To catch a thief

ll right, so maybe being a travel agent isn't quite as exciting as, say, being a secret agent (or even sometimes an insurance agent). Sure there are plenty of international tickets, but rarely any international intrigue. But every so often an otherwise simple booking could send an agency down the dark alley that leads to film noir territory.

Indeed, that was the case at one travel agency, and before it was all over, everyone from U.S. Customs, local police and even the Secret Service was involved.

Agency owner Chuck Covington and his employees helped the Secret Service catch a thief. Unlike some crime stories that start on an ominous, dark and stormy night, this one began on an otherwise typical day in late May.

People's Travel/American Express, a Belleview, Mich.-based agency that specializes in both business and leisure accounts, had been doing business with a client whom we'll call Mr. Sly. At first, there was nothing particularly remarkable about Mr. Sly or his business.

"He had been our client for a while," agency owner Chuck Covington recalled. "But I had never seen him myself."

Indeed, in this age of fax machines, wireless phones and e-mail, there often is no need to meet a client.

So when Mr. Sly began booking tickets over the phone with the agency, no one raised an eyebrow. Besides, he had properly faxed in his credit card authorization forms to allow the agency to book tickets and charge them to his credit cards. Sometime later, MasterCard and Visa notified the agency that Mr. Sly's credit cards were stolen.

"They always start off with legitimate [credit] cards to suck you in," Covington said. "Then they feed in the other [stolen] cards."

By the time Mr. Sly was through, Covington's agency was ripped off to the tune of $8,000. But, Covington said, "I grew up in New York where you don't get mad, you get even. You don't just get even, you get more than even."

Covington's agency contacted the police and U.S. Customs. Customs contacted the Secret Service. The Secret Service wanted to know if there was any way to get a lead on Mr. Sly.

But how? One of Covington's agents recalled the faxed credit card authorization. The transmission information was for a Mail Box Etc. location about 20 miles away. The Secret Service set up surveillance. The agents left a message for Mr. Sly, saying they had made a mistake, really wanted his business and promised to fax updated card information to him at his Mail Box Etc. address.

Mr. Sly showed up at the Mail Box location, where he was nabbed.

"He probably thought we were a bunch of buttheads and he could run more reservations through us," Covington said. Instead, he got booked to the one destination he was destined to visit.

-- Michael Milligan

Know your customer

ccording to ARC's Industry Agents Handbook, there are numerous variations on credit card scams. But they all have one thing in common: "The lure of a substantial customer account using non-face-to-face credit cards as the form of payment."

Additional information on credit card fraud can be found on ARC's Web Site.The key elements include:

  • An individual (or individuals) claiming to represent a large foreign or domestic business or organization may contact your office by phone or perhaps by e-mail through your agency's Web site.
  • The individual may claim that the organization has employees traveling all over the world, and they need a travel agency such as yours to do business in the U.S. or in your particular state.
  • The individual may provide several credit card account numbers as the form of payment, claiming that the organization has several credit cards and/or each employee has his or her own credit card.
  • The individual may send you (by fax or mail) copies of credit cards, passports, authorizations and other documents that you may have requested.

    ARC says "in the prudent exercise of risk management, it is important to remember that a signed and imprinted credit card charge form bearing the appropriate authorizations [approval codes] is the best protection against potential liability."

    "Above all, know your customer," said Jim Manning, ARC's field investigator in fraud prevention, "and you will minimize fraud."

    For more information, check Section 70 of ARC's Industry Agents Handbook or the products and publications section of ARC's Web site at

    Saving for retirement

    What is the best retirement plan for agency owners?

    A: The best plan is one you can begin right away because any plan outperforms no plan.

    The most important advice about retirement is to avoid the two most common small business owner traps: believing that your business eventually will be successful and provide you with a comfortable retirement, or waiting around for the perfect retirement plan to present itself.

    Dan McManus.Many people find that the best way to begin saving money is by using the "no see, no spend" method; that is, having money deducted from your paycheck before you can get your hands on it. By picking an investment that deducts automatically from your checking account, you know that the money is safely tucked away.

    Under these plans, you can invest it in stocks, or if you want something more conservative, consider U.S. Treasury funds. These have low earnings right now but promise security.

    Ask your bank about its IRA or 401(k) plans. Don't get too hung up on which is the best option. You usually can roll over any tax-deferred plan to another one, so nothing will be lost.

    Q:I need money to expand my agency, and a friend told me to check into "Angel Funding." Is there such a thing?

    A: Sure, and we have Broadway to thank for that heavenly reference. Years ago "angels" used their money to back plays and musicals, saving them in the nick of time. Today, "angel" financing usually refers to a wealthy benefactor who puts money into fledgling businesses and doesn't expect to be paid back in kind. Instead, the angel might take an equity position in the business or participate in its management.

    These venture capitalists are known to invest in a wide range of businesses and are willing to wait for results. Their deals require less paperwork and rely on belief in the entrepreneur. Be aware, however, that any investor will want to see a solid plan for making back far more than they invest.

    Angel networks are sprouting up all over. Sometimes several individuals pool their money to invest in small businesses they believe have potential. The largest of these networks is the U.S. Small Business Administration's ACE-Net at (800) 8-ASK-SBA. Other networks include The Capital Network at (512) 305-0826 or the Environmental Capital Network at (313) 999-8387. You can find regional and local networks on the Internet at

    Q:Shouldn't I treat employees from temp agencies the same as my own?

    A: No. One of the main benefits of using temporary agencies is that the employee is not due benefits and perks. In fact, you need to treat temp workers different from your regular employees. For example:

  • Don't give them performance reviews; those should go to the temporary agency.
  • Don't warn of termination; again, contact the agency if you want to terminate the temp.
  • Don't include temps in training or planning sessions that do not directly relate to their job.
  • Don't give them performance awards such as Employee of the Month.
  • Former agency owner Dan McManus is president of the McManus Group publishers of business management advice. Contact him at [email protected].


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