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Adelaide travel collapse shortfall blows out to $500,000

September 11, 2015 Business News, Headline News 2 Comments Email Email

egtmedia59Travellers left out of pocket by the collapse of an Adelaide travel agency in early August have almost no chance of ever seeing their money again.

Once all creditors’ claims have been processed, the debts of Zym Import/Export Pty Ltd, also known as Zym Travel, are expected to top AUD 500,000. The realisable assets of the business are said to be worth less than AUD 17,000.

Zym Travel owner Zeljka Loncar has been charged with dishonestly dealing with documents, a crime for which the maximum penalty is 10 years imprisonment. The matter came up in the Port Adelaide Magistrates Court yesterday. It was called early, no plea was taken and proceedings were adjourned until 15 October 2015. Several creditors who at the court left disappointed.

Creditors of Zym already know they have little chance of getting their money back. Creditors met in late August to learn that collectively they are owed more than AUD 410,000, with more claims coming in. That’s already over 24 times the value of the realisable assets of the business. The administration of Zym is being carried out by BCR Advisory.

Creditors include banks, companies that provided unsecured business loans, a travel intermediary, and “several dozen” people who paid money for air tickets they never received, the Daily Telegraph reported.

The paper named the largest single personal creditor of Zym Travel as Mohamed Farrage, originally from Eritrea on the Horn of Africa, who is owed more than AUD 22,000 for air tickets ordered, paid for, and never received.

Zym creditors might well yearn for the days of the Travel Compensation Fund (TCF). It was precisely because of situations such as now being experienced by Zym Travel’s customers that the TCF was created by Australia’s state governments in 1986. The TCF, a statutory, industry-funded scheme, provided compensation to travel agent customers who suffered losses from travel agent collapses for payments made up to 30 June 2014, when the TCF was disbanded by state governments and replaced by a voluntary AFTA-administered accreditation program (ATAS).

The TCF had two functions: to impose mandatory minimum standards on travel agents and to provide a fund to compensate consumers in the event an agent failed to provide services customers had paid for.

ATAS addresses the first of the TCF’s functions (minus the robust financial standards demanded by the TCF) but ATAS is not mandatory. The second of the two TCF functions has been dismantled.

Meanwhile, like a rave from the grave, the Zym Travel website continues to tell the world: “Zym’s mission is to become the foremost provider of travel to the people.”

“Zym’s owner and employees are outdoor travel enthusiasts as well as seasoned travel industry professionals,” the website proclaims. “Zym seeks to asses individual’s and business people’s needs to help them make the best possible travel arrangements on their budget, and skill level.”

Written by Peter Needham




Currently there are "2 comments" on this Article:

  1. AgentGerko says:

    The point is not that ATAS is not mandatory, the point is that ATAS doesn’t make a jot of difference to whether an agency will fail or not. ATAS is a toothless tiger. Only the TCF provided a reasonable level of security for customers.

  2. andris says:

    What does it take for the decision makers who in there wisdom decided that the Travel Compensation Fund was over regulation and a superfluous consumer protection mechanism to re visit the issue and re instate the TCF and back date the reinstatement to 1/7/14

    The money is there $25 million surplus consumer funds in the kitty left over from the TCF currently earmarked to be divided up by the states and territory governments and booked as revenue

    A slight of hand theft by government of consumer funds . Not the first time this has occurred .

    South australias share of the $25 would be more than enough to compensate, ‘ the largest single personal creditor of Zym Travel as Mohamed Farrage, originally from Eritrea on the Horn of Africa, who is owed more than AUD 22,000 for air tickets ordered, paid for, and never received ‘,should be and would have been compensated by the TCF

    All the relevant governments are responsible for Mr Mohamed Farrage, loss and Mr Farrage, should contact the SA premier and ask him intervene personally and use the windfall revenue that SA is gaining to pay out consumers like himself in SA .

    There is no reason why SA cannot on a state basis re instate a TCF equivalent . In fact there is no reason why all the states and territories cannot payout all the consumer claims that were payable if the TCF had not been abolished and re instate a national TCF as existed before at no cost to state revenue

    It is time the states and territories do so .Alternatively the Premiers could write to victims like Mr Mohamed Farrage, rejecting there request for compensation with a gloating final paragraph advising then of the full amount of benefit , state revenue has gained from the TCF abolition

    The Premiers should ask themselves the question why not tell the community the truth , Consumer money transferred to state revenue is a better public policy outcome than a effective consumer protection policy .Should win votes for any one except the current governments

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