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Rhode Island state Department of Business Regulation
RI Agency Investigates YTB Business Model


The Rhode Island state Department of Business Regulation (DBR) confirmed that it is reviewing and evaluating the YTB business model, according to Richard Berstein, its executive counsel.

In an E-mail to John Frenaye, the sponsor of the MLM petition, "MLM Travel Agents Cheapen Industry," that has to date won over 2,600 travel agent and supplier signatures, Berstein confirmed the review to ensure YTB complies with state law and oversight of the travel industry.

Berstein's response was in reply to Frenaye's query to the Rhode Island attorney general's office questioning the state's rules and regulations on MLMs, card mills and travel agents. Frenaye had queried the state's officials for his blog at http://eyeontravel.blogspot.com

The state requires travel agents to be licensed.

In an interview with Travel Trade, Frenaye, owner of Travels With Fred in Annapolis, MD, said state attorneys general may be a source of redress for travel agents and the industry faced with the proliferation of multilevel marketing schemes and card mills.

"If we can't police ourselves someone else will," he said.

Frenaye also said that he had been contacted by an investigating reporter from WNBC 's Baltimore affiliate WBAL-TV, which was probing reports of an alleged YTB agent whom was said to have disappeared after accepting $15,000 in deposits for a group trip. Details were not available at presstime.

Frenaye has sent letters to U.S. travel associations and vendors asking for action but at presstime had not received responses.

Frenaye remains hopeful that the industry will respond and address the MLM and card mill issues that disturb travel agents and some suppliers.

"The petition reflects travel agent's concerns with the challenge of MLMs and card mills to their credibility and professionalism."

While there is no deadline for the industry to respond, Frenaye believes that many vendor/suppliers will be encouraged to reexamine their policies and follow the recent example set by Royal Caribbean.

Frenaye questions whether suppliers will support Royal Caribbean's policy change, however, possibly leaving Royal Caribbean at a competitive disadvantage as large travel sellers such as YTB or TravelStar - both impacted by RCI's decision - shift their support to other cruise lines.

Expressing his appreciation to those who signed the petition - including some suppliers such as Perillo Tours' president Steve Perillo and Qantas Vacations vice president of sales and marketing Kieron Keady - Frenaye said that the petition has focused attention and created awareness of the issues.

"Card mill companies are a detriment to the travel industry and the U.S. consumer," Qantas Vacations Keady stated when signing the petition.

Perillo expressed the same opinion in his signature. "We have just cut off YTB and are now looking at the others," he stated.

Frenaye also believes that the online petition - a large percentage of respondents offered comments - underscores the need for aggressive action to expand public awareness of the value of professional travel agents.

"Professional agents take justifiable pride in their professionalism and are clearly frustrated by pseudo agents," he said, adding that reaction to the petition from agents exceeded his expectations.

"But the reaction from the associations has been disappointing. Only one agency group - Roger Block of Carlson Wagonlit Travel - has responded," Frenaye noted.

While supplier policies may be the ultimate solution to the card mill and MLM problems, Frenaye, himself a veteran agent, believes that travel agentS have to be more active.

"Suppliers can choose who they want to do business with but so too can travel agents."

Agents can view the petition at http://www.petitiononline.com/nomlm

 
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