On Monday, I brought to light the issue of tour package scams by errant travel operators, both licensed and unlicensed, who abscond after collecting deposits or full payments from customers.
Loopholes in existing regulations
In particular, I highlighted the case of a Penang couple that fell victim to a travel operator called Lohas Premium, and how the company is seemingly able to circumvent existing regulations by using three different company names.
According to a company search that I conducted, it would appear that there are three companies that share the same two directors, namely Chay Jia Er and Chan Hiang Yang. The three companies in question are, Lohas Premium Travel and Lifestyle Sdn Bhd, Lohas Premium Holidays Sdn Bhd and Lohas Premium Vacation Sdn Bhd.
A cross-reference with the Ministry of Tourism and Culture (Motour) reveals that out of the three, only one company (Lohas Premium Vacation) is officially licensed and registered by the ministry. This means that the other two, Lohas Premium Travel and Lifestyle as well as Lohas Premium Holidays, are unlicensed and therefore cannot be used to sell outbound tour packages.
Despite the fact that they are not allowed to, the travel agency actually uses the two unlicensed companies in marketing and advertising their products. For example, their official website (www.lohas-premium.com) where they sell tour packages uses the name Lohas Premium Travel and Lifestyle, whereas they are listed on their Groupon advertisements as Lohas Premium Holidays.
And now, faced with allegations of fraud after failing to fulfil tour packages bought by various customers, it is reported that the company is under investigation by MATTA and Motour.
However, because complaints are lodged against Lohas Premium Travel and Lifestyle or Lohas Premium Holidays, it would appear that their officially licensed company, Lohas Premium Vacation, has escaped scrutiny.
This brings into question whether it is an intended strategy. According to existing regulations under the Tourism Industry Act 1992, the ministry has the power to fine or revoke the license of an offending travel agent, provided it is licensed. Meanwhile, cases involving unlicensed companies will be referred to the police and charged under the penal code.
In this context, how would Lohas Premium and other companies that use a similar strategy be dealt with? Unless victims are sharp enough to catch the nuances, they would most likely lodge a complaint against the company that sold them the package, which has been the case with Lohas Premium. And since neither Lohas Premium Travel and Lifestyle nor Lohas Premium Holidays are officially licensed, Motour is unable to take action on them. Meanwhile, Lohas Premium Vacation will continue to enjoy a valid license.
Even if criminal charges are eventually brought upon the two unlicensed companies, again the question is whether it will affect the license registered under the third company.
This brings to light another corresponding loophole in the system. It appears that whenever Motour revokes a company’s license, it is only the company itself that is blacklisted, and not the directors. This essentially allows the same directors to circumvent the system and continue operating through different company names.
Parliamentary reply reveals curious information
On 16 June 2014, I received a Parliamentary reply from the Minister of Tourism and Culture, Dato’ Seri Mohamed Nazri Aziz, stating that since 2009, 14 companies have had their licenses revoked while one unlicensed company is currently facing criminal charges.
Curiously, there is a blacklisted company called Lohas Leisure Holiday, which had its license revoked in 2009. However, the ministry has since been unable to confirm whether this company is related to Lohas Premium or its directors. A company search has also failed to turn up any information on Lohas Leisure Holiday.
This further emphasises the need to hold directors personally accountable, rather than simply punishing the vehicle used to scam unsuspecting customers. I therefore call upon Motour to take immediate measures to address these loopholes that allow crafty conmen to cheat the public.