Travel Agents

Former Flight Centre agent pleads guilty to fraud

Hannah Edensor

A former Flight Centre travel agent has pleaded guilty to defrauding a pensioner travel scheme through the Northern Territory government, resulting in over $110,000 of illegal revenue.

Appearing in the Supreme Court, 45-year-old Vanessa Barrett admitted to the fraud, which she carried out during her time working at Flight Centre’s Palmerston branch between 2011 and 2013, according to the ABC.

Barrett admitted to submitting and securing reimbursement from the NT Health Department for 169 false invoices at higher flight costs, when in actual fact, the flights she purchased for pensioners were much cheaper.

However, rather than pocketing the extra cash, which was the case for previously convicted Darwin travel agent Xana Kamitsis, who was jailed in 2015 for defrauding the same pensioner travel scheme, Barrett funneled almost all of the extra money back into Flight Centre.

Per the ABC, Barrett then received a $4000 annual bonus as a result of her impressive sales results.

Her lawyer, Peter Maley, claims she was “absolutely devastated and destroyed” by what she did, and asked for the court to consider a home detention punishment, given she didn’t actually keep all the money for herself, and the “lion’s share” went to the Flight Centre agency.

But, in a shocking twist, Maley claimed this kind of practice is “widespread” in travel agencies across the Northern Territory, with ABC reporting he even said the practice was discussed at Flight Centre staff meetings.

“It was a universal and common practice,” Maley said, per ABC.

Travel Weekly contacted Flight Centre but they were unable to comment on an open and ongoing court case.

The prosecutors of Barrett said regardless of the claims this was common practice, it still didn’t excuse her actions.

“Everyone was doing it, but that doesn’t make this individual less culpable,” Prosecutor David Morters said.

“Her fraud was part of the reason she was able to shine in this organisation.”

“People have to do a risk evaluation if they are contemplating engaging in this activity,” he added, explaining that Barrett undermined the NT Government’s pensioner scheme, and her sentencing should set an example for others considering doing the same.

According to the ABC, Flight Centre has repaid $1.8 million to the NT Government in settlement of a different civil dispute over the practice of submitting false – and inflated – invoices.

Barrett’s case is, per ABC, one of several that have been launched in an ongoing fraud investigation by NT Police into travel agents rorting this particular pensioner travel concession scheme.

In May, another NT travel agent, Tennille Kim Foley, was sentenced to three months’ home detention for committing fraud and stealing $40,000 from the Government illegally.

The prosecutors in Barrett’s case told the court that a sentence of at least three years would be deemed suitable, per the ABC, with her case adjourned until July 24.

Barrett and her lawyer hope she will be considered a suitable candidate for home detention, with the maximum penalty for this particular crime 14 years, per ABC.

SEE WHAT PEOPLE ARE SAYING

  • Maxwell Smart

    so what exactly did she do wrong ? We do this everyday. We buy tickets & sell them for more than we paid. So what ?

  • Bruce

    I wish there was a media article that clarified exactly what they did wrong. The way its written (several media articles) whenever i read it they simply charged more than the RRP for the flights(?) and that’s (in regular circumstances) perfectly normal business. A travel agent can add a service margin or charge whatever they want for tickets etc and make a profit as can any business. But obviously they have broken some laws here but its not clear exactly what they did wrong.

  • Hannah Edensor

    Could it have something to do with the deception of the act? If you charge a service margin, we’d imagine it would be disclosed or made transparent on the invoice, however this agent appears to have ‘hidden’ the extra fees she was charging in the inflated price of the airfare then taking the excess, without claiming it as a service fee or any other kind of fee.

    Given ‘defraud’ is literally defined as “illegally obtain money from (someone) by deception”, this could well be the answer. We’ll keep looking around for more answers though, Bruce and Maxwell!

    Thanks for the comments.

  • Anne

    For those asking “what’s the issue?” Here’s an example. Say a customer is sold a fare that Flight Centre has charged as $1000 but is in reality a regular published fare (not a consolidator fare) that actually cost $600. If the customer needs to make a change to the ticket, rather than having $1000 ticket value towards the exchange, as far as the airline is concerned the customer only has $600 towards a new ticket. The customer is on the hook for an extra $400 that wasn’t expected. ($400 that FC has claimed as additional profit.) If these are business or government employees, think of the obscene amount of overspend. Millions or tens of millions. And, yes, customers should shop around to get the best fares, but often corporate and government employees don’t have the time or bother to shop around. Same thing happens with hotels, car rentals and other things, too. $400 is a large example. If this is happening $100 or $200 per ticket it might not be as noticeable, but it adds up when considering the volume FC does–and the customer is still shorted on perceived value of the item that they have purchased.

    This isn’t the same as a retail store simply making a profit on an item. If I buy an item at a retail store and need to return it, the store honors the same price paid on the receipt for the credit or refund (save for certain exclusions). That’s not the case here. Customers walking away with lower ticket values than they had thought. You thought you bought a brand new iPhone but you’re instead walking away with an early 2000s flip phone in value.

    Yes, the agents are at fault for participating in this, but I can say that this is encouraged company practice not just in Oz, but wherever FC has offices: UK, Canada, U.S.A., etc. They have been the subject of investigations and lawsuits in multiple countries. That would not be the case if this was just agent discretion and not company-wide practice. Otherwise, there is no way agents can live off one of the lowest base salaries in the industry where true “commission” is practically non-existent. It is FC who really profits as the agents only see a fraction of the actual transactions hit their paychecks. It is also not a way to keep customers as it destroys trust once customers discover that they have been cheated.

  • Ian Anderson

    Excellent post Anne. I just can’t believe that Flight Centre continue to get away with this company wide rip-off culture. I can only assume Maxwell works for Flight Centre, not being able to see what is wrong / immoral / illegal with this. If you want to charge more than RRP, be honest and put it as a service charge on top of the pub fare as other travel agencies do ( i can tell of you of some where it is impossible for an agent to charge more than RRP – they don’t feel the need for a price promise!). Selling an o fare level ticket for a y fare level price is wrong (an extreme example), plain and simple. The sooner all airlines publish price paid / fare level on tickets the better. That is the only way to end this practice, and then the flight centre profits will plummet! Anne is correct, there is no / minimal honest commission in selling flight tickets now ( not like 10+ years ago). All of the honest money is in selling hotels, car hire and tours. A flight centre consultant may then sell you an honestly priced ticket as part of a package, you could indeed save money compared to purchasing separately. My advice if you only want A to B flight only, go on the airlines website / app which have improved massively in recent years. You can see all of the true prices and ticket conditions and choose exactly what you want. I purchased my last flight ticket on an app for the first time, and had to date change whilst I was away. I did this for very little cost and stress, all done within 2 minutes I would say. Admittedly it’s alot harder to do complex itineraries online, where the assistance of a honest travel professional is still invaluable. I’ve worked in the industry for 14 years now, working for Flight Centre was a very depressing experience and almost led me to quit the industry – thinking that might be the only way to behave to survive in the internet age. But there are still honest travel companies and outstanding consultants out there, definitely buyer beware with flight centre.

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