State Penalties Faced by 3 O.C. Travel Agencies

Three Orange County travel agencies face thousands of dollars in penalties and lost revenue as part of an ongoing state crackdown on travel sellers who have failed to pay into a mandatory consumer protection fund.

The state attorney general’s office has obtained a court order forcing Santa Ana-based America Travel, Four Sisters Travel of Fullerton and Huntington Beach-based Discovery Unlimited Tours & Travel Inc. to register under the California Sellers of Travel Act and to contribute to a restitution pool.

The agencies also were ordered to stop selling tickets and travel packages for at least 10 days while they complete the necessary paperwork to comply with the law. The travel agencies can remain open but will have to line up a registered travel agency to issue tickets for clients during the ban.

The state won the orders Thursday and Friday in Orange County Superior Court as part of a stepped-up effort to get travel sellers to comply with the 1996 law, which was designed to protect consumers from travel fraud.

“We’re trying to get the recalcitrant people to register and send a message to the industry that it’s better to come to us than for us to come to you,” Deputy Atty. Gen. Michael Hughes said.

Compliance has been a problem, with only about 5,300 of an estimated 8,000 travel sellers bothering to register so far.

But Orange County agents hit in the latest crackdown say they weren’t even aware of the new law, and they decry what they see as heavy-handed tactics by state officials.

“This whole thing has made me hysterical,” said Patricia McEwan, a partner in Four Sisters Travel. “They are trying to put me out of business.”

Instituted Jan. 1, 1996, the California Sellers of Travel Act was an attempt to bring credibility to an industry rife with scams estimated to cost consumers nationwide about $12 billion a year.

Under the law, every travel agent, tour operator, ticket broker or other California-based travel seller who collects money from the public is required to register with the attorney general’s office, spell out specific terms of its travel packages and meet state requirements for handling customers’ funds.

The law also requires travel sellers to kick in an initial $200 per sales location, plus periodic assessments, to finance the $1.2-million restitution fund established under the new law.

More than $323,000 has been paid out of the fund to satisfy consumer claims.

Although only “a few dozen” of these suits have been filed so far, Hughes said the attorney general’s office intends to pursue more of them in an effort to turn up the pressure on unregistered travel sellers.

“We gave people warning letters and warning phone calls and we have done publicity campaigns,” Hughes said. “It isn’t as effective in getting their attention as filing suit is.”

But McEwan says she first heard of the Sellers of Travel Law last week when the attorney general’s office called to inform her she was being sued. McEwan says she wants to pay what she owes, but feels that being forced to stop selling travel for at least 10 days is too harsh a penalty.

Ditto for Raul Rios, owner of American Travel.

“It surprised me,” Rios said. “I’m an honest person. I’ve worked hard to make a good reputation. I just didn’t know.”

Diane Embree, president of the Travel Consumer Restitution Corp., which oversees the restitution fund, says she has empathy for the agents’ plight. But only so much.

“There has been an enormous amount of publicity about this in the travel industry,” Embree said. “If they didn’t know about it, I don’t know where they’ve been.”

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How to Avoid Travel Trouble

Only about two-thirds of the state’s travel agencies have registered under the California Sellers of Travel Act, which went into effect Jan. 1, 1996. The act requires sellers of travel services to register with the state, spell out specific terms of travel packages and meet state requirements for safeguarding customers’ funds. The law also requires agencies to pay into a state fund that will repay travelers who lose money in travel scams. As a consumer, you can protect yourself from fraud in these ways:

1. Don’t do business with a company providing air or sea travel (or tour packages that include either) unless it is registered with the state. Agents covered by the Seller of Travel law have a registration number (often called a CST number) and must use it in all advertising and promotions. Ask to see a current registration certificate.

2. Make any check payable to a travel seller’s trust account. Unless exempted, travel sellers are required by law to have a trust account or bond to ensure the safety of your money. Information regarding the account/bond must be disclosed when or before you pay. If the seller is exempt, the registration certificate will say so.

3. Ask to see the seller’s current travel consumer restitution fund receipt. Only transactions that include air or sea travel with a registered travel seller participating in the restitution fund are covered.

4. Carefully check all travel documents to make sure that what you paid for is what you want. For example, all airline tickets list “not valid before” and “not valid after” dates; make sure they square with your plans and any itinerary you have been provided.

To request a claim form if you have lost money in a travel transaction, write to the Travel Consumer Restitution Corp.:

TCRC

P.O. Box 6001

Larkspur, CA 94977-6001

Source: California Department of Justice

Los Angeles Times