• The President of UOKiK imposed a fine of nearly PLN 5.3 million on InGroup International LLC.
• The company’s business model meant that purchasing a cruise through the www.incruises.com platform was only possible if financed by payments from other members of the programme.
• UOKiK determined that a significant portion of the money collected by the company was used to pay commissions for persuading new people to join the programme.

Proceedings conducted by UOKiK against InGroup International LLC (formerly InCruises International LLC) showed that the travel programme available on the website www.InCruises.com (also accessible to Polish consumers until 2023) violated the collective interests of consumers. Therefore, the President of UOKiK imposed a fine of PLN 5,280,388 on the company. Earlier, he had issued a consumer warning in this case.

Trips in a prohibited consortium scheme

InCruises.com is a travel programme operated by InGroup International LLC. The idea behind the programme (InCruises Travel Club) is to enable its members to purchase accommodation or trips on luxury ships at attractive prices. Participants in the programme accumulate funds by making monthly payments of USD 100. The money is converted into points within the programme – so-called Cruise Dollars (CD) – at a rate of USD 1 = CD 2, which can be used to purchase services available on the website, including a selected cruise.

The programme had certain restrictions. Under the terms and conditions in force until 1 April 2022, after one year of participation, users could only use 60% of the accumulated amount to pay for a trip; after two years – 70%; and 100% only after five years and after paying a total of USD 4,900. If a club member stopped paying the monthly fee, their account became inactive and they lost the ability to book trips through the www.incruises.com platform. After 12 months of inactivity, the member’s account was closed and the Cruise Dollars disappeared, unless it had been reactivated earlier by paying USD 100 for each month of inactivity. Joining the InCruises Travel Club was only possible via a referral link.

– In the case of the InCruises programme, all the conditions for recognising it as a prohibited consortium scheme have been met. InGroup, the company operating incruises.com, created a group involving consumers to finance the purchase of products. Moreover, it has full access to the money paid monthly by members of the InCruises Cruise Club. Purchasing a trip under the company’s “2 for 1” business model is only possible thanks to the contributions of other members. A scheme financed in this way may not be sustainable and may collapse – said the President of UOKiK, Tomasz Chróstny.

Members who bring in new members gain

An important element of the company’s business model is the recruitment of so-called partners, who receive payment for persuading others to join the programme. After inviting and retaining five new users who regularly paid their subscription fees, a participant became exempt from the monthly fee. Each member of the InCruises Travel Club could join an affiliate programme that enabled them to obtain financial benefits from building and maintaining a network of active users on the platform, in accordance with the applicable Remuneration Plan.

– InGroup’s business model is based on network marketing, which encourages partners to actively promote, sell, and expand the programme structure. It is they — rather than ordinary members who contribute to the scheme through their payments — who are the main beneficiaries of InCruises. During the proceedings, it was established that a significant portion of the funds collected by the company was used to pay commissions to Independent Partners, rather than to cover the cost of travel services for ordinary users – noted the President of UOKiK.

The proceedings concerning the practices of the company behind incruises.com have been ongoing since mid-2022. During this time, the company modified its operating rules and, since the end of March 2023, partners from Poland and other countries have been unable to sell to residents of Poland or to Polish citizens. The decision of the President of UOKiK is not final and may be appealed to the court.

What is a consortium scheme?

A consortium scheme, sometimes referred to as an Argentine scheme, is a method of collecting and managing consumers’ money within a group established to finance the purchase of products for its members. The products purchased through a consortium may include cars, flats, or – as in this case – cruise tickets. This type of activity constitutes an unfair market practice and is prohibited in all circumstances.

Such schemes were very popular in Poland 20–30 years ago because they enabled relatively quick access to expensive products. However, many of these projects were fraudulent in nature: their main purpose was to collect money from consumers, while the supposed purchase of desirable goods served merely as a convenient pretext and incentive to join. The real beneficiaries were those managing the schemes.

– It is no coincidence that consortium schemes are prohibited under Polish law. Many consumers have fallen victim to them in the past, and it was not uncommon for such ventures to be criminal from the outset, designed to defraud participants. Therefore, offers that seem suspiciously attractive should always be approached with caution. It is better to double-check how we purchase products, because if something seems too good to be true, it usually isn’t – warned the President of UOKiK, Tomasz Chróstny.