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Travel nightmare: investigation continuing as PoL shuts down travel section of eBay store.

Jacques Raphael was among more than 1,000 customers who thought they were getting a good deal on travel vouchers through the Points of Light Institute's eBay store. The California man coughed up more than $2,100 in May for two first-class trips to New York and to Miami later this year.

Raphael uses eBay all the time and said he wouldn't normally have purchased something of such value but saw that a legitimate organization was selling them. "Not only can we get scammed but I guess other people, even a big-shot organizations, can get scammed," he said.

The Points of Light Institute (PoL) closed that area of the eBay store during the weekend of July 5-6 after "significant financial and operational irregularities" came to light, leaving more than 1,000 customers in the lurch. Those with travel plans originating before July 15 were to be fulfilled, but those after July 15 were to be refunded.

While he's hopeful of getting a retired from Points of Light, Raphael said he already purchased nonrefundable hotel reservations. "I'm not too happy about this whole thing but at this point, what am I going to do? If I found out about a lawsuit, certainly I would join," Raphael said, adding that he'll be out the money for hotel reservations unless he books his own flights, which he probably won't do. "The only reason I did this was because it was so cheap. I never would've made it, but it was so cheap," he said.

An engaged couple from Austin, Texas had to scramble for plane tickets to Hawaii for their destination wedding at the end of July. The groom-to-be, who did not want to be identified, said his fiance called him while at work crying inconsolably when she received an email about the situation.

Each PoL reservation is for one to four people, so as many as 4,400 travelers could be impacted. Sources told The Non-Profit Times that travel had been booked through May 2009 that could total more than $1 million.

LAW ENFORCEMENT CALLED

In a statement, the PoL, the recently rebranded merger of the Points of Light Foundation and Hands on Network, said "irregularities appear to be isolated to travel transactions at the eStore and based on financial and legal findings, we must suspend fulfilling ticket bookings, purchased through the eStore, for travel after July 15, 2008."

The goal is to refund customers within 30 days and begin refunds as soon as possible, Michelle Nunn, president and CEO of the PoL, told The NonProfit Times in an exclusive interview. But, that's based on the capacity to verify and process and fulfill them. How much it all adds up to is still unclear, she said.

"We're still getting the information via our refund process," Nunn said, adding that a second round of emails has gone out as part of direct, regular communication with those affected. Several donors and financial supporters have offered donations and financing to ensure Points of Light solves the problem and addresses it without "affecting the larger organization and ensuring no donated funds are directed toward it," she said.

Two senior managers learned of the irregularities through customer complaints, which they explored and ultimately verified through an independent contractor, and reported to Nunn on the evening of June 26, she said. Customers were notified of the situation late Friday, July 4, at which time the refund application process began.

Because of the ongoing investigation, Nunn could not elaborate on the type of "irregularities." She said the U.S. Attorney's Office in Washington, D.C., was contacted within 24 hours by the organization's counsel, McKenna, Long & Aldridge, which is doing its own investigation.

"It took us a number of days to wrap our arms around it and even discover the issues based upon this being an independent contractor's records and our having to try to interpret and understand the issues and to put a plan in place to address it," Nunn said. That included putting a call center in place (800-886-6304) and contacting customers.

The independent contractor was terminated "as soon as we learned of these issues," Nunn said. The contract was created and begun in 2003 as a program of the Points of Light Foundation, which merged with the Hands on Network last year. The independent contractor, Maria Herrmann, was a former employee in business development at the Points of Light Foundation, but Nunn did not know the duration of her employ prior to that.

Herrmann is no longer listed on the organization's Web site and calls to her cell phone and home phone were not returned. A woman answering the door at Herrmann's northwest Washington, D.C. residence told a freelance reporter working for The NonProfit Times, she could not help her and declined to say if she was in fact Maria Herrmann.

Despite thousands of tickets being sold, Nunn described the eStore as a "very small enterprise," grossing about $100,000 and netting $15,000 in the fiscal year ending 2007. She explained that the numbers "are the totals that were reported on our books and in our audited statements of Points of Light Foundation (pre-merger). The recent discoveries obviously do not align to these numbers and that is what is under investigation."

Nunn stressed that the eStore was operated on the MissionFish platform but it was not part of the MissionFish business unit of PoL.

GETTING PEOPLE HELP

Mitch-Stuart Inc., from where The eStore purchased travel certificates, is stepping up as a white knight to try to help those stranded, said CEO Stuart Paskow. "They have been a customer since 2004. They ordered them (travel certificates), we fulfilled," he said.

Paskow stressed that people who have already received vouchers have safe passage.

Michelle Cohen, president of Mitch-Stuart, said that "in cooperation with American Airlines, we are fulfilling orders through the July 15 cut-off date as determined by the Points of Light Institute."

Mitch-Stuart provided copies of letters of appreciation they have received from the travelers. "We are working as fast as we can to help Points of Light work through their problem and get these people taken care of," said Cohen.

The trips sold ranged in price from $399 to $1,099. There were a few trips, such as first-class passage to Hawaii, which went for more money.
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Title Annotation:AT DEADLINE
Author:Clolery, Paul; Hrywna, Mark; Donohue, Michele
Publication:The Non-profit Times
Date:Aug 1, 2008
Words:1053
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