Warning, Con Artists--the Authorities Aim to Punish

Con men, said Mike Spinelli, president of the American Society of Travel Agents.

Scamsters, pronounced Ed Perkins, editor of the Consumer Reports Travel Letter.

Dream-stealers, proclaimed Arthur R. Weiss, an assistant attorney general for the state of Texas, trumping his colleagues.

Who is it that has Spinelli, Perkins and Weiss so annoyed? A small and evil minority of travel vendors who use underhanded methods in their efforts to sell you your next vacation. Operators of travel-related fraud schemes, federal officials estimate, take more than $12 billion yearly from the pockets of American consumers, and in a new campaign to punish alleged outlaw companies, federal, state and county officials have joined to target 20 of them. To no one’s surprise, California and Florida are the most prominent states in the list of accused scamsters’ addresses.

These facts, figures, accusations and warnings were sounded March 13 by a chorus of ASTA officers, law-enforcement officials and journalists, who gathered in a Los Angeles hotel for the organization’s 10th annual Conference on Travel Fraud.

The idea of the conference is to help consumers separate dubious enterprises from the thousands of legitimate companies in the burgeoning travel industry. Among the practices criticized most thoroughly: telemarketing pitches; vacation-certificate offers; time-share presentations; and the oft-challenged promises made by a new breed of companies that have recruited tens of thousands of untrained “outside agents,” typically persuading them to part with $495 each in order to get access to discounts and benefits otherwise reserved for full-time travel industry professionals. Agents heartily applauded news of legal action against two such companies, which are known as “card mills” among their critics.

Throughout the day, there was much repeating of the consumer advocate’s mantra: If a deal sounds too good to be true, it probably is.

Speakers reminded consumers to ask prospective travel agents and tour operators for their California Seller of Travel registration number (state law requires it), and urged buyers to look for logos signifying membership in long-standing trade groups.

The legal actions were a coordinated campaign led by the Federal Trade Commission and conducted in 12 states. Between Feb. 26 and March 12, FTC prosecutors filed suits accusing five companies--including two in California--of separate deceptive activities that together may have relieved consumers of as much as $43 million.

FTC Associate Director Eileen Harrington said the actions followed an eight-month investigative effort, and amount to more FTC legal action in travel-related cases than the agency took in all of 1996. In each of the new cases, Harrington said, her office will seek redress for consumers and ban future deceptive behavior by the targeted companies.

The company facing the most legal action: Florida-based vacation-certificate and time-share firm Vacation Break U.S.A. Inc. (subject of a lengthy article in this section last April 21), which has been accused of wrongdoing by state officials in Connecticut, Illinois, Massachusetts, Vermont and Washington, along with district attorneys in California’s Ventura and Napa counties. Calls to Vacation Break’s offices last week went unreturned.

In Southern California, the FTC and state attorney general’s office accused World Class Network Inc. of Irvine (along with World Class Travel, L.L.C. of Calabasas) of selling travel-agent identification cards that failed to yield the discounts and earnings advertised by company officials. The government agencies sought and received a court order that shut down the company and put it under the control of a court-appointed receiver. Harrington asserted that “the structure of the enterprise is based on false promises.” At World Class offices, a telephone tape informs callers that the firm has been “temporarily closed” by the legal actions.

In Santa Rosa, the FTC accuses Design Travel operator Roger S. Dolgin of orchestrating a telemarketing operation in which operators pitched trips to Florida and the Bahamas, understating the true costs and overstating the quality of accommodations. In that case, the Sonoma County district attorney has made similar accusations, as have state officials from Wisconsin and Florida. Telephone messages left at Design Travel’s number went unreturned.

In addition, the California attorney general’s office also has filed suit in San Diego Superior Court against Irvine-based NU-Concepts in Travel Inc. and subsidiary Jetaway Travel Corp., alleging deception of consumers and operation of an “endless-chain” scheme of multilevel marketing. Messages left with NU-Concepts in Travel last week went unreturned.

The travel fraud meeting’s second resonant note was a pointed reminder by Perkins. Travel consumers every day are also misled and angered by the half-truths routinely told by some of the largest “legitimate” companies, he noted. Among the half-truths that irk Perkins most: airline ads that trumpet a low price, then in smaller print disclose that the big number is actually half the price of a round-trip ticket. Also, hotel ads that quote prices per person, rather than per room. And, any offer that pitches an extra day free with the purchase.

“Come on, folks. These things aren’t free,” Perkins said. “You’re paying for it. It’s in the price somewhere.”

Reynolds travels anonymously at the newspaper’s expense, accepting no special discounts or subsidized trips. He welcomes comments and suggestions, but cannot respond individually to letters and calls. Write Travel Insider, Los Angeles Times, Times Mirror Square, Los Angeles 90053 or e-mail chris.reynolds@latimes.com.