Remarks from Noelle Nachtsheim
Director of Law Enforcement Services
National Fraud Information Center/Internet Fraud Watch
National Consumers League
At the Conference on Travel Fraud and Consumer Protection
Hosted by the American Society of Travel Agents and
The Alliance Against Fraud in Telemarketing
Washington, DC
March 29, 2005

Thank you very much for asking me to participate in this conference. My name is Noelle Nachtsheim and I am Director of Law Enforcement Services at the National Fraud Information Center/Internet Fraud Watch program at the National Consumers League.

In 1992, the National Consumers League created the National Fraud Information Center, the first nationwide hotline for people to get advice about and report telemarketing scams. Recognizing that many of the same scams were migrating to the Web, in 1996 NCL created the companion program, the Internet Fraud Watch, and a Web site, www.fraud.org.

Consumers can get advice about telemarketing and Internet fraud through our toll-free number, 800-876-7060, or by looking at the tips on the Web site. They can also report suspected fraud through the Web site or by phone. The information we receive from consumers about suspected scams is automatically transmitted electronically to local, state and federal law enforcement agencies in the U.S. and Canada. My responsibilities include setting the law enforcement agencies up in the system to receive the types of complaints they want, managing the database, monitoring the complaints, and analyzing trends.

Travel scams are usually in the top telemarketing frauds reported to us every year; in 2004 they ranked at #9 in the top 10. Travel complaints were #14 among the various kinds of Internet scams reported to us last year. The average loss in the telemarketing travel scams was more than $1,200.

Consumers most often pay by credit card or bank account debit.  As you can imagine, once a consumer has given out his bank account number and is defrauded, he has to worry about additional money being debited from his account in the future.  In some cases, consumers can alert their banks to watch for suspicious account activity, but other times they are forced to shut down their bank account altogether, which can be a major inconvenience.

Most of the consumers who reported travel fraud to our organization in 2004 were under the age of 60.  Many consumers with families find discount travel packages appealing when considering the travel costs of all of their family members.  The second most common group of victims was between the ages of 70 and 79.  Many retirees like to travel and make prime targets for crooks offering shady travel deals.

Consumers encounter fraudulent travel offers in many different ways:

• They may get something in the mail telling them they’ve won a trip and to call a number to claim their prize;
• They may get a phone call offering a free trip or a great deal if they join a travel club;
• They may respond to ads in magazines and newspapers, to emails, to banner ads and pop-up ads, and to text messages;
• They may also receive travel solicitations by fax.  In fact, our office occasionally receives unsolicited faxes offering spectacular vacation packages that cost next to nothing.

The problems they encounter also vary. Some seem like outright fraud, others involve unfair and deceptive practices. The most common complaints we hear are:

• I paid for travel services but they were never provided, and they won’t return my calls or emails;
• I got to my destination and found that they never booked my hotel;
• I was offered a free trip but found out I had to pay allsorts of hidden costs;
• I joined a discount travel club but it never provided the services I was promised or the deals weren’t as good as I was led to believe;
• I won a trip but none of the dates I wanted to travel on were ever available;
• I won a trip but they never told me that I’d have to endure a five-hour high-pressure timeshare sales presentation;
• They advertised a cheap price but asked for much more money later;
• The company took my money and disappeared or went bankrupt;
• The company refused to honor its money-back guarantee;
• They said the trip was free and asked for my bank account or credit card information for verification, but then debited or charged my account;
• They said the trip was free but got my bank or credit card information from someone else and debited or charged my account.

We have tips for consumers about travel scams on www.fraud.org in both the telemarketing and the Internet fraud sections. The telemarketing travel fraud tips are in both English and Spanish. We welcome your linking to our site or using our tips, with attribution, in any way you see fit.

In the tips, we warn about “free” or incredibly cheap trips – no one gives anything away, there’s always a string attached. We urge people to do their homework – to get information from a travel agent or other sources when they are planning a trip. We also advise consumers not to make an immediate decision when they receive an unsolicited offer.  When someone pressures a consumer to make an immediate decision, it’s usually a warning sign that something is not right.  Consumers are also warned to check for restrictions before purchasing a travel package.  They may find it difficult to find dates that are available and many travel packages expire after a year or so.  Consumers should also independently contact any third-party companies that are providing services, such as hotel and transportation, to make sure that they actually participate and will honor the terms of the package.  In addition, we encourage people to pay with a credit card because they can dispute the charges if they never receive the promised services or the services were misrepresented. This conference is a good opportunity for me to get ideas for additional tips that we might want to give consumers.

People have more choices for travel services than ever before, but sometimes more choices means more confusion. Consumers clearly need help to separate the good from the bad, the legitimate travel operators from the fraudulent ones. Travel fraud doesn’t just cause monetary loss – it takes a significant emotional toll on consumers, especially if they have been planning for years for that special family vacation. Thank you for enabling me to participate in this discussion about how to protect consumers from these scams.