Even More About Fraud
Posted by murray in Latest News on August 19th, 2009
Okay, so I have a bee in my bonnet about this. Well, so should you after this stunning missive plonked on my desk from some friendly Detective at Bow Street Nick.
“The fraud allegation reported has been recorded as a crime on Tower Hamlets Borough (Oh! Good!). Unfortunately, due to the current Borough policy… blah, blah, … will not be investigated”
And again:
“… Police Service has finite resources (translation: money) .. only right that these resources are directed to crimes that are solveable…”
So, a reported crime, where you give the name, address, the evidence, more eveidence (indeed more than you can shake a stick at) is not solveable – indeed PC Plod is not going to even send someone around to knock on the door of someone who has nicked the best part of £4,000 for a few days work – Oh! And it’s against the Borough policy.
So what crimes, pray, are with policy? How much can one nick before Inspector Plod comes a-calling? Naturally, I have asked Chief Superintendent Blindeye to let me have a note of, er, “permissable crime”. Certainly, The London Borough of Tower Hamlets is clearly the place to be for credit card fraud!
More About Fraud….
Posted by murray in Latest News on August 13th, 2009
Interesting. Try a search for fraud and scams and you will find plenty about those perpetrated by various outfits; but nothing about those perpetrated by individuals on firms.
Following my last tirade, I did receive a response from Sandra Quinn, Director of Communications, UK Payment Administration – which is, I suppose, a sort of club to which all these merchant service types belong to. From this, it is clear that I am not the only one getting a bit cheesed off by the apparent lack of pro-active action against fraudsters. I am told that banks do build up a database of these fraudsters, such data is shared with the Old Bill and that they are really after getting at the big boys. Naturally (though I find this hard to swallow as it smacks a bit of a cop-out (no pun intended)) I am also told that Plod and such are not willing to share the details of what they are actually doing. Fraud (apparently) is not a priority the Police feel they need to follow up on. They are, after all, far too busy counting the cash from their speed cameras.
Well, that’s not good enough. Going for the big profile fraudsters is all well and good but in the meanwhile there are a lot of little ones who are laughing in the face of honest traders, nicking a few quid here, a few quid there and generally having a great time – as long as they stay small – medium sized, even – there is positively no danger of the local constable heave-ho-ing into sight and carting them off to chokey.
Do not worry, because Her Majesty’s Grateful Government has set up the National Fraud Authority which has, er… meetings about fraud, “puts its weight” behind things, has some more meetings (but out in the regions) and, no doubt, “engages with the stakeholders” as well. In other words about as much help as a road hump on the M25.
There is enough focus, legislation and action on firms and traders ripping off customers – there is virtually no focus on customers ripping off firms. When was the last time “Watchdog” had a piece on how these people get millions of pounds of free goods off honest traders? Nope, I can’t think of one either.
So what would be helpful? Firstly, that someone in the local Constabulary recognises this problem and takes possession of it. We need someone who we can go to – traders need a active feed into the sharing of information by the Merchants Services and the Police, Secondly, they could also do with a list of those people whom one may wish to choose not to do business with (after all, insurance companies share info about postcodes). Not, I might stress, a blacklist, but just a list of those whom one may wish to avoid. Thirdly, traders need to see something is being done on the ground, not just in the stratosphere of organised crime. That means a bit more than merchants service types sending round the odd missive about watching out for customers wearing stripy shirts, with a black handkerchief tied around their eyes and carrying a bag marked “swag”.
Failing that, I may just as well get some credit card details from somewhere and start ordering…..
Fraud – How to get rich!
Posted by murray in Latest News on August 5th, 2009
Lot of talk about fraud and how horrible it is and how people get affected by it etc., etc. Lots of missives from the banks to merchants about checking this and checking that. Lots of chat about various scams going on and how people are making off with everyone’s money etc., etc., etc….
And it will not stop. The reason it will not stop is because nobody is actually doing anything about it. True enough, the powers that be will warn you about it and suggest ways of not being caught, what to look for and so on – but nobody is actually doing anything about it.
For example, I picked up a fraudulent transaction going through the website. This was a customer trying to defraud a retailer (Yes, it does happen). I collected all the information and evidence and because there was enough time, duly reported the facts of the matter to the Police, thinking that someone may like to go and bring the fraudster to justice. A very nice, (highly trained to be) concerned-sounding sort of person logged all the information, thanked me for reporting the matter and then…. well, and then nothing. Rather like going to the Doctor and then being told “Now, here’s two aspirin” – in other words, naff off.
