Investigations of Prime Travel Protection, travel agents coming “to a head”

Authorities in two states appear poised to take enforcement action against Prime Travel Protection and travel agents who sold its policies.

“There’s an ongoing investigation,” says Chris Lines, a legislative liaison for Colorado’s regulatory agencies. “We expect it will come to a head in a matter of weeks.”

The state of Florida, which is looking at travel agencies that sold Prime Travel Protection policies — a product it considers unlicensed insurance — may be even closer to taking action.

Two more state agencies, Florida’s Office of Consumer Regulation and the Division of Insurance Fraud, have now joined its investigation. The involvement of the latter agency increases the likelihood that criminal charges will be filed.

The Federal Trade Commission, the agency created to investigate and eliminate unfair and deceptive trade practices in business, also appears to be in the early stages of its own investigation. Numerous travelers report they have filed complaints with the FTC, and one high-level official at the agency has confirmed today that the agency is reviewing the grievances.

In a related development, last week’s letter to creditors that purporting to come from Prime Travel Protection’s trustees, appears to have misstated certain facts. A review of bankruptcy filings in United States Bankruptcy Court reveals no record of a filing by Jerry Watson, Prime Travel Protection’s principal, or of his company.

The next several days may prove to be interesting, not only for Prime Travel Protection policyholders, but also for agents who sold trip protection policies and Prime Travel Protection’s owners.

Update (3 p.m.): Colorado has followed up with a statement regarding possible actions it could take regarding Prime Travel Protection.

Prime Travel Protection and Universal Assurance Group, Ltd. were not licensed to conduct the business of insurance in Colorado, thus the Colorado Division of Insurance is only authorized by law to issue a cease and desist order.

Will proposed airline alliances hurt travelers?

In the final hours of the Bush administration, airlines are quietly lobbying for approval of a new kind of alliance that could potentially change the way airline tickets are bought and sold. But are these corporate hook-ups good for passengers? Absolutely not, says a brief filed by two groups representing travel agencies.

If you’re a frequent flier, you’re probably familiar with entities like the Star Alliance and SkyTeam. If not, here’s what you need to know: These alliances let airlines share resources and flights, and allow passengers to collect highly-addictive award miles on each other’s respective airlines.

But the new alliances would go much further, say agents. According to their filing with the Transportation Department in response to the Star Alliance’s request for antitrust immunity, they could create de-facto monopolies.

The application would allow the airlines to integrate the way in which they pay agency commissions, jointly market to corporate, group and government customers, consolidate their sales and distribution and share “competitively-sensitive information” on bids for corporate travel contracts, among other things.

Essentially, these airlines would act as one — and with the government’s approval.

The brief cites evidence that even without antitrust immunity, airline alliances have led to higher air fares in certain markets. But the real downside would be that the new alliances could dis-empower travel agents, which would be bad for us.

Degradation or destruction of independent travel agents would have profoundly adverse consequences for consumers. As the alliance carriers are well aware, travel agents serve as neutral sources of comparative price and service information for consumers.

They are powerful forces for lower fares by developing and constantly improving technology that allows consumers to easily compare the fares of all airlines offering service on a particular route.

They have also pioneered technology that automatically alerts consumers to the availability of lower fares for their trip if they will consider alternate airports or alternate dates of travel.

I think this is one of those occasions when travel agents and consumers are on the same page. These proposed airline alliances shouldn’t be getting any kind of antitrust immunity from the government. Not now, during the final hours of a lame duck administration. Not ever.

In fact, as a consumer advocate, I believe the government should end all of these alliances because they are not in the people’s best interests.

Four secrets for finding the right travel pro

Who needs a travel agent anymore?

Fewer of us do, apparently. Just eight years ago, there were 124,030 travel agents in the United States, according to the Bureau of Labor Statistics. By 2006, that number had fallen by about 30 percent, to 87,600 agents.

