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Today we announce "Operation Trip-Up," a law enforcement and consumer education campaign to alert American consumers about the breadth of travel fraud that threatens to take off with their vacation dollars. Travel fraud comes in many more packages than it used to and it can turn a much-anticipated dream vacation into a frustrating and expensive nightmare. The scams we see range from the run-of-the-mill vacation certificate telemarketers and timeshare resellers, to emerging variations of travel fraud involving flights pitched to immigrants, and a new type of scam called the travel agent "credential mill."

Today I represent both the FTC and the 12 states who joined the FTC in Operation Trip- Up, under which we have brought three dozen law-enforcement actions against companies operating from locations across the United States. With me today is Detroit-Michigan resident Aatif Aquil [ah TEEF ah KEEL], who was solicited by one of the defendants in the FTC cases, and who lost $3,000. Mr. Aquil will tell you his story in just a moment.

Consumer complaints about travel consistently rank among the top five categories in an FTC-Attorney General complaint system, and annual losses to travel-related fraud are estimated to exceed $12 billion. The goal of Operation Trip-Up is to ground those scam artists who are pitching a substantial number of deceptive travel offers, and to warn consumers about the many different types of travel scams that they need to avoid today.

The case the FTC has brought against Design Travel and Roger Dolgin is typical of those involving travel or vacation certificates. Dolgin allegedly operated a nationwide network of telemarketing boilerrooms which used a whole host of methods to solicit likely purchasers. They gathered names from booths at local fairs and carnivals where consumers were invited to enter a contest to win a free vacation. They sent unsolicited faxes to people at work, and direct mail pieces to their homes. And they placed cold calls. The telemarketers told consumers that they were part of a group "specially chosen" to receive a vacation offer, an often-used approach to make consumers believe the offer is very limited. In fact, in these types of cases, the consumers are not part of any special group, and all they’re getting is the chance to PURCHASE -- not win a vacation that, in all likelihood, is not anything like the luxury trip they were promised.

Consumers in the Design Travel case complained of undisclosed fees amounting to hundreds of dollars, vermin-infested hotels and a luxury cruise that turned out to be a simple ferry ride. People who tried to get a refund rarely got it on time and, often, not at all.

The timeshare reseller case also is typical -- it involves a promise that, for lots of up front money, a firm can sell your vacation timeshare or campground membership for an agreed-upon price. The new twist is the promise of a vast European market for American timeshares. Don’t believe it -- there is not much of a market to speak of for timeshares. Consumers who were victimized in the Gold Crown Express scheme lost between $200 and $4,000 each.

In another case, the FTC alleged that World Class Network offered a tutorial kit, including a travel agent I.D. card, that purportedly would allow purchasers to take advantage of the discounts and upgrades that hotels, cruise ships and airlines frequently offer to travel agents in order to solicit their business. Consumers who purchased the World Class Network kits purportedly would be able to operate an at-home travel agency as well, according to our complaint. But many travel industry members don’t recognize the World Class Travel identification card, so they wouldn’t give consumers the promised discounts and upgrades. We also understand that travel industry members are growing more concerned about these "credential mills" and many are instituting requirements that travel agents sell a certain amount of travel at non- discounted rates before they offer agents their discounted and upgraded packages. In this particular case, the FTC also alleged that, given the inadequacy of the training kits and lack of support from the company, consumers really could not open and operate a travel business. As a result, few if any consumers achieved the earnings promised by the defendants.

One more case is worth mentioning because the FTC is seeing a growing number of scams that target immigrants. In the "Your Travels and Tours" case, the defendants allegedly advertised low-cost airline tickets to international destinations in newspapers targeted to Indian and Ethiopian immigrants. Consumers were required to pay up front, but the tickets never arrived, and most were unable to obtain refunds, at least not in time to make the flight they had arranged to travel on. In short, either their planes took off without them, or they had to pay a premium price for airfare because they didn’t book their alternative flight in advance. Mr. Aquil will tell you about his experience with this company in just a few moments.

This post card I have here is part of our Project Trip-Up consumer education campaign, a joint project with the American Society of Travel Agents. ASTA, the U.S. Tour Operators Association and the National Tour Association have joined with the FTC to distribute these; we also will be distributing to consumers a number of brochures describing the various types of travel scams out there today. You’ll find them in your press packets. These also are available in travel agents’ offices, and on the web sites of the FTC and ASTA.

As you look at these brochures, you will see that our most universal advice for consumers is this:

  • Buy vacation travel only from a business you know;
  • Get the details of your vacation and any refund policy in writing BEFORE YOU PAY;
  • Be wary of prepaying for multiple years worth of vacation travel or lodging; and
  • Remember, timeshares, campground memberships and travel club memberships are expensive and NEVER should be purchased as investments.

Next, you will be hearing from Aatif Aquil, who was concerned enough about the fraud we targeted in the "Your Tours and Travels" case to tell you about his own experience.

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