Scam operators prey on bargain hunters with little chance of being caught

THE BALTIMORE SUN

When it comes to travel, almost everybody's out there looking for the best deal today. And don't the scum and the lowlifes know it.

In these lean economic times, gullible bargain hunters have been falling prey like never before to a growing number of outlandish and often outright fraudulent sales schemes for travel packages. The pitches generally are made through the mail, by phone or with a newspaper ad -- or a combination of these -- and they all have one thing in common: Those who get pulled in are bound to lose money, or, at the very best, get less, not more, than they bargained for.

More and more, the operations are run on 900 phone numbers, so the suckers get hit twice -- once when they pay up to $8 a minute for the phone call, and then again if they are deceived into actually buying the package.

Some immediate, important advice: If you see such travel come-ons with 900 phone numbers, anywhere, don't call and waste your money.

More important advice: If you see what looks like a travel bargain and you can't resist calling -- a 900 number, a toll-free 800 number, or just the normal phone number -- never, never give out credit card or bank account information. Some of these scammers are so slick they've been able to wheedle bank account numbers from the more slow-witted of their customers, and directly debit their accounts.

"They're all over -- everywhere," said Patricia S. Howard, a staff attorney in the marketing division of the Federal Trade Commission. "It's like trying to stamp out mushrooms -- the spores just scatter everywhere. You put one telemarketer out of business, and the people who used to work for that company all go off and start their own operations somewhere else."

Are we protected from these schemes? The answer: Not really. There are so many that it would be impossible even to identify a small fraction, let alone prosecute. Mail fraud laws, and state and local consumer statutes, are used against some flagrant violators, but often with the same result the FTC seems to achieve in many of its cases: The offenders are put out of business, fined and simply go to another state and start up again.

Perhaps the biggest impediment to cleaning up travel-related fraud is that the losses are relatively small -- maybe as little as $24 for a three-minute phone call, or a few hundred dollars expended on a worthless travel package. Embarrassed purchasers often remain silent about being bilked, refuse to prosecute or don't seek legal redress because the cost of hiring a lawyer is more than the losses they've incurred.

The thieves know this. They also know government prosecutors at all levels generally will be slow, if not reluctant, to act. After all, these are hardly Michael Milken or Ivan Boesky operations. Besides, some victims actually do get to take trips they've purchased, even if the trips bear little resemblance to the promises made.

Yes, to an individual, it may be relatively small potatoes. But multiply by thousands of victims and you can begin to estimate what the scam operators can make. Ms. Howard, the FTC lawyer, recently concluded a case against a now-defunct telemarketing company called Jet Set that operated out of Silver Spring. The estimated gross in a little over one year of operation: $4.2 million.

How do these scams operate? Let's look at the Jet Set case prosecuted by the FTC.

Jet Set (now out of business and not to be confused with many legitimate companies using the same name) sold by direct mail and through a toll-free 800 number. Like many of these phony solicitations, Jet Set masqueraded as an accredited travel agency, announcing to potential victims via a postcard that they had won anything from cash to a car to a free vacation, or a vacation "certificate of award guarantee" to a warm-weather destination -- Freeport in the Bahamas, Orlando or Hawaii. (Three tip-offs already: 1. Reputable travel agents almost never solicit in this manner. 2. There is no such thing as a free vacation. 3. The destinations are mass-market, where low-price hotel-air packages often are readily available.)

And when the suckers called, guess what? Yes, they'd won not the car or the money, but the "free luxury vacation," which, of course, just happened to have fees of $329 to $399 per couple, plus another $99 for taxes. And, further good luck: This was "a special promotion only for Visa and MasterCard holders."

Then came the hook -- the request for the credit card number, "just for verification," with a promise not to debit the account (even the dumbest of suckers is a bit wary by this point) until the customer received more details in the mail and had a chance to decide.

"They'll tell you anything," Ms. Howard said, "but in point of fact, as soon as they hang up the telephone, they are going to charge your account."

Then, she explained, the real song and dance began, because the trip was "subject to availability." The purchaser had to provide a choice of three trip dates -- usually at least 60 or 90 days in advance -- and, lo and behold, the dates often were taken and the purchaser had to select another three, and so on. By the time the sucker realized that this trip was never going to come off, the 60-day period allowed by most banks to dispute the credit card billing was past.

But to lend legitimacy to the scheme, some Jet Set victims actually got their "luxury vacation": A cruise (really a "six-hour boat ride," Ms. Howard says) from Fort Lauderdale, with a three-day hotel stay in Freeport in the Bahamas -- a destination that has absolutely nothing to do with the word "luxury." And the departure and arrival times for the cruise -- 8 a.m. and midnight, respectively -- almost certainly required an overnight hotel stay, at the sucker's expense, of course.

There are many variations on this scheme. Often, the scammers will promise free air fare to a far-off destination such as Hawaii, and then make the "free air" dependent on buying a hotel package that might cost $1,500 per person. The hotel, of course, ends up being one where the real room cost may be $50 a night for two. The result is that the scammer walks away with well over $1,000 in profit per sale, while the victims have paid double what they would have if they'd just bought an average air-and-hotel package to Hawaii from their neighborhood travel agent.

"The latest twist is using 900 numbers, so instead of calling toll-free to get ripped off, now you can pay to do it," said Art Weiss, assistant attorney general for consumer protection in Missouri, a state particularly active in prosecuting scammers. Mr. Weiss, who recently sued one "boiler room" travel telemarketing operation solely on the basis of an ad he saw in USA Today, said he -- and some other state attorneys general -- "have been given the freedom to be very active" in prosecuting travel scams.

The American Society of Travel Agents also has been conducting a major campaign against scams.

"I think people have a tendency to believe that nobody would ever call them up and tell them baldfaced lies and cheat them, but that's exactly what this amounts to," said Paul Ruden, ASTA's senior vice president.

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