The government’s outlook for the business is downright depressing. It projects “little or no growth” for travel professionals during the next eight years, as market share gains made by online giants like Expedia, Orbitz and Travelocity are held in check by a small bump in demand for specialized travel advice.

In fact, many readers of this column believe that’s optimistic. They think travel agents are completely obsolete.

“They are an outdated remnant of past practices that add virtually no value to any transaction today,” says Bill Clements, who works for an airline in Ypsilanti, Mich. He also took me to task for recommending agents in my columns, accusing me of being “the biggest lackey for them that I have ever experienced.”

I hear from readers like Clements constantly. Every week, I seem to be on the receiving end of an angry anti-agent missive that starts with, “How could you?”

So let me talk about how I could.

Why do I still like agents? A competent travel adviser can be your greatest asset when you’re planning a trip. The key word here is “competent.” And let me also define what I mean by agent: I’m not necessarily talking about an offshore call center worker reading from a script or a hobbyist who paid a few hundred bucks for bogus agency credentials.

I mean a bona fide, certified travel professional.

It’s not a popular position to take. I know. There’s no shortage of horrific travel agent stories making the rounds these days. I have a stack of grievances that follow the same basic narrative. It goes something like this:

I booked a trip through online agency X. Something went wrong — my flight was rescheduled or there was a problem with the hotel reservation. When I phoned the company, I was transferred to half a dozen departments and ended up speaking with someone in Bangalore who I could barely understand. Five hours later, I’m no closer to fixing the problem. Help!

Let me take a moment to say I mean no disrespect to online travel agencies. Most of the airline seats, cruises and hotel rooms booked through these large sites are problem-free. It’s the way they address the inevitable problems that leaves something to be desired in the view of many readers.

Jeffrey Alter, an attorney from New Orleans, bought an airline ticket through an online agency recently. But when he received his final bill, he noticed a $50 transaction fee had been added to his credit card statement. No one had mentioned the fee to him when he booked the ticket. I asked him to check the terms and conditions on the Web site, and sure enough, there was a note about a $30 transaction fee.

So why did they bill him $20 more, and why didn’t they tell him up front? I suggested Alter contact the agency. He did. Its response? “Do you believe we provide airline tickets for zero renumeration [sic]? We wouldn’t be in business long if we did that.”

Now that’s what I call customer service.

The other side of this equation is do-it-yourselfers — people who have paid hundreds or thousands of dollars to become “instant” travel agents. These amateurs give other agents a bad name largely because they’re untrained. They’ve just paid someone for a card that says they’re real travel agents, but they often don’t know the difference between a stopover and a layover. Instant agents are more victims than anything else, though. They’ve been scammed into thinking they could become real agents by writing a check.

But even after weeding out the phonies and dot-comers, you’re still left with a group of agents that can be less than perfect.

Bob Barstow, a long-time reader of my columns, has had his run-ins with well-trained, legitimate travel agents that left him disappointed. He says he’s never experienced the “go-the-extra-mile” attitude for which these trained professionals are supposedly known. “You imply that the business is full of agents dedicated to the travelers’ well-being, and will go out of their way for their customer,” he told me. “I have yet to meet this agent.” (There’s more about Barstow’s unfortunate travel agent experiences — and the interesting answers from agents — on my blog).

To Barstow, Alter and yes, even to Clements, let me say: you need to find a good agent. Here are a few tips:

1. Look for the right certification.

If the agent is a member of the American Society of Travel Agents (ASTA), that’s a promising sign. ASTA is the world’s largest association of travel professionals, with a code of ethics that tends to keep the riff raff out. If your travel advisor is certified by The Travel Institute, which offers courses on various destinations and travel specialties, that’s a bonus. Another membership worth looking for is the Association of Retail Travel Agents. Affiliation with a large organization like AAA or a company such as Carlson Wagonlit can be evidence that your agent is on the up-and-up. Your agent should also comply with any state seller of travel laws and carry error and omission insurance.

