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Consumer Claims Demonstrate Major ATAS Flaw

April 1, 2014 Mobile travel consulting No Comments Email Email

TravelManagers concerns continue regarding the Australian Federation of Travel Agents’ (AFTA) Australian Travel Accreditation Scheme (ATAS).

The chilling reality of the schemes’ shortcomings have been highlighted with customers of six travel agent outlets submitting claims to the Travel Compensation Fund (TCF) which they will not be able to do under ATAS, as it is currently proposed.

 TravelManagers has been extremely vocal around the inadequacies of ATAS, in particular around consumer protection being voluntary as highlighted directly in meetings with AFTA and publically through trade publications. TravelManagers, while having reservations about ATAS holds strong views that all future ATAS members should be required to have Travel Intermediary Insolvency Insurance to offer consumer protection similar to that currently provided by the TCF through its financial oversight of

Barry HOT

Barry HOT

travel agents.

“TravelManagers view this as the most important issue facing the travel agency community and its supplier partners in 2014. The recent publication as part of a list of terminated agents on the TCF website of travel agents, identifying Travelwiz in Sydney and Tribal Travel with five outlets in four States, as having their TCF membership revoked due to receipt of consumer claims as recently as February, highlights the real concerns for customer protection. As from 01 July without mandatory Travel Intermediary Insolvency Insurance, the potential for a significant number of clients to be adversely affected increases dramatically. What would be the end result? A number of clients being severely out of pocket with the likelihood they would be unable to commence their travel,” says TravelManagers’ Chairman, Barry Mayo.

Mayo does not want to see a weakening in consumer protection resulting in negative consumer media exposure of the travel agency industry with clients potentially seeking recourse via the media as a result of a travel agency collapse when a client’s funds are not covered by Travel Intermediary Insolvency Insurance.

“Should ATAS adopt mandatory Travel Intermediary Insolvency Insurance this has the benefit of giving consumers surety and clarity that their funds are protected if using an ATAS accredited travel agent, whilst in the hands of that agent. More importantly it will ensure the consumer maintains a similar level of financial protection and is not disadvantaged by the transition from licensing and TCF to ATAS and therefore not materially worse off than they are currently. It’s TravelManagers’ view that the consumer should not be adversely impacted by the governments’ endorsement of ATAS which will not be the case if AFTA proceeds with ATAS as currently proposed,” says Mayo.

Mayo is of the opinion that State and Territory Ministers responsible for consumer affairs do not recognize the potential size of this issue in terms of consumer dollars or disrupted travel. “According to the TCF’s most recently published annual report there were in 2012; 15 travel agent collapses, 1,299 claims paid out totaling $4,185,035 and not one of claimants had need to resort to the media to have their claim settled,” says Mayo

State and territory licensing of travel agents will cease to exist from 30 June 2014. TravelManagers hopes that by speaking out more ‘visible’ support will be forthcoming from other companies in the travel industry now that real examples of the scheme’s shortcomings are proving to be a reality.

“We urge the travel agency community to be actively discussing the pros and cons of ATAS with the management of their agency group and with AFTA itself. The time remaining for any refinement to the scheme is now less than three months and travel agents have still not been provided with details of premiums and conditions for Travel Intermediary Insolvency Insurance. Consumer confidence in retail travel distribution is critical and without it your business and the perception of the travel agent industry could change forever,” says Mayo.

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