Free You Can't Cheat an Honest Man by James Walsh

agents are told can be used to obtain a variety of travel-related discounts.
    The card mills can do this because the travel agency industry isn’t regulated by any law or government authority. Its standards have always been self-imposed and self-regulated.
    In all, this environment is conducive to pyramid schemes.
    Of course, they don’t admit they’re running pyramid schemes. The perps doll up their promotions with high-minded language. They promise to train people to become so-called “outside travel agents,” part of a network of independent operatives who can make commissions and enjoy travel benefits—in exchange for channeling their sales through “inside” agents working for the parent company.
    Established travel agents rightly point out that the outside agent programs are simply multilevel marketing operations. There’s nothing wrong with that. But the establishment groups go farther, arguing that the outside agent programs rip off unsuspecting travelers as well as hotels and airlines. They also claim that the outside agent programs pay members more for recruiting other outside agents than for booking airline tickets or hotel rooms.
    If true, these charges would mean the outside agent programs are—or come dangerously close to being—illegal pyramid schemes. One High-Profile Company
    One of the largest and best-known outside agent travel companies is California-based Nu-Concepts in Travel, Inc. It emerged as a leader in the growing trend in 1994, when it started aggressively recruiting outside agents by means of carefully targeted seminars.
    In its early stages, Nu-Concepts made a number of tactical mistakes that would later support the charges made by groups like ASTA and IATAN. One brochure for a seminar read:
    You never need to sell one reservation to enjoy these courtesies, although some may wish to provide that service to family, friends and business associates (and receive part of the travel agency commission...).
    The company disavowed this particular brochure as the work of one overly aggressive independent distributor. However, other company spokespeople repeated similar things. Even the company’s own “Passport To Success” training manual said:
    You can make a good deal more money by developing your contacts into Independent Distributors of the Nu-Concepts in Travel Independent Distributor Network.... You teach your contacts—a firm foundation of 5-7 people—to follow the simple steps you have followed.... Then, with your help, they each teach 5-7 contacts who teach their contacts...(and so on and so on).
    Whatever these statements suggested to long-time travel industry pros, there was no doubt Nu-Concepts was successfully attracting recruits. By 1995, the company had 35,000 outside agents responsible for generating almost $25 million in travel sales. According to Ron Cummings, Nu-Concepts’ marketing director:
    What we do is enroll and train independent outside agents and allow them access to our highly experienced travel agents. We provide our agents with the most up-to-date training materials, and they are backed up by a full-service travel agency, so customers get the same level of service they would get with any other travel agency.... We don’t encourage our agents to run to a hotel and say, ‘I’m a travel agent. Give me a discount.’ But, on the other hand, they’re just as entitled to any travel industry benefits as any agent.
    The industry critics were persistent, though, finding problems even in Nu-Concept’s success. The company’s own numbers indicated each outside agent was generating only between $800 and $1,200 in sales a year. This, after paying between $495 and $1,000 to enroll in the program.
    With those low sales numbers and high entry costs, ASTA said it believed that most of the company’s agents signed up strictly for the travel agent perks and distributor fees.
    To these charges, Cummings had a blithe response:
    The only reason [ASTA] is screaming about us