FOR IMMEDIATE RELEASE:  July 27, 1987

              FTC IS CRACKING DOWN ON TRAVEL FRAUD,
             CONSUMER PROTECTION DIRECTOR TESTIFIES

     The Federal Trade Commission is battling travel fraud
through both law enforcement actions and consumer education
efforts, William MacLeod, director of the FTC's Bureau of
Consumer Protection, testified today.
     Travel fraud is the last fad in telemarketing, MacLeod said,
and added that FTC Chairman Daniel Oliver earlier this year
announced a joint effort with the states to help stop all
telemarketing fraud.
     "Travel fraud has become an increasingly serious problem for
the American consumer and is causing substantial economic
injury," he told the House Subcommittee on Transportation,
Tourism, and Hazardous Materials, of the Committee on Energy and
Commerce.  Since the first of the year, the number of consumer
complaints in this area "has increased dramatically," and the
consumer injury may be "at least tens of millions of dollars"
this year alone.
     In a typical travel scam, a consumer is offered a "bargain"
vacation package in connection with the purchase of a travel club
membership or travel certificate.  "Often, however, the consumer
receives nothing at all in return for the membership fee,"
MacLeod said.  The consumer may find that the vacation will cost
"hundreds or thousands of dollars more than the promoter
claimed," or may find that the travel operators have charged
items on a credit card without the consumer's authorization.
     "The Commission is most concerned about nationwide or
regional travel scams involving ... [this] kind of hard core
fraud," MacLeod testified.  "The sad truth, however, is that
consumer fraud will always appear profitable to some bad actors,
and as quickly as the Commission and our state and local
counterparts can shut down one form of scam, we are likely to see
some new permutation."
     According to MacLeod, "The first line of defense against
fraudulent telemarketing and other forms of consumer fraud is
consumer education," and the Commission "has taken a particularly
active role in educating consumers about the travel scam
problem."  In May, the FTC issued a Fact Sheet to the media about
the problem, and this month issued both a brochure for consumers
and a video press release distributed to more than 900 television
stations nationwide.
     "The initial responses to these events indicate widespread
media and consumer interest in the information we are providing,"
MacLeod said.  "We will continue our efforts and work with
federal and state agencies and trade associations to get travel
fraud alerts on the local news, in the local newspapers, in the
trade press, and in legitimate travel club newsletters."

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     The Commission also has "a number of important and effective
law enforcement tools at its disposal," MacLeod said.  "As we
meet today, the Commission's staff is using our authority to
conduct nonpublic investigations of corporations and individuals
promoting travel memberships and certificates."
     In addition, the Commission "is working closely with state
consumer protection officials and other federal agencies."  For
instance, the Commission has set up both a joint task force and
an automated data bank with the National Association of Attorneys
General to combat telemarketing fraud.
     The FTC "hopes its ongoing educational efforts about travel
fraud will create more aware consumers who will be less likely to
fall prey to fraudulent sales pitches," MacLeod concluded.  "We
hope also that formal FTC law enforcement actions, as well as
those of the states and other federal agencies, will put the
worst actors out of business."
     Copies of the testimony are available from the FTC's Public
Reference Branch, Room 130, 6th St. and Pennsylvania Ave. N.W.,
Washington, D.C. 20580; 202-326-2222; TTY 202-326-2502.

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MEDIA CONTACT:     Susan Ticknor, Office of Public Affairs,
                   202-326-2179

(TravelTest)