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ASTA Reiterates Opposition to Abuse of MLMs, Card MillsAugust 28, 2008 By: George Dooley
The American Society of Travel Agents (ASTA) issued a statement reiterating its standing opposition to abuse of multilevel marketing and card mills and distanced itself from remarks by former ASTA president Phil Davidoff that appeared exclusively in Travel Agent. Davidoff, who provides education and training for YTB, gave the controversial company’s business model a measured endorsement.
“Following on the heels of legal actions taken by various states, including California, against a multilevel travel marketing firm (MLMs), ASTA is reiterating its stance regarding MLMs and card mills,” an ASTA spokesperson said. ASTA did not mention Davidoff or YTB by name.
"While it may be possible for an MLM to operate within the law, when the rewards for participating individuals are based primarily on recruiting additional participants and not on selling the underlying product, it is appropriate for governments at both the federal and state level to investigate and act where deception and abuse are occurring” said ASTA President and CEO Cheryl Hudak.
"ASTA is aware of a recent trade article in which a former ASTA official (16 years ago) was quoted in support of a multilevel travel marketing firm that has been sued by the State of California, among others. He is entitled to his opinion, but let me be clear that while we do not question his right to a contrary view, ASTA absolutely does not share the quoted opinion about the probable future of the travel industry.
"Card mills are a different type of operation, in which the idea is to sell what purport to be travel agent credentials to consumers who are not planning to seriously engage in the sale of travel as a business but who are trying to secure professional courtesy discounts that are not intended for them. ASTA has actively opposed card mills for decades. We filed suit in California and the case was settled by our collecting and destroying the cards that had been issued. We also complained to the Federal Trade Commission, but our request for a trade regulation rule was denied in large part due to lack of support from the supplier community," Hudak added.
In 2005, as a way to educate the public about the harm that multilevel travel marking firms and card mills pose to the travel industry and consumers, ASTA released to Better Business Bureaus (BBBs) and consumer protection agencies across the country a white paper titled "What Consumers and Consumer Protection Agencies Should Know About Travel Industry Card Mills." At the same time, this white paper was made available to consumers on TravelSense.org. To read, go to www.travelsense.org/consumer/index.cfm. The paper examines how holders of card mill IDs differ from legitimate travel agents and what credentials legitimate travel agents may have. It details the ways in which travel industry card mills harm consumers and the travel industry.