Alaska cracks down on behavior of 'port lecturers' on cruise ships

By Tom Stieghorst
Downtown Ketchikan AlaskaShopping in Alaskan ports might be more transparent this summer, following a recent legal settlement.

Negotiated orders with the Alaska attorney general will require more disclosure from three companies that provide most of the onboard shopping talks for the major cruise lines.

In a uniform, formal speech, port lecturers henceforth must inform passengers that the companies they work for get a fee from the retailers they recommend and that in many cases the companies get a percentage of a client store's sales.

The consent agreements also bar lecturers from disparaging stores that do not participate in their programs, and they regulate "guarantees" that are made about items bought by passengers.

In a statement, Alaska Attorney General Michael Geraghty praised the companies "for working with the state to ensure that ethical and fair business practices are followed."

Fines to cover the costs of investigation and enforcement include $75,000 from Onboard Media, $45,000 from Royal Media Partners and $90,000 from Panoff Publishing.

No actual or potential violations of the law were admitted by the defendants in the settlement.

Onboard Media and Panoff Publishing issued statements.

"We are pleased that the standards that Onboard Media have always followed have now been formalized," Onboard Vice President Noelle Sipos said.

Panoff Group CEO Bill Panoff said, "We intend to move any ambiguity out of the equation, ensuring that all Alaska retailers, whether participating or not, feel confident about the upcoming season."

Efforts to reach Royal Media were unsuccessful.

Port shopping programs are offered on most cruise ships. In part, they involve employees who sail on the ships and give talks either before a port call or at the pier, hoping to guide passengers' onshore shopping decisions.

The three firms, all based in South Florida, are contractors of the cruise lines. Onboard Media is on Carnival and Princess ships. Panoff Publishing has an array of clients, including Holland America Line and Norwegian Cruise Line. Royal serves Royal Caribbean, Celebrity and Azamara.

In addition to lectures, the companies create books, in-cabin videos, maps and other media as marketing vehicles for onshore retailers and brands.

"It's become a big business, this port lecture thing," said Lew Williams, mayor of Ketchikan, a regular port of call in Alaska.

Williams said he was one of several mayors who wrote letters to the Alaska attorney general highlighting complaints about the way port shopping companies were operating.

"They would say [disparaging] things about other stores," Williams said. "They would take people by the hand to the store. They would pull people out of stores, saying they're in the wrong store."

But retailers that benefited from the talks didn't want to see them banned. "There's a few merchants that really enjoyed the port lecture program, so I'm glad it was preserved," he said.

Alaska began fielding complaints from passengers several years ago, said Ed Sniffen, a senior assistant attorney general. "Over time, we got a substantial number of complaints," he said.

The response from the companies "wasn't that adequate," Sniffen said. So the state started investigating whether the firms were violating Alaska's Unfair and Deceptive Trade Practices and Consumer Protection Act.

He said the state had prepared to sue the companies had they not settled.

Under the settlement, promoters and cruise lines are barred from saying they selected, recommended or vetted stores in the program.

Before they start their first talk, lecturers must say: "Hello my name is _________ and I am your port lecturer. The retailers you hear about in today's presentation have paid a fee to be included in the shopping program, and many of the retailers also pay commissions that are based on their sales to passengers."

Promoters cannot say or imply that they can arrange special deals or bargains without a factual basis for such claims. Nor can they say purchases from participating stores are duty-free or tax-free in Alaska.

They are barred from disparaging stores that don't participate in the program or merchandise sold by nonparticipating stores. And they are prohibited from saying it is risky to shop at nonparticipating stores.

Promoters are prohibited from deterring or hindering passengers from shopping at nonparticipating stores.

Merchants participating in the program must offer buyers 60-day guarantees that include repair, replacement or a full refund. They cannot charge restocking fees. They must ship repaired items to consumers at the store's expense.

Promoters must say that retailers who don't participate in the program might also offer their own guarantees.

Sniffen said the settlement did not shut down free speech.

"There's a certain amount of recommendation or puffing that's not illegal," he said. "If you have an opinion or a recommendation about a store, that's fine. But making sure you don't disparage other stores is another thing."

The settlement includes robust enforcement. The promotion companies must make video and audio recordings of the main lectures and keep records for inspection for three years. Alaska may also send undercover investigators to make surreptitious recordings.

If further violations are found, civil penalties of up to $50,000 for each infraction can be assessed.

Sniffen said the cruise lines themselves were not parties to the settlement.

"We reached out to the cruise lines to make them aware we suspected their contractors were violating Alaska laws," he said. "The cruise lines were very cooperative."

Sniffen said that because the port promotion firms are contractors, the cruise lines weren't viewed as responsible for their conduct.

"I don't think the management folks at the cruise lines get into the details of what these promoters were doing on their ships," he said. "They had no way of really policing it that well. So it was really [a matter of] working with the promoters on how to get things done."

Follow Tom Stieghorst on Twitter @tstravelweekly. 
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