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Travel fraud on the rise, experts say

WASHINGTON—If you say yes to the telemarketer or the Internet pop-up ad offering a free trip for two to the Bahamas anytime in the next year, what happens next?

Often, veteran travel-fraud investigators say, fees and taxes add $200 to the cost of the "free" trip. Still, it seems like a bargain. Then the hotel rooms set aside for the package are booked up when you want to travel? The agent offers an upgrade to another room that's available. That's another $200.

Want electricity in that room? That's extra. And expect to attend an all-day, high-pressure sales pitch for a time share. You won't have your companion to help you through it. The strategy is to separate couples and pitch to them separately, aiming to sell one party on the deal who then helps sell the other.

Travel fraud—dominated by these so-called vacation certificates—is growing, fraud specialists say, often with help from online auctions, virtual travel agencies and pop-up ads.

"The Internet is fantastic, but has also created fantastic problems," said J.R. Kelly, the director of Florida's state Division of Consumer Services in Tallahassee.

Kelly should know. When it comes to travel scammers, Florida is Mecca. Complaints to his office doubled last year and he expects them to double again this year.

Vacation certificates made up three-quarters of Florida's 4,400 travel-fraud complaints in 2004, according to Kelly. They involved Florida as a destination and as a place of business for scammers.

When people get tricked in travel scams, the average loss is about $1,200, according to the National Consumers League, a coalition of government and nonprofit consumer groups.

Kathryn Sudeikis, the president of the American Society of Travel Agents, blames the Internet for the surge. "Even the most savvy traveler runs the risk of losing real money online," she said.

But David Dennis, a spokesman for Expedia.com, the nation's largest online travel agency, said that just wasn't true.

"Fraud exists online and offline," Dennis said. "You could walk into a mom-and-pop travel agency down the street and run the same risk."

The rivalry between traditional travel agents and online ticket agents runs deep. About a fourth of Americans who traveled last year bought tickets online, according to PhoCusWright, a travel-industry research company.

It's true that scam artists are moving online. Internet fraud now leads all fraud complaints to the Federal Trade Commission.

According to the National Consumers League, Internet travel scams ranked 14th among Internet complaints and ninth among telemarketing complaints.

In one brick-and-mortar case, travel agent Casandra Littles of Roxbury, Mass., sold cruises and trips that she'd bought using stolen identities. Littles, who's now serving a 21-month federal prison sentence, racked up $45,000 in charges on stolen credit cards before the Secret Service nabbed her in 2002. In addition to protecting presidents, the agency investigates bank and wire frauds, including those involving credit cards.

Scammers offering vacations—whether free or as prizes in online raffles—sometimes obtain credit card numbers by saying they're needed for "verification" or to guarantee payment of unauthorized charges. The scammers sometimes disappear after taking supplementary payments for "free" vacations.

The pitch for real estate can be very convincing, according to Keith Bellows, the editor of National Geographic Traveler, the National Geographic Society's travel magazine. Bellows, at 27, was talked into a $7,000 time share he couldn't afford.

"No matter how much we think we're experts—and I think I'm a pretty savvy traveler—we can get ripped off," Bellows said.

Kelly thinks he knows why.

"We're all greedy to some extent, and we all want the cheapest price for something," he said. "Sometimes that can get you into trouble."

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To report suspected travel fraud to the Florida Consumer Services Division, phone 1-850-488-2221.

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(c) 2005, Knight Ridder/Tribune Information Services.

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