When Tour, Ticket Sellers Take the Money and Run

Every year, frustrated consumers lodge claims with a statewide agency that monitors the travel business. And every year, there is wisdom to be harvested from those complaints. Among the complaints of 1999, three lessons stand out.

* Avoid paying for travel with cash or a check.

* Just because a travel agent speaks your language and comes from your corner of the world doesn’t mean he or she deserves your blind faith.

* If your travel agent, tour operator or airline ticket discounter isn’t registered with the state as a California Seller of Travel--with a nine-digit number and a certificate on display in his or her offices--it’s time to ask questions or take your business elsewhere.

The source of these lessons is the California Travel Consumer Restitution Corp., a joint effort created four years ago by industry leaders and state government officials. The private, nonprofit organization, created by state legislation in 1995, is run by a volunteer board of four industry veterans, one state-appointed consumer advocate and a representative from the state attorney general’s office. It assesses fees of $100 to $200 annually on about 5,300 sellers of travel statewide. That money is held in a restitution fund (currently about $1.4 million) to be used to repay California consumers who can show they’ve been shortchanged in dealings with a properly registered company.

Who are the consumers?

Among last year’s crop, “a lot were people who shopped around like mad for cheap air fares, mostly international fares, found a consolidator, booked travel, sent a check and never got any tickets,” says Patricia Campbell, the president of the California Travel Consumer Restitution Corp. and a Northridge travel agent.

To register as a seller of travel, a company must disclose its ownership and show that it uses a trust account to protect consumer deposits. Under state law, virtually every company that sells travel to Californians is required to register.

Consumers can get restitution only if they bought the travel product in California from a California-based company. Claims must be filed within six months of the original transaction. Two regulations added in January 1999 require consumers to pay $35 with their claim (refunded if it’s granted) and to promise not to sue later.

Claims focus on businesses that have gone under and vanished while holding consumer deposits, Campbell says.

With a handful of 1999 claims still unresolved, the agency has granted 51 of 105 claims for the year, paying consumers $71,457, Campbell says.

In 1998 the agency granted 115 of 246 claims and paid $188,555. The new $35 filing fee figures in the decline, TCRC officials say, but is necessary because many out-of-state consumers were filing and hoping the agency would overlook their ineligibility.

The filings offer lessons for consumers.

The first lesson is how those consumers paid.

“I’m still surprised at how many people will send off a check to somebody just because they have a Web site or an 800 number,” Campbell says.

And then there are the customers who pay cash. By using cash or a check, consumers deny themselves a key weapon: the chance to stop payment (a “charge back” in business lingo) via the bank that issued their credit card (or via American Express). Consumers can generally challenge a bill within 60 days of purchase if they haven’t received the services they paid for, Campbell says.

Many businesses in the travel industry, especially the sellers of discounted airline tickets, called consolidators, survive on narrow profit margins. To save credit-card processing fees, those companies often offer discounts of up to 3% for paying by check instead of credit card. Whenever anyone asks me for advice, I say use a credit card, pay the extra 3% and sleep more soundly.

For the second lesson in the TCRC claims of 1999, look at the patterns of undelivered airline tickets and their destinations. El Salvador comes up repeatedly, as does the name Molina Travel on Mission Street in San Francisco.

Consumers filed 34 claims naming Molina--about one-third of all claims statewide. Most were filed to seek compensation for undelivered tickets for travel to El Salvador, says state Deputy Atty. Gen. Susan Henrichsen.

Molina was registered in 1998 as a seller of travel and was selling tickets as recently as summer 1999, Henrichsen says. But by late December, the company no longer maintained a listed phone number, and the TCRC had granted 17 restitution claims to Molina’s unhappy clients. Fifteen other claims are pending, many involving multiple travelers in the same family. Henrichsen estimates that the fund could end up paying for $20,000 in phantom tickets.

At the San Francisco district attorney’s office, consumer fraud investigator Laurel Pallock says Molina Travel is “actively under investigation,” but she did not offer specifics. The company could not be reached for comment.

It’s common for recent immigrants to use travel agencies with regional or national specialties; Los Angeles has many such companies. Some lead a tenuous existence. To find a reliable one, travelers need to ask questions: How old is the company? How does it accept payment? When will it deliver tickets? Where are its offices? Has the company registered as a California Seller of Travel? (If you have doubts, double-check the last of those answers by calling the state attorney general’s office; see the number below.)

It’s unclear whether those questions would have revealed problems at Molina Travel, Henrichsen and Campbell say. But such questioning can weed out dubious operators.

To check on a travel seller’s registration, contact the state attorney general’s office: telephone (213) 897-8065, fax (213) 897-8846. To request restitution claim forms, write to the Travel Consumer Restitution Corp., P.O. Box 6001, Larkspur, CA 94977-6001. (It does not have a phone number for the public.)

Christopher Reynolds 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 send e-mail to chris.reynolds@latimes.com.