O’Riordan confirmed that the collapse, in which the firm went into abrupt liquidation earlier this month, was the first case of an ATAS-accredited agency going bust since ATAS succeeded the TCF over 11 months ago. A number of sudden closures of travel companies have occurred during that time, but they were not ATAS accredited.
“This is the first and only collapse we’ve had in almost 12 months of operation, as opposed to the old TCF regime where you used to have anything between 15 or 20 collapses a year,” O’Riordan said.
CTS Travel Services has been placed in the hands of Queensland liquidator, Robson Cotter Insolvency Group. A meeting of creditors was held on Friday at 101 Collins Street, Melbourne. Reg Eustace was elected chairman and it was resolved that the meeting be adjourned for 14 days (to Friday 5 June 2015) and switched to a venue more convenient for most creditors, in the City of Hobsons Bay.
O’Riordan said there appeared to be circumstances behind the collapse that would have made it very hard to stop. AFTA is already on record as saying the closure appeared to “relate to matters that require police investigation”.
O’Riordan told Global Travel Media the background to the collapse had nothing to do with the fact CTS Travel Services was ATAS accredited. Neither did it bring into question the ability of ATAS to vet businesses.
“The finances provided to us [by CTS] were fine to pass the assessment when they applied back in October or whenever they became accredited last year,” he said.
O’Riordan continued: “It is our firm view that ATAS has elevated standards across the industry – because there are more checks now. We have over 3000 agents who are accredited, with another 400 in the pipeline and of those, we are able to assess that they meet the criteria.”
Previously, many agents didn’t hold certain insurances and didn’t have complaint handling procedures in place, he said.
“All these things are minimum requirements under ATAS. So in our view, across the board, for all those who have chosen to go down the path of accreditation, we have certainly seen an increase in compliance.”
O’Riordan said ATAS ran four “solvency test ratios” across businesses that applied to become members. The assessors had accounting qualifications and experience in compliance and assessment of businesses.
“Our compliance manager is eminently qualified, with over 15 years experience in this field.”
Consumers are understandably concerned that whereas the TCF covered them in the event of agent defaults, the current regime does not. But O’Riordan said there were provisos in the previous system.
“If you paid by credit card the TCF wouldn’t give you your money back; the first thing they would do is to ask you to see your card issuer and try to get a chargeback.”
Written by Peter Needham