By Fran Durbin
FAIRFAX, Va. --Travel agent arbiter William McGee ordered the
Airlines Reporting Corp. to accredit an agency that, through
several flukes of fate, never was accredited but operated as if it
were for nearly a year. He said the agency, Tradewinds Travel
Managers LLC of Fremont, Calif., had "a perfect compliance record"
during its "highly unusual" status. He denied an ARC request to
make the agency maintain a $70,000 bond (instead of $20,000), but
he required the owners to sign personal guarantees making them
personally liable for any default for five years.
The arbiter said he reached his conclusions after wading through
a "quagmire" of information in an "unusually complicated" case.
According to McGee's decision, the extraordinary situation
developed after Tradewinds' owners bought an agency branch called
Go Travel Managers, changed its name to Tradewinds and took over in
August 1996. The owners consumated the purchase without ARC
approval because they were advised by an unnamed travel atttorney
that they didn't need it right away.
In October 1996, the new owners filed a change of ownership
application with ARC. However, ARC terminated the accreditation of
the Go Travel location and its home office due to suspected fraud
at the home office. The home office turned in its ticket stock, but
when ARC demanded the stock at the branch (which had become
Tradewinds), the new owners got a temporary restraining order from
a court, preventing ARC from taking their stock. Meanwhile, ARC
said the change of ownership application was moot because Go Travel
no longer existed.
So the new owners filed an application last December for
accreditation as a brand-new entity. ARC turned down the
application and the new owners appealed to the arbiter. The arbiter
commented that the whole situation involved many "unfortunate
For example, he cited 16,000 tickets that were delivered to Go
Travel in 1994 and were missing. ARC thought Tradewinds had the
tickets at one time, but McGee determined that the firm actually
did not. All in all, McGee said much of the confusion in the case
stemmed from the new owners' "haste," poorly prepared forms and
"lack of adequate understanding of the ARC requirements," as well
as side-effects from apparent fraud "by the seller of the branch
operation. While not justifiable, these errors are understandable
under all of the circumstances."