The most irritating bit, was that the fraudster had the card details, name and address of a real live person. I could not contact that real live person, so I thought that I would contact my merchant service provider and ask them to get hold of the person and let them know that they had a problem. Nope, not interested. My provider has one of those sub-continent service centres, which means that you are talking to a highly trained parrott – my suggestion did not fit the call flow-chart and given that these places have all the initiative of road hump – the request was not understood and so fell on deaf ears. They were not going to lift a finger because they did not know which bank to contact – Really? So how come they can do a name and address check when it comes to authorisation?
Merchant providers are not actually interested in catching these villains – they are not really interested in the welfare of their cardholders and certainly not the welfare of their merchants. Sure (as I said) they will give you lots of “advice” on how to “protect” yourself – indeed, the merchant service providers “club” dish it out by the bucketful – but the reason why they do so is simply that it costs an arm and a leg in administration costs sorting the mess out. So, if they can cut the administration costs, so much the better. Otherwise, merchant service providers are more than happy – if the cardholder gets diddled, they simply charge the merchant back and if the cardholder takes money that he or she says they didn’t take, then MP’s simply say “rubbish, prove it” – leaving the cardholder with a stonk of an uphill battle trying to prove that he (or she) was in Land’s End at 19:00 on the 25th and not in Aberdeen.
Actually catch the fraudster – even when there are enough facts, is to much like hard (and costly) work – so it gets left to the hard pressed Constabulary who, as we know, “do not have the resources” (i.e. money) to send a couple of blokes round to feel someone’s collar.
So fraud is alive and well and will remain so as long as fraudsters can keep on going in the sure and certain knowledge that there is and always will be, one born every minute. They know that Banks and other institutions will keep on trying to “educate” people – but above all, they also know that no matter how many times they try it on, the magic words “lack of resources” will mean that no-one will coming knocking on their door.
Why (Some) Things About America Irritate!
Posted by murray in Latest News on August 5th, 2009
Dont’ get me wrong. I have a lot of time for our colonial cousins and in the past they have helped us out and for that we Brits are and ever will be, grateful. Even if they were four years too late. And they had to be kick-started by an Eastern Power.
This morning, amongst the emails was another of these “How to Do It – Webwise” type missives all about why everything I do on my website is wrong and why they are right. These articles invariably are about stating the blindingly obvious – and further, repetitive. Nothing wrong with that, I suppose, but it is how they do it, which irritates the hell out of me – and the repetitiveness..
The first thing you learn about American websites is “scroll to the bottom”. The first chunk of any USA website copy is all gushing about everything under the sun and how you are going to make so many millions by simply getting out of bed. Look, I’m not, I know that. Please – Don’t treat us all as complete egits. So, you always have to scroll to the bottom and then read back up, to see if it was you want.
The second thing is colour. Now, Americans have a rather, erm, eclectic sense of style. Take a look at their cars – I mean, who manages to travel in one of those big Chryslers that they brought over here, without feeling like a class one berk? Likewise, you see the American version of style on home grown websites – and it consists of gawdy colours and floral script. Hmmmm…..
Thirdly, adverts. Slap bang in the middle. The fact that most of us have gadgets on our browsers that edit these out seems to escape most of the US Website “gurus” and in any event, they are usually of a similer, gushing nature that makes us want to go to another website.
But, above all, it is the “one size fits all-ism” that is worst. We know that most Americans do not own passports and have never been out side their own homeland. Many have never been outside their collective ego’s. So, most of what is written, is aimed at and strictly applicable to – Americans. I know, for example, that Americans have a real problem coping with a website that is not priced in US Dollars – as witness the number of emails I get saying “What are British Pounds?” The you get silly phrases: “Tomatoe growing” (sic) “apples to oranges” comparisons “value build-up” “the value of the reason why” . Worse of all, this corporate mumbo-jumbo inevitably turns up on our shores and we have to spend time translating this garbage back into proper English.
By all means have a view and suggest that view – but please, just because it works your side of the pond, do not assume that it works on this!
Well, That Just About Sums it Up For Travel…
Posted by murray in Latest News on June 5th, 2009
Now everyone really has lost the plot. Credit card companies have decided that the best way to get their money back, after a tour company collapses, is by simply re-charging whoever sold the holiday in the first place. In other words, you buy a holiday from Expedia or even Joe Blogs Travel and the tour company goes up the Swanny, the punter gets his money back from the card company who in turn recharges the travel agent. As that Meerkat would say, “Simple, Huh?”
