Is it illegal to obtain a travel agent license simply to get discounts in hotels and airfare?

Question

My friend told me about how she got incredible discounts on hotels and airfare because she registered as a travel agent (Utah/USA) and many places offer high discounts to agents. She obtained her license by working through another agent in her neighborhood. I wasn't aware she was working, so I asked her more about what the job entailed and she told me that she doesn't actually provide her services as an agent, she only uses the license to get deep discounts for her own travels.

I don't think I can convince her it's fraud, but I don't want to see her in jail. I couldn't find any sources online that said one way or another whether it is fraudulent behavior. Are there any referencable sources I can point her to that could be helpful? Or is what is she doing entirely legal?

Also, unfortunately, I don't know any more details about her license or method of obtaining it as we spoke in casual passing about it. I can probably ask her though, if necessary.

Answer 1

The Utah Department of Professional Licensing does not issue licenses for travel agents, and there seems to be no evidence of a statutory requirement for licensing. Therefore it's unclear what status this license has. I did see a number of online places offering to train people to be travel agents, and perhaps one of them offers a certificate of training.

There is such a thing as an IATA number, and some hotel might require providing one's IATA number. If a person does not have an IATA number and the hotel does not verify the IATA number, then it would be fraud to falsely make up a number in order to obtain a benefit. The person could be sued to recover the amount of the discount. If the person has an IATA number, then there nothing obviously fraudulent, but you would have to inspect the conditions for using an agent discount.

IATA requires you to work at a registered agency to get an agent number, and the proof requirements are substantial enough that it would be surprising if a person could get away with just claiming to work at a travel agency. The organization would certainly be in a good position to sue a person for falsifying the application (note also that the application is subject to binding arbitration by the Travel Agency Commissioner).

So it depends on who gave the discount, what the required, what if any accreditation was used to get that discount, and what the actual facts are (i.e. does the person actually work for an agency making at least $10,000 a year).

Answer 2

I'm a fraudster too

I am a licensed pesticide applicator. That means I can walk into any wholesale supply house in 5 states and get the most potent pesticides. The trade-off is I forfeit the right to claim honest mistake if I poison a creek or something. I only use it to spray my own properties.

My buddy is a licensed real estate agent but doesn't practice. When buying houses to live in, my buddy gets the 3% kickback given to the buyer's agent. But has to follow professional rules.

Then there's Doctor Steven Strange, a fully qualified brain surgeon whose day job is running a magic shop.

So a lot of licensure is like that. You get access to The Good Stuff in exchange for agreeing explicitly to the rules of the trade, paying professional fees, or what have you.

But is it fraud if it opens job paths?

Consider a hypothetical world where an online booking site got caught out doing something horrible and everyone flocked back to real travel agents. Problem: the pipeline for qualifying travel agents is finite and cannot bear surge demand. In situations like that, they tend to fill surge demand with people like your friend. So yes, your friend does add value to society simply by being credentialed.

Answer 3

Business licensing of this type has 3 different tiers, really. Let's talk about each one.

Government certification

Where it's needed to protect citizens, governments will directly certify people to certain jobs. A structural engineer or airline pilot will be government licensed.

It wouldn't surprise me if the government is not involved in travel agent certification.

NGO (non-profit) industry associations

Who decides if you're a lawyer? Not the government - the Bar Association. The National Fire Protection Association writes the North American electrical code.

When a responsible NGO is already in place and doing a good job, the government often defers the role to them. The NGO is at their discretion to make prudent decisions about who that is. They can then sign contracts with that person, and that contract binds the person to whichever reasonable thing it says.

Private company networks.

Some industry infrastructure is run by private companies. A travel agent needs SABRE, a lawyer needs Lexis-Nexis. The companies can give access to anyone they want, on contractual terms which they choose, consistent with their profit motive and health and happiness of their user base.

These companies would be most interested in you keeping your contractual agreement, so they'd be more interested in your credit score than your test score.

Hotels, airlines, and others within the travel industry can also grant discounts to anyone they please, on any contractual terms which they please. So they are free to "turn the knobs" on those agent perks - they could say "only travel agents who have made at least 100 bookings in the past year"... or not.

In short: if these NGOs and private companies want to permit "anyone" to register and qualify as a travel agent, they are free to do that.

A method to their madness?

I suspect the industry is well aware of the "abuse" and tolerate it because at the scale it's happening now, it's more a benefit than a nuisance. (that could change if it became too popular). The benefit is such people are actually some of the most experienced candidates to be an actual travel agent. So they are "seeding" future agent candidates for the cost of some perks.

It's hardly the strangest thing industries have done to recruit. Airlines cut the "number of flying hours" required to become a commercial pilot to a paltry number, degrading safety in the eyes of many.