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

December 15, 1991|By Knight-Ridder News Service

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."

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