Written by By: Tom Ogg
Travel Professionals, you know who you are! Be sure to sing your praises. I received a threatening email from an anonymous person accusing me of supporting a known card mill recently. He or she was downright rude and his or her tone was one of allegation and finger pointing. I was blown away by the writer’s aggressive and intolerant attitude. It was if I were being accused of some heinous crime against mankind, or worse. As it turned out, the writer had seen an ad served by Google AdSense on my site that linked to a suspect company.
Now, I must tell you that I have been on the forefront of the card mill battle from the get-go. In 1992 (or so) I attended the very first meeting of the original card mill, Worldview International in La Jolla, California and then immediately reported them to IATAN. I suspect that I might have been the very first person in the travel industry to launch such a complaint. The meeting took place in an attorney’s office and was heavily attended by consumers anxious to learn how they could “travel like a travel agent”. The claims were outrageous and the pitch was hard-core. Worldview International grew to become a large travel company before they collapsed.
At the time I was brokering travel agencies and I built financial modules of MLM and referral networks and was able to play the numbers out to see if they were, if fact viable. Since there were no operational efficiency gains, but a tremendous increase in operating costs and reduced overall revenues, the models were dependent upon the front-loaded recruitment fees to support the burden of the operation. Once the growth of the front-loaded recruitment fees leveled off or worse, contracted, the weight of the operation committed the model to financial collapse.
Probably the most outrageous card mill was World Class Travel Network. It was a 7-deep MLM with a very aggressive recruitment program. They sold a “travel agent training kit” as part of the recruitment fee and got so blatant in their efforts that they sold the “kits” in bulk for resale. They recruited well over 50,000 “agents” who were rabid in their attempt to recruit more new “agents” Their focus was completely on the travel perks that one could access if they joined the network. Of course, the FTC raided their headquarters in California, seized their records and shut them down during an action known as “Operation Trip up”. Operation Trip Up was a Federal effort to clean up travel scams affecting consumers that occurred in 1997 and prosecuted several of the most outrageous abusers.
What ensued after Operation Trip Up was a settlement negotiation between the FTC and the principles of World Class Travel Network. The negotiations and settlement are well documented by visiting www.FTC.govand searching with the keywords “World Class Travel Network”. Unfortunately, as part of the settlement process the FTC defined exactly what a network marketing and MLM company that wants to sell travel agent identification documents can (and cannot) do. In effect, the FTC legitimized the business model by defining exactly how one must go about it in order to be legitimate. This was not the intended result that supporters of Operation Trip Up had in mind.
As a result of these actions, several “card mills” or sellers of travel agent credentials exist today presumably operating within the prescribe guidelines as defined by the FTC. While they are irritating to professional travel agents, they have every right to be in operation according to the FTC. Their business model is basically “we can make a ton of money selling travel agent ID cards to consumers.” Of course, the more they can look and feel like a host agency, the more credibility they accrue for consumers that think they are becoming travel agents and will experience the fabulous discounts and free travel that travel agents supposedly enjoy. This is exasperating to travel professionals because it is their clients that are generally approached by the card mills. Here is a list of actions you can take to help the situation.
Know Your Competition: Given that card mills are not going to go away any time soon, your best defense is knowledge. A well thought out and knowledgeable response to a question asked by one of your clients that has been approached by a card mill is much more effective than an angry “those guys are bums” response. Card mills succeed because consumers want to believe that they can travel for free. Visit homebasedtravelagent.com and follow the card mill ads. Prepare a response for the dominant card mills in your area and make it based on knowledge, not anger.
Be Vocal About Card Mill Agents: Travel Trade has done an admirable job at maintaining professional travel agent attendance at their trade shows. If you go to a trade show and it is loaded with card mill agents walking around with tee shirts that read “I Travel For Free, Ask Me How.” Be sure to let the trade show promoter know that this will be the last time you will attend their shows if they allow “posers” to attend. Trade shows always want lots of people to build their numbers and by allowing card mill agents (aka past clients) to attend, they reduce the level of professionalism at the show and the potential ROI for suppliers who are looking for more distribution through professional travel agents.
Don’t Support Associations That Support Card Mills: Host agents and sellers of travel agent credentials have two separate and diametrically opposed business models. It amazes me that travel professionals can support an association that also supports a business model that is focused on converting their clients. Find out what associations are allowing card mill agents to join and get vocal about it. Support those associations that are supporting your agenda.
“Hate Them, Join Me:” Don’t fall for this argument. I suspect that the person that was rude to me was caught up in this mentality that seems to be the mantra of some groups. The time has come and gone for the card mill wars (visit www.FTC.govand do your homework.) and promoting hatred towards them only convinces consumers that they must be successfully changing travel distribution, as they claim. The only rational approach to dealing with card mills is to become knowledgeable, vocal and critical of organizations that want to support both business models under one roof.