Registered Traveler Meltdown: Fraud Action Against Clear? Investigate the TSA?

Last month, the Clear "registered traveler" program that operated with the blessing of the US government abruptly closed. About 200,000 people discovered passes they'd purchased were now worthless. No refunds would be given. A class action lawsuit has been filed. But forget the money. Will anyone consider a fraud action against the company's executives and perhaps against competing "registered traveler" company Flo? And should someone hold the Transportation Security Agency accountable for the mess?

Registered Traveler was a program operated through the TSA that was originally intended to allow people to skip past airport security. By giving up your fingerprints, retina IDs and being subjected to a TSA background check -- plus paying some cash -- your registered status would mean bypassing the usual airport screening.

TSA created the rules for Registered Traveler and then left it to private companies to operate within its guidelines. However, the rules never allowed for actually getting past security, in the end. Instead, Registered Traveler turned into a glorified "cut in front of the line" system. It was a way for frequent travelers to jump ahead of everyone else in line, but it still subjected them to the same screening.

Clear was the biggest company operating under the Registered Traveler program, allowing people to jump ahead in security lines at about 20 airports. When the company went under last month, there were plenty of people shedding no tears for those who'd lost money on the cards they purchased. After all, if those "smug" folks cutting in line were "dumb" enough to enroll in a private program like Clear, they deserved to lose their money -- or so some of the commentary has gone.

Well, airports benefited from the program. Orlando earned nearly $1 million this year alone, according to USA Today. In turn, that should have helped all travelers. But let's set aside the potential sniping between the "haves" and "have-nots" in the airport security line and focus on the bigger issue. With an administration that's trying to crack down on corporate abuses, such as misleading credit terms -- shouldn't someone consider punishing those at Clear for pushing a consumer product that seemed to have TSA backing when it had to be known the company was about to collapse?

When exactly did Clear realize it was in serious danger of closing? At that time, did it have any obligation to cease operations earlier, in order to issue refunds to those who'd purchased cards? Was the company acting prudently in continuing to sell passes with lengths of up to 10 years? Should it have still been selling cards on the day it closed?

Meanwhile, another Registered Traveler company -- Flo -- continued to sell its own passes, still making it seem on its site at the time I write this that its card are accepted at more than 20 airports nationwide. In reality, there are only three "Registered Traveler" locations left. Two are operated by Preferred Traveler, and one of the Preferred Traveler lanes may have just closed today at Jacksonville, following the Jacksonville Aviation Authority asking the Florida attorney general to investigate customer complaints.

Where's the TSA in all this? Acting like it has nothing to do with the mess. At first, the TSA said nothing to the public. After a week, it finally got public statement out on its site and blog, mainly to act like it wasn't connected with the meltdown.

All that biometric data that Clear was collecting? The TSA says it didn't receive any of it after the "pilot" program ended in July 2008. And yet, you get the impression that companies operating under the Registered Traveler mandate were still required to collect it. Sure, the TSA announced last July it would no longer charge its own $28 fee to do screening. But  in the same release, it said that those within the Registered Traveler system would still need to verify member identities and that there was "promise" in a "biometrically enhanced" Registered Traveler system.

If the change last year simply transformed Registered Traveler into a skip-to-the-front service, why were all the biometrics necessary? Why not just have a picture ID check as currently happens? And why didn't the TSA say all the biometrics weren't needed?

And the status of the Registered Traveler program? Hit the TSA's FAQ, and you're told:

Q. What is the status of the RT program now?

A. The program is a market-driven venture offered by the private sector in partnership with airports and airlines.

Don't consumers deserve better than this? Shouldn't they at least be told that the Registered Traveler program has lanes in only three remaining locations?

Or on the TSA blog:

Will Clear members be able to transfer memberships to other service providers?

That decision is between CLEAR, the other service provider, and the card holder.

That sidesteps the issue that the TSA has required that each provider honor each other's cards for a set period. So yes, Clear members should find the other two Registered Traveler providers have to honor their cards -- at least if they also don't go out of business.

Some lawmakers are seeking answers over the privacy of data that the TSA collected via Clear, in the wake of its closure. I'm hoping they go beyond this and seek answers into how the entire meltdown was allowed to happen.

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Comments

[cmaxmost]

Not exactly true. RT was one of the post 9/11 brainchilds of the Bush Administration. .. along with TWIC ( Transportatin Worker ID cards), REAL-ID, etc. These programs were developed within a broader context of being able to imporve security and prevent 9/11 type plots without negatively impacting the flow of travel, traffic, commerce, etc. RT - like these other initiatives - were significantly watered down over the years as the cost, complexities, and limitations of the current state of the technologies required forced a realtiy check. RT was suppose to be a government program that never materialized beuase of these and other issues and it was only after commercial organizations became invovled that RT became a "cut to the front of the line" program . TSA would not allow anyone to skip security even though as many have reported, current TSA procedures do little to secure air travel. The bototm line is that there were many commericial entities with vested interests in making big money off of RT . So, even though the business model was never sound ( simple math indicated a $100M investment by Clear could never be returned), big names jumped on the RT/Clear bandwagon. The failure of Clear had nothing to do with biometrics, the TSA (though they do have responsibiity for delaing with data privacy), or the airports. Just a money making scheme that never had legs gone bad.

[RegTraveler]

This BLOG is full of errors and misconceptions. RT was never intended to be a security product. It has always been a customer service and convenience product. I have no problem paying $200 a year if I can show up at an RT airport 30 minutes prior to my flight and ALWAYS make my flight. That's what the program is today and always has been. As a matter of fact I would pay $500 per year. Also, FLO does not operate Jacksonville. We should be looking at how CLEAR mismanaged their business, not at the RT program which is the best new product in aviation is more than a decade.

[dannysullivan]

@RegTraveler RT was indeed meant to be a security product. That's why background checks and fingerprints and retinal IDs were required. When you go through security today, the TSA itself doesn't aske for all that. RT providers were asking for it because the intent was to bypass security.

It devolved into a "front of the line" service last year, when the TSA stopped doing background checks (not that getting past security barriers ever started). Still, that was fine for many people. I'm with you. I'd have continued paying for just that service. But that type of service didn't require expensive biometrics machines that companies iike Clear had invested in. Yet it's not clear that the RT companies would have been allowed to get rid of those machines by the TSA.

Flo did have a lane in Jacksonville. I've confirmed this several times in previous coverage of this issue, and in the article above, I linked to another article about it. In addition, the Flo site itself listed this as one of its airports. Today -- surprise -- that airports page has now changed to say:

"This page has been disabled pending clarification of the Registered Traveler's Program status moving forward. FLO is working to restore RT lane operations as soon as possible. We will update this website and contact all customers as soon as more information becomes available.­"

[dannysullivan]

RegTraveler, I stand corrected -- the Jacksonville lane was operated by Preferred Traveler, and I've updated the story to reflect this. Flo was still making it seem as if it had service at about 20 airports, however.

[rgersmrk]

The problem with all of this to begin with is the way the TSA treats consumers in the airport to begin with. No one should be subjected to being made to feel like a common criminal, like the TSA makes many people feel in airport "security" lines, when they spend hard earned money to travel somewhere.

I personally avoid air travel whenever possible now (and I love flying) because of what our government has done to ruin air travel more so than the airline companies.