PATA Fraud? Are they just a ruse and in serious trouble?

PATA Fraud? Are they just a ruse and in serious trouble?
By Bali BS News
Dec 22, 2005, 08:50

There is clear evidence the Pacific Asia Travel Association (“PATA”) is at best deceiving people, at worst committing fraud. Not only this but that PATA is far from the professional organization it eludes to be and appears not as financially sound as many would believe or rather, have you believe. We believe PATA is likely a selfish, outdated 80’s style American marketing company who got involved in SE Asia as a third thought and actually are bad for the regional tourism market they claim to serve. But whatever we or indeed others believe, our report below probably holds some startling revelations for both tourists to and the tourism industry of SE Asia, whatever they think of PATA.

Why could PATA be accused of deceiving people or even of committing fraud? We believe PATA deliberately superficially masquerades as a true non-profit travel association, while it is actually a with profits selfish even callous trade only marketing subscription company. There is informed speculation even evidence to show they and their members abuse the name “Pacific Asia Travel Association” to imply they are something greater; a wider interest, higher level travel association for everyone, tourists included, when they are most definitely not and that they do this for unfair, perhaps unlawful (fraudulent) commercial gain.

First though, it seems highly appropriate to point out what we believe clearly indicates PATA’s mindset. Recently when a travel industry specialist put questions and even challenges to PATA about their operation in relation to the above, they did not reply directly with specific details that vindicate themselves or provide substantive rebuttals, they simply had their San Francisco lawyer generically deny everything and threaten legal action if the subject ever got published! We think most people will agree that most if not all honest, decent organizations who receive specific questions relating to their trading methods normally first and openly respond themselves and with sincere assurances as to why anything they disagree with is wrong. We say the fact PATA went straight to lawyer’s correspondence stating “We will sue” shows them to be exactly what we thought them to be, an aggressive even nasty, American sales company. Anyway, we are publishing the information we have been sent, so let PATA sue us and reap the “benefits” of the publicity and likely self-defeating failure they will cause if that is what they want to do.

So what exactly was put to PATA that invoked such a response? Simply that they are a subscription based travel industry marketing and intelligence company which makes a profit and benefits commercially and / or otherwise selfishly from either making or allowing the general public to believe them to be a true travel association, by token of their name, while actually providing no significant or even no benefit at all to tourists themselves. In fact one could argue PATA and their members work against the traveling public’s best interests due to the ensuing bad industry mindset from such a deception and the fact travel companies are paying for potentially bad marketing (sales) information / advice they undoubtedly follow and need to recoup the cost of. The problem as we see it comes chiefly from the basis the traveling public; a) Believe travel industry associations to provide at least some form of membership quality control and even customer protection, and b) Believe the name of the organization accurately and fully describes what it is. For example ABTA, the Association of British Travel Agents is precisely and accurately named and has very stringent membership entry conditions, including member investment levels. This is equally true with a number of similar travel industry associations around the world. The problem regarding PATA is whether they and their members gain or even make unfair benefit from a name that does not accurately and fully describe their organization, where membership / subscription to PATA can be apparently bought by any travel related organization good or bad, and therefore the possibility even probability PATA and their members are knowingly leeching the good will of other true specifically named travel associations and hoodwinking the traveling public into trusting travel organizations bearing the PATA membership logo unfoundedly, while offering no quality control over membership whatsoever.

We believe when the traveling public sees the name “Pacific Asia Travel Association” which does not mention “industry” or “agent”, they believe, based on other travel associations known to them, PATA must be some very high level, possibly government or regional initiated organization that covers all aspects of and therefore all interests therein covered by the term “Pacific Asia travel”. Therefore we believe when regular tourists see a travel agent with the PATA membership logo they have a subconscious view that PATA somehow is significantly there for them and that the agent is somehow specifically and substantially better for them than agents without the membership logo. We believe it is probable PATA and their members realize it and the resulting unfounded and unfair knee-jerk tourist reaction is part of, if not the main justification travel firms have for subscribing to what is extensively just a marketing corporation. If we are right, that seems to go beyond being a deceptive perk, we believe it is fraud.

