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FTC Plans Sweep of Travel Agency 'Mills'

Crackdown: Operation targets do-it-yourself movement. Court keeps Irvine company shuttered.

March 12, 1997|JAMES S. GRANELLI | TIMES STAFF WRITER

An Orange County travel company that federal regulators closed last week is the first of about two dozen such operations nationwide that the Federal Trade Commission is trying to shut down, the agency disclosed Tuesday.

The sweep, dubbed Operation Trip Up, is the FTC's response to travel industry complaints that the fast-growing do-it-yourself movement is rife with fraud and deception and consists simply of mills that churn out little more than travel identification cards.

The FTC, with help from officials in 26 states, has quietly obtained temporary court orders against a number of other companies.

"It's a massive coordinated effort," Bonnie Jansen, an FTC spokeswoman, said of the sweep. "The idea is to crack down on those perpetrating a substantial amount of fraud. You will see more card mills as well as other different kinds of cases. And a lot will be from California."

The agency plans to detail its actions Thursday at a conference on travel fraud in Los Angeles, said Eileen Harrington, associate director of the FTC's consumer protection bureau.

On Tuesday, the FTC won a preliminary injunction that keeps World Class Network in Irvine closed for two more weeks, though the new order does allow an affiliated company to resume operations.

World Class Network, which sold training kits to would-be travel agents, was the first to be closed after the FTC won a temporary order Feb. 28. The agency alleges that the company deceived customers by selling travel kits for up to $495 each with false promises of discounts, travel upgrades and six-figure incomes they could earn.

The World Class case put 180 employees out of work last week.

Times staff writer Marla Dickerson contributed to this report.

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