Efforts to regulate the travel industry in Washington have encountered turbulence barely a year after legislation intended to curb abuses took effect.
While officials pursue civil and criminal charges against businesses accused of defrauding consumers, the industry is preparing a bill representatives say will fine-tune existing statutes.
They agree there have been problems, but say the vast majority have been created by a handful of travel clubs and certificate sellers out to rip off the unwary.
The offenders book just a sliver of the $2.5 billion in airline tickets, hotel reservations and other business handled by travel-service providers each year, they say.
But several Spokane-area residents were among consumers who submitted more than 1,000 complaints about travel service providers to Washington officials last year.
Retiree Harry Pupo said he tried for weeks last summer to confirm condominium reservations made through a Great Escapes distributor in the Spokane Valley called Vacation Marketing, also known as Royal Holidays.
Frustrated, he sought a refund of his $624 membership fee. In September, almost three months after he joined the club, and never having received anything from Great Escapes, Pupo got his money back.
“There wasn’t anything you could pin them down on,” he said, adding that he still gets promotional materials from the company.
An answering machine that picks up calls to Royal Holidays was not accepting any messages last week.
Royal Holidays is not licensed with the state, Department of Licensing spokeswoman Suzanne Taylor said last week. But depending on how the company sells its products, that may not be a violation of state law, she added.
Idaho does not license travel agents.
The industry’s complexity is one of the factors that foils the formulation of simple answers to its problems. Traditional, storefront agents and tour operators have been joined by clubs, promoters offering prizes, certificates or other come-ons, and sellers on the Internet.
The Licensing Department estimates there are more than 1,000 providers of travel services in Washington, 66 of them in Spokane County.
The vast majority, say industry representatives, are reputable businesses.
Kris Erickson, owner of a travel agency in Tacoma, said traditional travel agents provoke only 8 percent of the complaints to the attorney general about travel services.
By comparison, she said, travel clubs generated 60 percent of complaints, sellers of travel certificates another 20 percent.
Just one club, Bellevue-based Platinum Passport Ltd., was responsible for more than 30 percent of all travel-related consumer complaints in Washington last year, Erickson said.
Platinum, which was also marketed by Royal Holidays, was sued in King County Superior Court last July by the attorney general.
Five individuals involved agreed two weeks ago to pay fines ranging from $2,000 to $5,000 to resolve the complaints against them.
Assistant Attorney General Regina Cullen said discussions with others named in the complaint continue.
The suit was one of six the state filed targeting different types of abuses, she said. Some have been resolved, others are pending.
A dispute over the division of duties between the attorney general and Department of Licensing stymied members of a legislative task force who were supposed to propose modifications to the Sellers of Travel Act passed in 1994.
The group of legislators, industry members and representatives of the department and attorney general met three times, but was unable to reach a consensus on changes.
Joe Daniels, attorney for the Washington State Coalition of Travel, said the industry wants primary responsibility for enforcing the travel act to rest with the attorney general.
But the law, with the support of the attorney general, bestowed much of that authority with the Department of Licensing.
Besides licensing, the department also inspects agencies to assure compliance with requirements that consumer funds are safeguarded.
One such inspection - or lack thereof - prompted the closure in December of a Pasco agency that failed to produce airline tickets after taking more than $100,000 from consumers.
Varadian said the department moved in when a California tour operator notified officials BudgeTravel of the Tri-Cities had bounced a $65,000 check.
When an inspector was denied access to the company’s books, the department moved to shut the business down, he said.
The owner requested a hearing, then failed to show. With consumer complaints mounting, the department limited BudgeTravel operations to dispensing tickets already purchased. The business closed.
Varadian said the department was able to bring administrative remedies to bear in the case faster than the attorney general could have compiled a civil complaint.
Assistant Attorney General Sally Gustafson, who was a member of the task force, agreed the BudgeTravel case illustrated the advantages of having the licensing department bear responsibility for the investigations.
“There were people going in there every day,” she said, many of whom might have lost their money while the state sought a court order to shut down the business.
Daniels disagreed. The signs of distress at BudgeTravel were so obvious, he said, the attorney general could have readily gotten an injunction.
Franklin County Attorney Steve Lowe said last week he is close to filing charges in the case.
Daniels said the travel industry’s other concerns with the new law include voluminous disclosure requirements and the measures required to safeguard client funds.
The law makes no distinction between traditional travel agents and the sellers of travel certificates or club memberships who traffic in “the promise and not the product,” he said.
Erickson said coalition members are also upset because a license fee that was supposed to be just $65 is $234. The money, she said, is funding a $300,000 bureaucracy overseeing an industry with a handful of renegades.
“The bad apples we want to get at are the ones who want to defraud,” Daniels said.
He said he expects a bill with coalition-backed changes to state law to be introduced this week. A counterproposal from the attorney general’s office may follow, he added.
Gustafson was non-committal, saying she continues to work on resolving differences with the coalition. The state is trying to avoid overregulation without sacrificing consumer protection, she said.
“Every year there have been more problems,” Gustafson said.
Meanwhile, two Spokane travel agents say they are generally satisfied with the way Washington regulates the industry.
Fees, said Leslie Edwards of Edwards Lalone, should be high enough to discourage unqualified agents trying to get into the industry on the cheap.
“I would like to see standardized testing,” she said, noting that many are representing themselves as agents on the basis of kits purchased through the mail.
“We feel we too are consumers in a way,” added Tuula Ezzell, manager at J. Martin Travel. “We have to be protected, too.”
She said the volume of solicitations for travel services made by mail and phone seems to have subsided in the last year.
“The word got out that there is some kind of consumer protection in place,” Ezzell said.
, DataTimes MEMO: This sidebar appeared with the story: KNOW BEFORE YOU GO The Better Business Bureau, Washington Attorney General’s Office and Department of Licensing recommend vacationers review any travel promotion carefully. Among their suggestions: Check out travel agents with the bureau, and make sure they are registered with the Department of Licensing. Also, a member of the Airline Reporting Corporation qualified to write tickets at the time of purchase has proven financial stability. Compare the costs of a travel package with components like air fare and lodging that you could purchase separately. Take advantage of every possible discount - frequent flyer, senior citizen, AAA, or those enjoyed by the holders of certain credit cards. By paying in advance with a credit card, you get extra protection if a product or service is not delivered. Beware discount travel clubs and certificates that may not be able to deliver savings sufficient to cover up-front costs. Many are sold by high-pressure telemarketers. Avoid accepting prizes that require you to pay a fee. Always check for hidden costs. If you’re Internet-friendly, you may want to make your own arrangements over the Web.
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