Not quite. Agents are not mega-rich people who have fistfulls of cash floating about the place. Secondly, in case anyone hadn’t noticed, they are agents. That is, they flog the holiday and pick up (hopefully) a (small) commission as a result. Recharge any agent for a couple of £5,000 holidays and you will simply bankrupt every agent in existence. Overnight.
Coupled with this assault on an already fragile sector of the industry, IATA is thinking about taking money every two weeks rather then monthly. The agent will barely get enough time to get the money off the client before airlines, operators, Uncle Tom Cobbly and all are jumping up and down like startled rabbits demanding the agent pays over everything they have including two pints of blood and a small mortgage “just in case”.
Trust has gone with the agency system (I hate the term “model”, let’s deal with the real thing). In any shape or form, online or offline.
Decisions need to be made and the most fundamental one is if airlines and operators wish to distribute through any – and I mean any – kind of agency type arrangement. It matters not if they are on or offline.
What benefits do travel agents, of any ilk offer? Without them, you have to do it yourself. Large operators have the ability to do this and so too would major airlines – at least those airlines that see the UK as a main market. Airlines do have an issue. They do not want to pay for distribution, but at the same time do not want to have to incur the cost of doing it themselves. Legacy airlines view the Easyjets of this world with envy. Easyjet manages to sell their product almost exclusively online; but then again you can do that with a simple and restricted product range that does not need to interact with anything or anyone else. This is not the case with legacy airlines – or indeed, any airline which has a global network – or anything resembling a network, for that matter. As soon as you need to interact, there must be a mechanism to do this and the GDS booking method does this very well. Over time, airlines have, however, lost the ability to network well. They have drawn in their horns and really only want to sell their own product; or at best, their alliances’ product. Fine, perhaps, if you are in the Star Alliance or Skyteam – but Oneworld? BA has no-one left to interact with on anything remotely resembling a “world class” alliance.
The trouble is, when airlines are required to interact, unless an agent can accomplish some tidy footwork, these are invariably for big ticket journeys – valuable top level income which airlines really do need at this time. So, legacy airlines do not want to do the fiddly stuff, they do not want to pay agents to do it and they want the money for it yesterday – but they desperately need this top level income. They want their cake and they want to eat it.
Large tour operators have a love/ hate relationship with agents. Some, such as Thomson, have their own de facto chain of shops and have the resources to “train” staff (ie teach them how to flog their product over anyone else’s). But even Thomson are not TESCO – they do not have a shop every so many miles, so they need to cover the gaps – and the agent does this job for them. Like airlines, however, they do not want to pay for this distribution. Smaller operators are the one group who do use agents and do pay them for referring business; the trouble is, all the small operators together, do not provide a wide enough offering to pay for and maintain a high street presence. The small operator can go online, yet here he faces the issue of reach and exposure; if one is a small operator offering mainstream resorts, then the cost of getting noticed on the internet can run into many, many thousands of pounds.
Now, let’s layer onto the above, the issues of bonding, regulation and now, the cost of even being able to take money off a client. The point is, no-one is going to sell something if they cannot make a reasonable return. Brewers tried this long ago – instead of saying “you pay a low rent and we make money by selling you beer” they said “That property is worth £5mill and we want 10% return from you – You can do what you like” Result: No pubs. Reason: Because there is only so much available in any one transaction. Each person can have a portion of that pie, but as soon as the dominant party wants someone else’s share, the system collapses.
The other reason agents are useful, is because they are retailers. They sell stuff and they sell in volume. The likes of Expedia and Travelocity sell travel and travel products. They are good at it, it is their speciality. AMEX sell business travel (so do I – Plug, plug – and my fees or low ‘cos I have a low cost base!!) they are good at it, they know what the customer likes and understands the customers needs. British Midland, say, run airline services – that is what they are good at. But wholesalers and especially “manufacturers” do not make good retailers – you do not see any DIAGEO shops about, do you? Many airlines have appalling customer service systems, often based in parts foreign, staffed by parrotts or the cheapest humans they can find, with little, if any holistic training. There are airlines, such as BA who have customer service facilities which are excellent, but this is the exception rather than the norm. Most low cost airlines even go as far as to discourage customer contact. The question remains as to how long this style of operation can last.
