Mark Pestronk
Q: Our agency has picked up a few small-to-medium corporate accounts whose travelers have been engaged in a form of cheating: They have been booking hotels and cars at corporate rates for which the travelers did not qualify. For example, the corporate client has no hotel contracts of its own, so the travelers have been booking the "IBM rate" using a special rate code. They also book cars using a corporate discount rate code when they are using the cars for personal travel. Is it legal and ethical for our agency to book using these rates? Could we get into trouble with hotels and car companies if the travelers get caught?
A: As far as I know, hotel chains and car rental companies do not actively police travelers' compliance with discount eligibility. In fact, I have never actually heard of any claim by any such company against any traveler or travel agency.
However, the absence of enforcement does not make these practices legal. In fact, they constitute wire fraud.
The federal statute on wire fraud reads: "Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both."
In other words, if you misrepresent your status in an online communication for the purpose of obtaining money or a discount, you commit a federal crime. Further, if you help someone to commit the crime, you are guilty of the crime of aiding and abetting.
So, if you know that the traveler from ABC corporation does not qualify for the IBM rate, you should obviously not make reservations using the IBM rate code. It is not only illegal but also unethical because you are cheating the supplier.
You should also tell the corporation's decision-maker about the requests that you have been receiving. If the decision-maker does not do anything or even condones these practices, you have to ask yourself whether it is worthwhile to continue servicing this account.
Perhaps make clear to the decision-maker that, if the corporation's travelers insist on fraudulent bookings, they need to do the bookings by themselves. You could then use one of the technology tools that are available to incorporate the booking data into your database.
Although I have not heard of any prosecutions for fraudulent hotel or car bookings, I do know of at least one prosecution of a travel agency owner who booked corporate travelers at the very low GSA city-pair rates that only government employees are eligible for.
The owner went to jail for several years for wire fraud.
I would not be surprised to see a similar prosecution if a hotel chain or car company insisted on it.