2. If at all possible, stay local.

There’s no substitute for the personal touch. My best experiences with agents have been one-on-one. The ability to meet — to look the agent in the eye, to shake his or her hand — is something online agencies can’t match. (Note: not all agents work in an office, but home-based agents can and do make personal visits.) The only exception to this rule is if you’re looking for an agent with a sought-after specialty. But even then, a trusted voice on the phone is preferable to the often unintelligible, script-reading customer service associate you’re connected to when dealing with a large agency.

3. Interview the agent.

Don’t pick the first agent you find. Talk to the travel pro. Find out how long he or she has been in business. Ask about fees (yes, they charge booking fees, but they’re worth it if you get into a pinch). I would recommend conducting the interview in person. Pay close attention not only to the way your prospective agent responds, but also at what’s going on in the office around you. Are the other agents taking the time to talk with customers, or do they only seem interested in pressuring their clients to make a booking decision? Does the agent you’re interviewing seem distracted or focused on trying to help you? If you don’t like what you see, move on.

4. Find out how they react under pressure.

The only way to know for certain if your travel agent is a keeper is to see what happens when you run into trouble. And you will have that opportunity, eventually. When your flight is delayed or your hotel is overbooked or your travel insurance claim isn’t being honored, what will your agent do? See, agents are compensated for the booking — either with a fee you pay or a commission they take directly from the company. If they leave you hanging or do nothing more than send you the company’s 800-number, they’re not your agent. Chances are, they’re just in it for the commission.

Good travel agents have an edge over almost any other seller of travel. They know what you want. They speak your language. And they’re there for you when you run into trouble.

In other words, travel agents aren’t obsolete. Only the bad ones are.

Are travel agents worth the extra money?

Hardly a week goes by that I don’t recommend the services of a competent travel agent in one of my columns. And the conventional wisdom — which is that a real travel agent can make your trip better — has gone unchallenged for years, if not by me then by my readers. Until last week.

Bob Barstow, a long-time reader of my stories, e-mailed me to question the validity of that claim.

In many, if not most of your columns, you give an impression about travel agencies that I just have not found to be true.

You imply that the business is full of agents dedicated to the travelers well-being, and will go out of their way for their customer. In all my years of traveling, both business and personal, I have yet to meet this agent.

Barstow suggests agents just book trips — and not always as efficiently as you can online.

Every single one I have worked with has done their job of arranging my booking — no more, no less.

For example, no agent has ever done a recommendation on which resort property I might like better. They have never asked what my interests are. I have even told them what I am looking for, and the best I get is a list of hotels that “would work for me.” When a flight has been messed up, no agent has ever done more for me than I have been able to do for myself on site.

He cites his most recent trip as an example.

Barstow used an agent to book a trip to Hawaii. “I asked him to look for flights that I could use my miles to upgrade to First Class,” he remembers. “He said he couldn’t do that, that I would have to handle it. Which I did, but when I made the arrangements, the Northwest Elite contact asked me why my travel agent didn’t do it in the first place. When I asked my agent, he said he couldn’t do it because it was travel agency policy not to use miles.”

Then, on the ground, his disappointment with his agent deepened.

Both properties were Sheraton – on Hawaii and Oahu. I gave the agent my Starpoints number so I would get credit for the stays. He said, no problem.

Upon arrival at both properties, neither had the number in their system. I am still arguing with Starpoints for the credit. Because I paid the travel agency for the reservations, I am having difficulty getting credit for the stays. My receipts from both properties only show incidental charges, not the full amount I paid.

When contacting the agent, he has been no help. I get the impression that he really doesn’t care — we’ve taken the trip, he’s gotten his commission, case closed. He’s polite when I call, but gives the impression it’s not his problem.

Barstow’s question — and I think it’s a valid one — is, where can he find the go-the-extra-mile service travel agents are supposed to offer?

Are there any agents out there who care to answer?