Agents are a useful intermediary, a foil, twixt client and travel provider. Not all travel, by a long chalk, is simple. Some of it is very complex – not difficult, just complex – so there is a place for “technicians” who have an understanding of how travel works. People who know how part A bolts onto part B. Yes, tour companies and airlines could do this themselves but we come back to the training thing – or rather the total lack of any form of holistic travel training and that no-one with any nounce is going to train themselves for a business that pays rubbish money and shows little if any prospect of real wealth. Ultimately, this leads to “Bankers Syndrome” – as with RBS, one finds that no-one at the top knows anything about Banking. And we all know what happened next, there.
This all leads down a path that leads to a lose-lose situation. As the returns get less, there are increased attempts by various bodies to regulate. More regulation leads to greater cost on the on hand and so even less return on the other, a deep spiral that so encourages the darker side – and with the presence of the internet meaning that one can distribute on a global scale with virtual anonimity – it is easy for this dark unregulated side to take over. Large operators lose their incremental sales and airlines lose their ability to market their high end products – unless they wish to do everything, and I mean everything, themselves.
So the big question remains and before anyone in the travel industry goes any further, it must be answered: Do travel providers wish to do everything for themselves – or do we retain the off and online agency style distribution system? If the answer is no, then fine – get on with it. If the answer is Yes, then the agency system must be allowed to be profitable – and must have a voice that is respected and acted upon by the suppliers. If things just continue along the same road as now, we will see just a few online retailers and a few high street retailers (probably a combination of both – eg Expedia shops) and these retailers will simply dictate who can sell what, for how much and on what terms. Can’t happen? Well, it has in many other fields – Grocery, for example, or computers or DIY….
Murray’s Competition – Part 1!
Posted by murray in Latest News on May 29th, 2009
Not relevant at all - My eldest at Niagra Falls.
So, let’s put it to the test.
The challenge is to fly around the world for the least amount of money. There are some rules:
1. The trip must include a touchdown in Europe, Middle East, Far East, Africa, Indian sub-continent, Australasia, Northern and Southern Continental America. You can start from where you like, but your start and finish must be at the same airport.
2. The itinerary must be fly-able. For example, if you connect from a legacy carrier to a low-cost carrier, the connection must be practical.
3. Backtracking and anything else is allowed.
4. There is no time limit, but extra points awarded for the fastest trip.
Prizes – we need some. So would any airline or hotel group who would like to contribute some free flights or hotel nights, please let me know. Now would be good. So, won’t cost you any money just some flights and hotel nights! And a lot of Twitter/ Social Networking promotion.
These are the basics. So, before we launch away, if anyone has any comments suggestions or tweaks, let me know now. The prize, by the way, would be for the cheapest workable itinerary – you don’t actually have to fly it (unless an airline will sponsor such a prize!)
Why Airlines and IATA Need To Tread Carefully…
Posted by murray in Latest News on May 16th, 2009
Airline revenue falls, BSP revenue falls – BSP being, amongst others, the monthly income payment that airlines received from travel agents – panic sets in. So, what are we talking about? The figures do look big – BSP churns some 240 billion dollars worth a year; a fair chunk of that being from the 58,000 travel agents world wide. IATA-BSP lost, last year 85 billion in bad debts – horrors! Well, not really when you bear in mind that this represents some 0.35% of turnover (an expression used loosely). Now, airline revenue comes mainly from BSP – some 80% to be exact – which means that travel agents – online AND offline – still represent the main source of airline income, despite the increasingly despotic attempts by airlines to drive traffic away from the various agency networks.
Of this BSP income for the airlines (and about 95% of the world’s airlines are in IATA BSP – and certainly nearly all of the “legacy” carriers) 80% of the UK airline income is generated by just 140 of 1,300-ish UK IATA agents – and half of it by just 30 agents (thank you, Travel Weekly).
The knee jerk reaction of airlines is to demand that BSP (and so, agents) start paying every two weeks rather than monthly, as they do now. In other words, the airlines get less money but on a more regular basis. Failing that, in order to “stop the bad debts” (which is running at, you will recall, 0.35% of turnover) IATA BSP wish to impose bonding on everyone who looks even slightly less than gold plated. This, at a time when bonds and loans are, of course, very easy to come by.
From this, we can deduce that airlines have clearly failed the marshmallow test. Take now! And hang the consequences! Well, What are the consequences? Agents, especially, will remember British Airways arrogantly proclaiming that they “Did not owe agents a living” whilst taking away the commission paid on airline tickets. Fine, said agents, who went away and in the words used in a PhoCus Wright study promptly “….. responded strategically, tactically and most of all aggresively to adapt, survive and succeed” in other words, showed the airlines two fingers and got on with the job of selling travel.
