Scammed Again

From the July/August 2010 issue of National Geographic Traveler

Travel cons are as old as the wheel. Why do we keep falling for them—and how do we stop?

You aren't stupid.

Let's get that out of the way first. You aren't ignorant, either. Or gullible. It's important to be clear about this, because any story about travel scams inevitably ends with a variation of this advice: You get what you pay for. That implies that you're not smart enough to know if something is too good to be true.

But the problem isn't you. Travel scams have been around since cavemen hit the trail and one pulled the first bait and switch. Scams are here with us now. The Federal Trade Commission (FTC) recorded more than 15,000 complaints related to travel, vacations, and timeshare plans in 2009. By some estimates, travel scams cost consumers untold millions or even billions of dollars. These crimes endure because scams are like viruses. Just when we figure out a cure, they mutate into a different strain.

For example: What if I offered you an airline ticket for a cent? Too good to be true? No. Spirit Airlines is selling a limited number of "penny plus" fares. BoltBus has a few New York to Washington, D.C., seats for a buck. Frequent fliers save up enough miles for a "free" award ticket to their favorite vacation destinations. Nothing is too good to be true, it seems.

With legitimate deals such as these around, is it any wonder that we fall for two-for-ones, free cruises, and other counterfeit offers? Or that we buy memberships in travel "clubs" for thousands of dollars in order to have access to bargains that are available online for free? Reader Hans Slatosch thought $5,593 was a reasonable price for membership in the Dallas-based Royal Palms Travel Club, because it would offer deep discounts on cruises and other travel products. Salespeople said all the right things in the presentation he attended, and before long, he imagined cruising the Caribbean or jetting to Europe at a fraction of the published price. After he got home, Slatosch researched Royal Palms online, only to find a lot of "very unfavorable" reviews. The company refused his request for a refund, so Slatosch reported it to the authorities. In March, the Texas Attorney General cracked down on the company, charging that its memberships had "little or no value." A Dallas court issued a temporary restraining order.

We need to distinguish between penny fares—which, though they come with a maddening amount of fine print, are strictly speaking not scams—and allegedly worthless travel clubs. It's really hard to tell the difference. The line between a legit deal and a fake has been permanently blurred.

There's plenty of blame to go around, starting with our laws. When it comes to travel, the government generally takes a hands-off approach to consumer protection. Spirit can advertise fares for little more than a cent because the Department of Transportation (DOT) refuses to tell airlines what to include in a ticket. Regulators won't set minimum standards for offering basic creature comforts (such as minimum seat size and amount of legroom). Hotels, cruises, and car rental companies are similarly under-regulated. Have a look at your state's lodging statutes for a good laugh. They protect not you, but the innkeeper. (Maritime law is even worse, spelling out the rights of the cruise line but not of the passenger.)

Law enforcement is relatively lax, too. Where were Texas authorities when the first complaints about Royal Palms began trickling in? The FTC runs a predictable, periodic, travel-related sting operation with catchy names like "Operation Travel Unravel" and "Operation Trip Trap." But other than raise awareness, it has done little to stop travel fraud. As for protecting air travelers from scams, here's a number to ponder: 40. That's how many staffers the DOT's Aviation Consumer Protection Division has to monitor the entire airline industry. You don't have to be a mathematician to know that they can't fight every battle for us with only 40 people.

And the downsized news media now has fewer watchdogs like me. The ones that remain are drawn to the easy stories about two-bit Mexican timeshare scams (guilty as charged) and write obliquely and politely about the big airlines and hotel companies that fleece millions of customers. You deserve better. Meanwhile, is anyone in Washington representing travelers in the legislative process? A fledgling organization called the Consumer Travel Alliance (of which I'm the pro-bono ombudsman) has pushed for changes such as truth-in-advertising rules and passenger rights legislation. But efforts like this take time and money, both of which are in critically short supply. "It would take a whole army of lobbyists to clear up the confusion about airline prices," says an exasperated Charlie Leocha, president of the CTA.

Travel scams will not end until every part of this system-wide failure is addressed: the laws, the law enforcement and regulation, and the watchdogs. Maybe the proposed federal Consumer Financial Protection Agency, which would take certain consumer regulatory responsibility of financial products from several other agencies and centralize it in one office, should be expanded to include travel products. Such an agency could protect the rights of travelers by quickly identifying fraud, making the public aware of the problem, and working with law enforcement to end it. Nothing like that exists on the federal level. Alas, as this column goes to press, regulation-shy lawmakers are being nudged toward a compromise that would downgrade the agency to the Consumer Financial Protection Bureau, stripping away some of its authority. Hey folks, wrong way!

The Internet does offer some powerful new tools to fight fraud. "It used to be that a dissatisfied customer would tell seven to ten people on average about a poor service experience," says customer-service expert Richard Hanks, author of the book, Delivering and Measuring Customer Service. "Now, they can tell many more people with new technology." A tweet, IM, or blog post can go viral, warning the masses away from a defective travel product (and giving scammers a dose of their own medicine). If you don't have legions of Twitter followers, you can still contact someone who does.

If travel fraud died a natural death, like germs exposed to sunlight, then travelers everywhere would benefit. It won't happen soon. There remain plenty of dark corners of the Internet for the bad guys to hide, and both the laws and law enforcement are often ineffective. We may never find a cure, but that shouldn't stop us from trying.