'Sellers of Travel' protection getting a new look from regulators, trade

The state Consumer Affairs Division is working to revise an

ineffective law designed to protect the public from getting

ripped off by fly-by-night travel agents. But if the law is

changed as promised, some in the travel industry say it will

make matters worse, not better.

The law, commonly known as the Sellers of Travel law, was

passed in 2001 as a last-minute amendment to a bill on deceptive

trade practices. It regulates travel agents and came about

after a number of high-profile cases involving travel agent fraud

in the state.

The travel industry has been complaining ever since the law

was passed that not only does it place onerous restrictions on

travel agents, it does nothing to protect the consumer.

Now it looks as if the Nevada Consumer Affairs Division agrees.

"We are responding to the industry's concerns, though our

first concern is for the consumer," said Patricia Jarman-

Manning, commissioner of the Nevada Consumer Affairs

Division in Las Vegas.

The division is considering two main revisions to the law

and drafting language for the upcoming 2003 Legislature, said

Jarman-Manning. The division plans to propose dropping one

provision of the bill and revising another to ease the requirements

for smaller travel agencies.

The law currently requires that travel agents that have

accreditation with the Airline Reporting Corp., which is a

clearinghouse between agents and air carriers that requires a

bond for affiliated agents, need only to register with the state

for a $25 fee. Agents that are not ARC-affiliated must register

with the state and secure their own $50,000 bond.

Travel agents say there are problems with both the ARC-affiliation

and the $50,000 bond. The bond posted through ARC, says

the industry, doesn't do what the law assumes it does.

"You have to post a bond with ARC, but that bond doesn't

do anything but protect ARC," said George Weeks, who, with

his wife Kyung-Un, runs Un's Travel in Carson City. "So even if

you're affiliated with ARC, it doesn't protect the consumer."

Smaller, often home-based, agencies make up nearly half the

industry now, and many are not ARC-affiliated, according to

Sharna Blumenfeld, president of the Southern Nevada chapter

of the American Society of Travel Agents in Las Vegas. For

them, a $50,000 bond is too burdensome. "I don't have numbers,

but anecdotally, I know there are many agents who,

between 9/11 and the bond, have gone out of business," said

Blumenfeld.

So the Consumer Affairs Division is proposing the provision

about ARC-affiliation be dropped and a sliding scale, based on

agencies' income, be instituted, said Jarman-Manning. All agencies,

whether ARC-affiliated or not, would have to post a bond,

but the amount of the bond would start at $10,000 for the

smallest agencies. At the high end, the largest agencies would

be required to post a $50,000 bond.

ASTA's Blumenfeld said it's premature to comment on the

proposed changes because they may not even be passed into law

by the legislature. But Un's Travel's Weeks says the revisions wil

only exacerbate the situation. "Putting a bond on everyone in

the travel industry will have the impact of driving more agents

out of the business," he said.

Weeks said that since the law was passed he's been able to

find only one firm that would provide a $50,000 bond. And no

firm posts a bond that covered bankruptcy. "Even if the bond is

on a sliding scale that an agent could afford, it serves no purpose,"

said Weeks. "Someone could still set up a storefront and

steal consumers' money."

ASTA's Blumenfeld said there are numerous ways to change

the law so that it would protect the consumer. California law,

for example, requires that agents create a trust account.When a

consumer pays for a trip, the agent deducts his or her commission

and places the remainder the cost of the trip into a

trust account that is used solely to pay the service provider.

Another solution is requiring agents to carry errors and

omission insurance. ASTA members must carry $1 million in

such insurance, which compensates the consumer if the agent

makes a mistake, innocently or deliberately.

Another idea, said Blumenfeld, is professional certification

based on the number of years an agent has been operating. That

would deny certification to illegitimate agents who set up shop

overnight for a quick score against a few naive consumers.