The worm turns, agents (and remember I mean online as much as any other; even Expedia and Travelocity are agents) do not owe airlines a living, either. There is a mutual dependency – the likes of Travelocity are very good at what they do, retailing (or shall we say, distributing content) whereas airlines are supposed to be good at what they do, which is shipping people from A to B. Travelocity et alia make a profit; airlines don’t – which says an awful lot about who actually owes whom, what. Airlines (and to a greater or lesser extent IATA) still ponitificate Canute-like about what they are going to do. Actually at the moment, they can. Just. Where they are taking their eye of the ball, if they ever had it on the ball, is by not watching those BSP statistics. That 50% of their income is dependent upon 30 agents – such as AMEX -at present.
Any precipative action, such as going to two week payments may well have exceedingly uncomfortable side affects, say 80% of their income coming subsequently from 30 (or less) agents. Why is this? Simple – “Divide and Rule”. Airlines could only pontificate and rule the roost because they had a wide and diverse distribution network through many channels, they did not need to really listen to any one product distributor simply because there wasn’t one. Yet, since the demise of commission, there is – or rather there are 30 of them and as they impose more onerous restrictions that number will fall, or rather that 30 will control and ever greater share of the income pie – and that is when you really start to sweat.
You do not need to be an expert to see this all too clearly. Where do you buy your daily bread? Yes, TESCO, Sainsbury or ASDA . Where did you buy your last PC? Yes, PC World or DELL. Your last thingy for fixing that irritating squeak? Yes, B&Q, WICKS (or Halfords, depending). Take the old IBM story where arrogance spawned Microsoft. Or just take a look what has happended to the local pub, even. All these are examples of what happens when people take a short term view by people with a short term interest. Airlines are lining themselves up, very nicely, thank you, for exactly the same treatment. They will soon be told what they can sell, where they can sell it and for how much. They behave or wallop! All that valuable, say, BA, trans-atlantic traffic goes to AA or UA or VS.
Of course, airlines say that they “talk” to the agents (Talk rather than “communicate with” – of course) but to whom are they are talking? Yes, you are right, to that 30. And that 30 have their own agenda, which is, of course, to control 80% or 90% of that BSP revenue, not 50%. I do not know what the critical mass is, but it cannot be far off. So, AMEX becomes the air travel business’s answer to B&Q. If you are an airline, you do what AMEX says, or you get nothing. Up to you, of course. Yes, they can distribute themselves and will have to. What we have here, however, is a service providor, a maufacturer, trying to retail and as I say, retailers are a lot better at retailing than manufacturers. Just look down the Times Rich List. Even Old Beardie once answered the question “How do you become a millionaire?” with “Start with 10 million and open an airline”.
So, airlines need to think things through (they won’t) and so does IATA (it can’t – think, that is). IATA is a body which believes that Stalin’s way of doing things was rather soft. And Airlines, like Sir Anthony Eden, still think they rule an empire. Things have changed dramatically over the last ten years or so and will indeed continue to do so. It is just intereting to note that the very architects of that change process, those that pulled down the orginal edifice with first checking to see what still needed support, now find themselves in turbulent air whereas those they lectured about that change, the agents, have quietly and efficently got on with the job. Airlines and IATA can talk the talk, they just cannot walk the walk.
Saving Money on Travel
Posted by murray in Latest News on May 12th, 2009
Once upon a time I wrote an article on this subject and the unabridged version, for those that really want to have a go at saving money on travel, is available on my website. This is the short version to get you thinking.
Fact: The quickest and esiest way to save money on travel, is by not travelling in the first place. Recently, many firms have found out that, since they cut back on travel, they have not gone bust, the company has continued to function and life, as such, carries on. Do you really need to be there, I ask. Let’s face it, the East India Company managed to trade from Calcutta back in about 1700 and frozen to death when a trip for a meeting would have taken the best part of a year. Yet they traded, and traded very well. We talk, now, about living in a “Global Economy” – yet we have always lived in a global economy, even the Romans spent a lot of time trouble and effort keeping their trade routes open and even fought a nifty little war with the Persians over a matter of rights of access. So, don’t pretend the “global economy” is something new.
How did they manage, we wonder, without travel? Simple. They delegated. They made sure that the people in far away lands were told precisely what to do and what was expected of them and if they did not perform then they got their head chopped off. The means of motivation has changed just a tad over the years, but the principle remains the same. So, do you really need to be there?