At last, at least, after PATA’s lawyer, Walter Hansell of Cooper, White & Cooper LLP in San Francisco, who first generically denied the content of a letter to PATA which included the “charge” they were not a true travel association as their name would literally indicate, but was then presented with clear facts such as PATA’s incorporation statement and Trademark business description, which he should have known about already as he filed the Trademark for them! At least Mr. Hansell has finally admitted PATA “is a travel and tourism industry development and trade association”, but does not specifically answer the allegation PATA are therefore masquerading behind a misleading company name and should rename themselves as something like the “Pacific Asia Travel Industry Marketing Association”. Clearly PATA do not want this, but why? Surely specifically naming themselves to what they really are as others do will enable prospective customers or members more easily identify them as a potential supplier. Surely the only reason for wanting to call themselves a travel association and to threaten legal action against anyone who dares even raise the prospect publicly that they are not is due to nasty shame in the face the truth, salesmen’s determination to go on misleading people in spite of the facts, or both. Perhaps the directors of PATA are simply travel marketing executives or even hacks who enjoy the illusion they are somebody of something more, while their American CEO is making a very comfortable living in the process? We understand the later is to be privately investigated; we can't wait to see the results!

A bit of history now which explains why their lawyer is based in San Francisco and why membership payments are or at least were sent to a Hawaiian bank account is that PATA (originally Pacific Area Travel Association) were incorporated as a non-profit association on the 14th March 1983 in Hawaii; they are a Hawaiian Corporation. Shortly after they relocated to Oakland California (near San Francisco) and on the 16th July 1986 renamed themselves the “Pacific Asia Travel Association” we believe to reflect that they were doing better in Asia than they were in the USA. Evidence of this comes to light when you use D&B's corporation name search facility and then cross reference the results for "Asia Pacific Travel Association" with individual US states corporation search facilities to see if these entities still exist or not. D&B shows 6 other Asia Pacific Travel Associations in the USA, presumably these are all or rather were connected with PATA Oakland; for example the listing for Santa Monica clearly was (PACIFIC ASIA TRAVEL ASSOCIATION INC, Southern California Chapter, 1434 6th St Ste 6). Data shows only the main office of PATA has survived what appears to be catastrophic failure in the USA. When we searched the official state corporation records for the other 6 Pacific Asia Travel Association entities listed on D&B, 4 are not / no longer listed (Phoenix Arizona, San Diego California, Manchester Connecticut and Philadelphia Pennsylvania) and 2 show they have been dissolved / suspended (Atlanta Georgia and Santa Monica California).

Although PATA is a Hawaiian Corporation with its registered office in Oakland, California, they have given substance to our belief their main sales revenues come from and their membership base is primarily in SE Asia by the fact they based their operational office (HQ) in Bangkok, Thailand. This is actually quite an irony and perhaps even a worry for their travel industry members in SE Asia because their original incorporation trading statement, which we believe has not been revised, updated or otherwise amended states PATA is a “Travel industry trade association promoting travel & tourism throughout the Pacific Basin”. Well, we hate to be the bearer of bad geographical news to PATA and their membership, but their HQ and believed main membership base are not within the Pacific Basin! It seems that PATA started out as one thing, found success in a different area, migrated its trading accordingly but forgot to reflect this in their articles of association and incorporation! We are not experts in US law but wonder if PATA, if we are right, by token of their locating their main operations office in Bangkok are trading lawfully or not as some countries restrict you to doing what your articles say you do! Unlawful or not, we think PATA’s set up is somewhat ludicrous and possibly exists as it does solely for the benefit of their CEO, Peter de Jong. While the whole process somewhat makes SE Asia look nothing more than a third thought money making process come necessity for the American corporation PATA.

On the subject of money, PATA are legally registered as a non-profit corporation but are they? A leading financial reporting and analysis company showed PATA had sales of over $3.2 million in 1995 which resulted in a hefty profit of nearly $1.3 million. Perhaps this is why PATA stated on their web site that they are a “not for profit” organization, a subsequent attempt to somehow cover the realities. Their lawyer Walter Hansell claims “not for profit” and “non-profit” mean the same thing, but they do not literally and if PATA claim they are non-profit, why not say so? Mr. Hansell also repudiated the statement put to him that PATA made just under $1.3 million profit in 1995, but then changed his story to not being able to “check your sources for you” when the financial report from a leading institution was sent to him! What! PATA’s own lawyer does not know whether they made such a profit or not as a matter of previous knowledge and can not easily ascertain this with his own client, yet puts his professional reputation and perhaps even license on the line by asserting PATA are non-profit when he does not know this for a fact?! You can imagine how the question “Where did all that money go?” went down with Walter! Well the information comes from a highly reputable US institution, so we believe it is 100% factual and have to ask does that also mean PATA have been trading unlawfully, making profits when they are not meant to?

