Rogue Agents: TICO Warns Registrants Of ‘Dramatic Rise’ In Fraud

Open Jaw

TICO V.P. Operations Dorian Werda and President & CEO Richard Smart.

The fraudulent actions of some rogue travel agents have forced the voluntary closure of some travel agencies in Ontario, says industry regulator Travel Industry Council of Ontario.

The not-for-profit corporation responsible for administration and enforcement of the Ontario Travel Industry Act, 2002 says fraud is a fast-growing concern and agency owners must be vigilant to avoid becoming victims of their own employees or outside contractors.

“There has been a dramatic increase in fraud against retailers, wholesalers and consumers,” says Richard Smart, TICO President & CEO. “There has been a significant increase in claims against the Compensation Fund in relation to fraud. We haven’t seen that before and it’s a fundamental change of what the fund was intended to do.”

As a result, fraud is a major topic at roundtable sessions TICO is hosting for registrants. By offering a regulator’s perspective on the issue, TICO hopes to sound the alarm.

The 1st thing registrants need to know – and some apparently don’t from TICO’s experience – is that they are responsible for the actions of their employees, whether inside their stores or as outside sales representatives.

Smart says fraud can take many forms, including:

  • Credit card misuse
  • Requests for cash payments or e-transfers that are not passed on to agency owners or suppliers
  • Provision of fake receipts or none at all
  • Giving clients price quotes that resemble booked travel documents, but then auto-cancel
  • One-way bookings that leave travellers stranded as return travel has not been paid

The keys to preventing fraud are controls, policy, procedures and owner diligence, says TICO V.P., Operations Dorian Werda. “Owners need to keep close track of their agents, their bookings and the status of those bookings. Agencies need to have internal controls and watch for warning signs. It’s important to monitor customer complaints, and social media too - many owners have no idea what their agents are doing online,” Werda says.

Vigilance also takes the form of ensuring that when agencies and agents part ways, the door is firmly closed behind them. “We’ve seen instances where agents no longer employed by an agency still have access to their GDS systems,” says Werda, in what is an open recipe for abuse.

TICO recommends that owners do careful background checks before hiring staff or engaging outside representatives. “And it’s critical to see all the invoices from your outside sales people. We’ve seen many instances where owners are not keeping a close watch,” Werda adds.

“98% of agents and outside sales reps are professional and upstanding,” says Werda. “But there are some rogue agents that are giving the industry a black eye. And we have seen some owners forced to voluntarily terminate their registration because they can’t afford to repair the damage done by fraudulent agents.”

Smart says the rise of fraud is not only hurting the industry’s reputation through negative media coverage, but it is also “impacting our ability to provide comprehensive, proactive consumer protection.”




KAREN BRETT - March 24, 2016 @ 14:03
ALSO FRAUD OSA AGENTS THAT ARE SIGNED UP WITH AGENCIES, FRIENDS,RELATIVES BUT MAKE NO SALES & HAVE ACCESS TO FAMS - WHERE DID THE REQUIREMENT GO WHERE YOU WERE REQUIRED TO DO $40,000 REVENUE BEFORE YOU WERE ACCEPTED. LATE FAM I WAS ON, USA AGENTS- MOST OF THEM DID NOT KNOW WHAT BSP WAS...


(will not be published)