Fact: When you call the travel agent or go to book online 99.9% of all opportunites to save money have been lost. Let me make this clear, saving money has nothing at all to do with which company you use, if you use self booking tools, have a strict policy about only travelling in economy, drink three cups of coffee before breakfast or have a policy checker living in a little office on the thrid floor whose name is Frederick. It is to do with thinking about why you are travelling, could someone else who may be going a few days later or earlier, deal with it? Will the journey you are taking produce a measurable, tangible benefit for the company? Or are you just travelling because it seems like a good idea? Believe me, I know some very senior managers who have saved a lot of money by blocking people going to, say, conferences because the only reason that the intended travellers could come up with was “Well, we ought to be there”.
Here is another thing – “We” – not just “I”. There are still companies who have to travel in multiples of 3 – or even 2 – for no other reason than “two people always go”. At the end of the day, it is not the travel that one needs to look at, it is the why that travel was generated in the first place. In my article I suggest that what you should do, is to take at random, three or four travel “events” and get whoever went to write down the net tangible benefit the company received from those events. Let’s see it in hard cash.
There are, of course, things that you must travel for, system breakdowns, for example – but even here, if there are a lot of these, the answer lies not in trying to shave off £10 from a round trip to Delhi but in looking at your kit and finding out why it breaks down so often.
Many look closely at the expenses of a trip, at systems to closely monitor those expenses. Many look at their flight costs and use all sorts of techniques to analyse their travel costs and produce reports to discuss with airlines special deals. What I say is don’t bother. It’s pointless. UNLESS you first look at the reasons behind each travel event – because unless that travel event can produce a hard nosed benefit for the company, then even £1 for a flight is £1 wasted.
Just a thought!
Why Travel is Failing it’s Public
Posted by murray in Latest News on May 5th, 2009
After writing about stabiliser, which may be a solution to the ills we face, we should take a look at the problem. Here, I am thinking about the recent collapse of Freedom Direct and wish to pose some questions as well as areas where travel is clearly failing to provide reassurance.
Travel is a funny old world and comes complete with it’s own language, it’s own sayings and it’s own way of doing things. In many ways, it is unique; one of which, is that action to any request is usually required now. It’s no good getting around to sorting something out next week, if the client is stuck at Amsterdam airport and should be in Paris. The trouble is, the travelling public are simply not au fait with travel’s unique language and foibles. What is clear, however, from many of those that booked on Freedom Direct is that they are genuine folk from all walks of life and not all from a strata of society that can grasp the basics of rocket science in 10 seconds flat.
One thing the EEC managed to bring was chaos out of order and between them, the fumblings of HM’s Grateful Government, Trading Standards and the FSA, they have managed to create an impenetrable forest of systems and procedures which leave even travel agents dazed and confused. Heavens knows how Jo Public is supposed to understand it – so in turn, Jo Public is left dazed, confused and above all, angry. Very angry.
What do we need?
1. An understaning of what can happen if a modern agent goes down. In the past, we have had to deal with operator crashes and airline failures, where things have, on balance, been fairly clear cut. There is a side issue of bonding of scheduled airlines, but that is a debate for another place. We have had travel agents go down but what we have not seen, is large-ish online agents go down. What we are not prepared for is, say – What would happen if Expedia went down? Or Ebookers? This can never happen, of course. Just like Rolls Royce cannot go bust or Coca Cola cannot make a major cock-up with bottled water or the banking system cannot fail. So let’s get real, can we cope with a major online failure? No. The powers that be need to stress test their systems now.
2. A clear route map for those in trouble. ABTA deals with their bit, the CAA theirs and if one is lucky, another agent comes along and tries to pick up the pieces. Trading Standards could not give a rancid roadkilled rodent, the Financial Standards Authority now holds, in the eye of the Public, about as much respect as one may give, say, a small piece of green goo and the credit card companies try and fob people off by telling Jo Public they should claim from ABTA, the CAA or a little man that runs a road side cafe just off the A34. In his blog, Alex Bainbridge suggested that we (I hope, meaning the travel industry) should make more of an effort to help those who get into trouble, at least to evaluate their booking paperwork and point people in the right direction. This, he suggests, may be a task that could be undertaken by the newly retired or the newly unemployed, though I think the former may be better – in their circumstances, Jo Public, I am sure, would feel better if they were asking a “wise old head” .
