Big, And Unfair, Discounts Through Travel-Agency List

Syndicated columnist Peter Greenberg co-produced a CBS investigation last Thursday on a widespread abuse in the travel industry. Here Greenberg explains how the scam works.

Two years ago, I was having dinner with Cleveland Plain Dealer travel editor David Molyneaux, and I told him I was working on a column about fraudulent airline tickets. Molyneaux laughed and said, "That's nothing. Look at this."

He showed me a recent piece his paper had done about Edward Richard, then the Cleveland Airport administrator. The newspaper had uncovered that Richard had received substantial discounts on air travel - 75 percent off his airline tickets. And how did Richard get the deals? He was falsely certified as a 35-hour-a-week travel agent.

Molyneaux told me that he suspected the Richard case was just the tip of the iceberg, that the abuse - getting discounts by posing as a travel agent - was nationwide and widespread.

And how does the abuse work? It all starts with the list, an annual form submitted by travel agencies to airlines and hotels, registering their employees. Once you're on the list, you're eligible for deals such as an "AD75" (agency discount, 75 percent off) ticket from an airline, a 75 percent discount from a hotel, and other deals from rental car companies and cruise lines. In theory, you can't get on the list unless you're a travel agent.

But since the travel agencies themselves supply the names on the lists, how do you know who is a travel agent and who isn't? The answer is, you don't.

I started checking. And Molyneaux was right. We had just touched the tip of the problem. Through airline and hotel sources, I tapped into a small avalanche of information. They supplied me with hundreds of travel agency lists, and almost immediately I discovered the fraud.

Who was on these lists? Doctors, lawyers, bakers, candlestick makers. One airline source even identified a priest who was listed as a full-time agent.

And it wasn't just WHO was on each agency list, but how many. In many cases, the numbers were staggering. Small agencies with barely enough desk space for six people were showing more than 80 people on their lists. Technically, each of these people could get discounts, although very few were actually entitled to them.

At a time when U.S. airlines are losing billions, and when the largest hotelier in this country is the Resolution Trust Corporation, the government agency given the mandate to liquidate or sell off bankrupt hotels, this scam takes on added significance. Why? Because it's revenue denied the airlines and hotels. It could be an airline seat or hotel room denied to you. And, ultimately, we all pay for it.

How it works

How does the scam work? Let's say you own a bona fide travel agency. And one day your car breaks. Your mechanic tells you it will cost you $1,500 to fix it. But instead of paying him the money, you offer to put him on the list. And, once you explain to him what the list is, and what it can mean for him, guess what? Your car gets fixed for free, forever.

It's not just the auto repairman. It's your uncle, your girlfriend, your lawyer or the guy who helped you with that real estate deal.

"It's rampant in our industry," says Nancy Bleiweiss, who owns Corniche Travel in Los Angeles, "because it's been allowed to get out of control."

Another travel agent, Anastassia Mann, who owns Corniche Travel in Beverly Hills, told me she was offered a $50,000 bribe from someone in the movie industry to get on the list. "It's got to stop," she told me, "because it's hurting all of us."

Indeed, most of the 32,000 travel agencies in the United States are run by honest, hard-working agents. And most are not rich. Travel agencies make an average profit of less than $14,000 a year. So why does someone want to be a travel agent? The perk of travel. It's what they get, but - it seems - it's also what many agents are giving, or selling, away.

One company, in La Jolla, Calif., has been investigated for allegedly selling spots on its list for $495. Its color brochure, which it mails to prospective "agents" who write or call, says that upon receipt of the $495 it will send you: an I.D. card with the agency's accreditation number, and a toll-free verification number to give out if anyone checks your I.D.

The company claims it can easily make you a fully accredited "outside sales" agent, adding that "nobody receives better travel discounts than travel agents!" The company claims it is not putting any of those who pony up the $495 on official travel agent lists.

Technically, this company may not be breaking any law or airline tariff, but there are those who argue that it is still part of the travel agent misrepresentation game as far as questionable discounts at hotels, rental cars and cruises - and its practice of selling the concept of making you "a fully accredited outside travel agent" for $495 calls into question the entire definition of who is - and isn't - a real travel agent, not to mention who should qualify for a discount.

The definition of who is a legitimate travel agent has become nearly impossible to achieve. And without that specific and rigid definition it's been virtually impossible to police the travel agency lists.

Hands-off approach

And, apparently no one in the travel industry has ever wanted to take the lead in pursuing the problem and stopping the rip-offs. No one wanted to be perceived as going after travel agents. (In fact, when I first checked with top officials of airlines and hotels, they denied there was a problem of people abusing travel agent privileges.) But gate agents, hotel desk clerks and other front-line employees told a different story.

"We have people coming up to the counter all the time flying on AD75 tickets and they're demanding a no-smoking seat between Los Angeles and Dallas," one airline employee told me.

"But it's been no-smoking for years, and certainly a travel agent would know that. When we ask them for I.D., they give us their agency's registration number. And we're under instructions from corporate not to alienate travel agents. So we board them."

To prove how easy it is to abuse the system, CBS asked a ceramic tiler from Norwalk, Calif., Paul Mastro, to help us.

With the assistance of Corniche Travel, Mastro was put on their agency list, and within two days he flew first class to Los Angeles, Chicago and Dallas, he stayed at four top hotels and rented cars - all at tremendous discounts.

In fact, "travel agent" Mastro flew first class for $531 (regular fare: $2,425) and stayed at hotels for more than 50 percent off. In some cases, because he was a "travel agent," he was upgraded to a suite. He was never denied a room at a hotel or a seat on a plane (even though one of his flights was overbooked and full revenue passengers were being bumped).

Ultimately, Mastro didn't really slip through the system. As CBS discovered, he became part of it. And slowly but surely, as the travel industry realized what we were doing, and how easily we had been able to do it, it began to acknowledge publicly what it had so firmly denied in the past - that the agency lists were being abused. Peter Greenberg's syndicated column appears occasionally in the Travel section. Send questions and comments to Peter S. Greenberg, c/o Travel Editor, Seattle Times, P.O. Box 70, Seattle, WA 98111.

COPYRIGHT, 1993, LOS ANGELES TIMES SYNDICATE