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.
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
"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
"They always start off with legitimate [credit] cards to suck
you in," Covington said. "Then they feed in the other [stolen]
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
"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."
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
The individual may send you (by fax or mail) copies of credit
cards, passports, authorizations and other documents that you may
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
For more information, check Section 70 of ARC's Industry Agents
Handbook or the products and publications section of ARC's Web site
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.
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
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 www.venturedirectory.com.
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
Former agency owner Dan McManus is president of the McManus
Group publishers of business management advice. Contact him at [email protected].