3. Make sure that such systems that do exist, work. Certain firms bask in their membership of ABTA. Yet when the chips are down, they seem to forget this. ABTA, inter alia, winds up having to beg, cajoal, shout at and bang heads together in order to make the system work. This is not good. If you accept the mantle of respectability any upright trade body holds, one must act and abide by the precepts that mantle gives – and at all times. And especially when the proverbial hits the fan. One hotel booking company I saw in passing, displays ABTA membership on its front page – even a travel industry award – yet you have to route around to find the number. That said, it is an improvement. Bonding is the big issue. Yet who is bonded and for what? To whom? IATA bonds agents, but that is only to make sure that the airlines, not Jo Public, get their dosh. Advantage bonds agents for their CAPS (a direct debit system for agents to pay the tour operators) which indirectly holds a fair chunk of money which can help Jo Public. ABTA bonds, the CAA bonds – the list goes on.
4. Explain in simple English and keep procedures simple. The travel business needs to learn English and a version of English which all can understand. This is, of course, closely tied into number 2, for I have heard it said that instructions on what to do and how to do it, have been issued by all sorts of people – but a lot of it is in travel speak; starting with “a package holiday” – very few, outside (and by all accounts, some inside) the travel industry understand what a “package holiday” is and more importantly, how it is presented to them. People have received a travel agents account for, say an Easyjet flight, yet that money has been debited direct from the clients card by Easyjet, not the agent – we in travel know what is going on, but as far as many are concerned, they are wondering how Easyjet has got their credit card details (Easyjet have done nothing wrong, by the way) Since the demise of ABTA as the “WYSIWYG” one-stop-bonding-shop, Jo Public has to become a travel agent – and quite a skilled one, to boot – to work out, even, whom to call first. It is no good writing reams about catergory this and category that – asking a member of the opublic to see if they hold a holiday booking where Freedom Direct “….acted as agents for other ATOL holders” is the same as asking me if I could go and fix the CERN proton speeder-upper, thingy, device. Keep it simple and clear.
5. Restore Honour. Very important. Company fails and suddenly, up pops the same outfit under a new guise as if nothing had happened. Not good enough. If you fail, you fail. Certain firms have failed and some people treat such failure as no more than an occupational hazard. This is, from an industry point of view, less than constructive and demonstrates a total lack of sensitivity. Those that fail should be required, freely and voluntarily, to help sort out the mess. To man the telphones, to explain. The trade bodies that do exist, do not have enough staff to cope with big, complex failures (see “stress testing”, passim) but what they should have – what we in the industry should have – is a voluntary system that can click into place to, at least, explain to those that have been caught up, where they should go for help. If required, then those in the travel industry that do help (including the frontline troops of the failed company) should be paid a fair sum and such money should come from – and be part of – any bonding system.
6) Bonding should come, once again, under one body. For everything. The old stabiliser system was, effectively, a one-stop-shop. Though I bang on about getting back to this old system which worked, I also recognise that to do such may not be practical. We must, though, co-ordinate bonding under one body (ABTA would be the obvious one). Bonding must be complete and we in the travel industry must stop trying to find ways around it. One of the complaints about the old Stabiliser system was the high entry barrier and many of the larger operators objected to the large bonding sums required. People sort ways out – or rather -ways around it. Some even threatened to leave some trade bodies, if those bodies did not do things their way. This was and is, despicable. The level was high because firms were dealing with large sums and had low margins. Those large sums (as I have said before) would be a hard working famillies biggest single annual outlay. Protection for that money, that outlay, is not something that should be “got around”.
The above may not be a pancea, but it may be a start. As we have progressed the road of regulation since 1992, we have branched out, turned around and that wide open motorway has withered to become tiny lanes through the backwaters of the industry. We do not need more regulation, or laws or instruction. The pieces of the puzzle are already on that broad and open table, we just need someone to fit them together. To understand them and to translate them for a public whose respect and tolerance for an industry that was once hailed as a beacon of self-regulation, has sunk beneath a mire of verbage and confusion to a shameful level.
Getting Travel Stable
Posted by murray in Latest News on May 3rd, 2009
I don’t really “do” holidays. I used to, but nowadays I just stick to business travel. It’s easier and involves none of this reasearching and quoting only to find the client has gone off and booked somewhere else ‘cos it was n pounds cheaper. Fine. Do your own research or get someone else to put in quite a few hours work for nothing.
The failure of Freedom Direct heralded something new, that being an internet travel company going down the tubes. Why this is new, is because, unlike days of yore, there is no immediate ability to achieve face to face contact – something which clients who stood to lose their holidays would much prefer to have. If a tour operator went bust, you marched off down to your travel agent and were able to talk to someone. You could get some sort of satisfaction from knowing that a real human was dealing with your plight. An internet travel outfit may be miles away from you, even in another country and there is no “local” shop to go to. True, people used to book direct before the internet, but these were with companies whose name you did see in the “local” shop and this brought a sort of comfort. The plight of some of those caught in the FD collapse is well reflected in the travel-rants blog.