Then the subject of PATA’s sales revenues and profits opened up a whole new can of worms! The financial report we saw from that same financial institution showed the last fiscal company accounts filing by PATA as 2001. When PATA’s accountants and lawyer were asked about why this was and what was PATA’s current status the only response that came from their lawyer Walter Hansell was PATA “is a nonprofit corporation in active good status under its corporate charter”. It was made clear why the question was being asked; because a) the report showed PATA’s sales revenues had nearly halved in 2001 from what they made in 1995, we believe because PATA extensively now derives its revenues from SE Asia and because the region had an economic crash in the late 90’s which no doubt would account for such a dramatic change in PATA’s fortunes, and b) since the last financials we know exist for PATA there has been 9/11's effects on global tourism, plus the Bali 2002 bombings, SARS, tsunami, etc. negative effects on tourism specifically in SE Asia. So the logical conclusion is that PATA would have suffered even greater sales revenue and profit losses as a result, as its membership presumably increasingly became less able to justify PATA's membership fees. The whole question of PATA’s financial security therefore comes to mind.

We believe that PATA may also be losing business on the basis it is offering its members something they do not need at the price it is sold; perhaps an out of date and blinkered even sometimes callous vision resulting therefore in inconsequential or dated market intelligence. We raise this specter because of their apparent failure in their home country, the USA. We believe it is possible their success in SE Asia is or perhaps was due to a regional perception that travel companies needed somehow to be members of a travel association for credibility purposes, and the possibility business people in the region were not as savy as American travel professionals but are now catching up. We believe what PATA superficially says or does neither ingratiates them nor helps the region’s travel market, that is a) How PATA reacted to the October 2005 Bali bombings (see previous report: PATA Bali), and b) the apparent 1980’s style (American sell, sell, sell) of PATA as depicted on their own “Join now – PATA benefits page".

We believe all of this currently works against rather than for the SE Asian travel industry in that it equates to illusion and negativity over positive direction. The traveling public is becoming increasingly educated and demanding, including a need for information over marketing hype, customer security and focus over customer sales opportunities, and ethics and action over words. Although PATA may be useful in bringing travel related business together for mutual commercial benefit, and may not necessarily provide anything false marketing intelligence wise per say, we believe they are out of date, enjoying unfair advantage while failing even substantially to fill the "shoes" they are "wearing" solely because of their less than descriptive / accurate company name and even web site detail; the later we feel does nothing up front to dispel the false notion PATA are something more than they really are.

Bali BS also believe PATA’s overall professionalism and commitment comes into serious doubt and which also has an effect on their suspected demise because of such things as registration falsehoods over their domain name pata.org with the Internet Corporation for Assigned Names and Numbers (ICANN), in that PATA failed to show they are a corporation and actually list their registered telephone number as +1.9999999999; hmmmmm, perhaps they don’t want to take phone calls! This may actually be grounds for having their domain revoked! We understand a formal complaint with “InterNic” and “ICANN” has now been filed against PATA after they were advised of the fact yet failed to correct the false data, so maybe someone else will be able to claim pata.org soon! We also understand a complaint has been made against PATA with the US Federal Trade Commission (alleging they falsely claim to be a non-profit travel association because of the above data) and the Office of the Attorney General for the State of California (for not registering under the Californian Seller of Travel Program, as PATA show special offers on their web page which may well make them legally obliged to so register under Californian law). Finally, one prominent leading tourism figure says he intends to sue PATA for damages and compensation if they do not change their name to something more accurate and make their true operation much clearer on their web site as it is allegedly giving his competition and even business advisories an unfair and unwarranted advantage. It seems like their lawyer Walter Hansell may be very busy soon!

PATA clearly do not want to widen their field of interest or modus operandi to better even fully fit their name, so why don’t they change it to something infinitely more descriptive even honest? How about it PATA, how about changing your name to the Pacific Asia Travel Industry Marketing Association and clear the way for a true, higher lever, wider interest travel association, or for a range of specific specialist travel associations to come about and serve SE Asia as it should be? SE Asian travel companies have an appalling reputation with such things as credit card fraud and worse. Don’t the directors of PATA agree that successful tourism comes from honesty, transparency, ethics and being able to determine which companies invest in the future? If so, can’t PATA see they are at best likely stifling development in the region, at worst inflicting it for selfish gain? Come on PATA, change your name and make way for a true travel association for everyone!