was not aware of any investigations.

Many Hobbit customers who contacted the Star Tribune said they have gift certificates -- many for $500 or more -- and wondered if they could ever use them again. Austin said those people should contact the company as well. Hobbit has temporarily recalled a number of its staff to help with the refund process, according to the Thursday announcement, but it will not be accepting reservations or staffed for walk-in business.

Suzanne Ziegler • 612-673-1707

  • HOW TO SEEK A REFUND FROM HOBBIT TRAVEL

    Customers who cannot get refunds from their credit-card companies or who paid with cash, check or debit card should call 612-338-8880 or e-mail customerservice@hobbittravel.com. The phone will be staffed Monday to Friday from 9 a.m. to 4 p.m. beginning Monday.

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