So, what can be done to get some sort of stability back? A while back (pre-1992) and before the EEC started their usual business or running around, identifying problems that did not exist, analysing them incorrectly and then applying wholly inappropriate solutions, we had something called “stabiliser”. Stabiliser came about in the early years of mass travel after a company called Fiesta (and a few others) went bust in about 1960- something, stranding many holdaymakers abroad and costing many others their holidays, without any form of redress. Why this was important, was because the annual holiday represented a huge chunk of a families’ annual outgoings – in fact probably the largest chunk of peoples’ annual outgoing. Secondly, it was also realised that in holiday travel, you take vast great sums of money and sit on them for quite a while. Given the tight margins, occasioned first, by the desire to offer cheap holidays to a mass market to get the market going and subsequently the “Oh! Dear! We have done this cheap bit rather well and now can’t get the prices up to a realistic level” – wise heads at ABTA realised (rather than the Government of the time, realised) that something should be done about this – PDQ.
What they came up with was “stabiliser” and it worked like this: In order to sell an inclusive holiday, that is, a hotel and a charter flight and all the gubbins together in one lump, you must supply a bond. In order to put together all the gubbins, you must supply a bond. And everyone must be a member of ABTA. An ABTA agent may only sell ABTA bonded opertors and ABTA bonded operators may sell direct or only through ABTA bonded agents. And do you know what? It worked! You did not have to worry about anything, how your holiday was booked, with whom – it could be with a big operator or through a bloke who also ran a small fish and chip shop just south of Hull, if they were ABTA – you were covered.
ABTA policed this vigorously and with real teeth. Failure to perform according to the Code of Conduct meant fines – some quite hefty. No pay and you were slung out and bang went your livelehood. The public were educated that the ABTA logo meant what it said – security – and even though some notable crashes such as Court Line, Intasun and Exchange travel nearly broke ABTA, the trade rallied round and no holiday maker ever lost out. Ever. This was WYSIWYG protection.
“Hang on!” said the Office of Fair Trading, “This is a cartel!” Yes, it was but to so high an eminenence had the cartels’ credit been advanced that the Court of Appeal, in the mid-1980’s ruled that it was in the public interest. It was a cartel that you could, however, get into. It was not an exclusion because people were black-balled – you had to fulfill certain criteria. You had to have a set amount of fixed assets and or capital, you had to demonstrate profitablility, you had to acheive certain standards in your shop or operation, in terms of trained staff and qualifications, you had to make returns to ABTA showing your trading situation and ABTA could (and did) come around to you and check – and unlike, it seems, the FSA, the ABTA people knew what they were looking at. Indeed, even the House of Commons highlighted ABTA’s governance as a shining light of trade self-regulation. Yes, the system worked and it worked very well indeed.
There was a regional system of elected management within ABTA with elected members who were, in the main, our wise heads and some of the greatest luminaries of travel. Some vested interest moaned because bonding was a large cost, which was strange, because the level of you bond reflected how well you ran your business and how stable it was (IATA, at that time, before IATA became an outfit that makes the Stalin regieme look saintly, did pretty much the same thing) and the barrier to entry was high (why not?).
There was another issue that, once a tour operator was a member there was no guarantee that all ABTA agents would sell your product, just that they could . Some moaned that that was unfair. Here, the simple point remained, if your product was good, agents would sell it, if it wasn’t….
There was none of this nonsense about what is a package, what bit is covered by what, who is responsible for what and so on and so forth. One agency for bonding, one point of contact. It was simple, it was effective. Hell! Even the airlines liked it! For selling their discounted air products, they knew they were dealing with (even though they did not come under the ABTA banner as such) a stable and secure agent.
Anyway, we are stuck with the unholy mess we have now, because the simple maxim “If it is not broken, do not try and fix it” was for the EEC and others, to tempting to resist. We could look at a return to stabiliser but there is not, yet, the political will and it would mean telling Brussels to go in the general direction of away. Further, the wise heads of travel have in many cases passed over and what we are left with are people within travel whose motivation may not be so widely directed towards the good of travel in general; more to personal profit and interest. Travel lacks Statesmen; youth took apart the past and threw away the instruction manual. Progress is good and neccessary, new ideas are welcome and we need them, but perhaps we should not go from “new idea” to “full implementation” in less than 5 nanoseconds, not when we are responsible for so much, for so many.
