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Consumer Losses Reach $530,000 for All Travel

July 1, 2014 Corporate No Comments Email Email

Consumer losses from the All Travel collapse, an ‘affiliate’ agency of Helloworld, is now estimated at $530,000 as reported in the 27 June edition of The Australian. This is an increase of 32% from the $400,000 in consumer claims originally reported from the NSW based travel agency in trade media reports on 25 June.

There have been many conflicting reports in recent days around All Travel’s Helloworld status and uncertainty as what consumer protection its customers would have had, if the collapse had been just a week later.

As All Travel’s travel agency collapse occurred prior to 01 July, clients are afforded financial protection under the Travel Compensation Fund (TCF). The TCF will be wound up at close of business today in favour of a new accreditation scheme (ATAS), which without mandatory membership and mandatory consumer protection does not deliver consumers any guarantee of protection against travel intermediary insolvency.

The Australian in its 27 June report has confirmed All Travel was an ‘affiliate’ agency of Helloworld.

The significance of All Travel being a Helloworld affiliate agency is that should this collapse have occurred tomorrow there appears little dispute that All Travel’s clients would have lost money and forfeited travel with no recourse according to a 25 June trade media report. This is potentially contrary to other reports in trade publications on the same day including Helloworld’s website under the “We Look After You” section that states the “customer protection policy applies to all Helloworld members”.

The Australian reports that an estimated $100,000 or 19% of the total All Travel consumer losses are envisaged will be recovered from credit card charge backs.

The Australian Federation of Travel Agents (AFTA) has advised on numerous occasions that many travel agency customers pay by credit card and subsequently these charge backs will protect the majority of customers from travel agency insolvency.

“With only 19% of All Travel’s client losses being attributed to credit card payments I think it clearly shows the reality that client payments using credit cards are decreasing, not increasing as AFTA has claimed. This is due to more and more suppliers charging for merchant fees. This is just another example of how consumers are at risk from financial loss due to insolvency and why mandatory consumer protection is needed as part of ATAS accreditation,” says TravelManagers’ Chairman, Barry Mayo.

TravelManagers has been passionately vocal around the need for mandatory consumer protection to form part of ATAS accreditation from the beginning.

“TravelManagers has always been concerned about the customer and ensuring adequate financial protection is afforded after the winding up of the TCF. We have raised our concerns with AFTA on numerous occasions that we do not want to see a weakening of public perception and consumer confidence in travel agents decline as a whole from damaging consumer media coverage such as the All Travel mention in The Australian,” says Mayo.

AFTA responded in a 01 April issue of Travel Daily to TravelManagers continued emphasis for the need for consumer protection to form a compulsory part of ATAS saying “There is no good argument to making insolvency insurance mandatory”.

“The recent All Travel collapse is augment enough in our view,” says Mayo.

With the implementation of ATAS only a day away, Mayo believes the only sensible option is to run the TCF and ATAS side by side for a period of time and use the industry funded TCF $27 million reserves to extend the TCF through to the end of the year.

“It should not be viewed as being too late to ensure ATAS provides a value based consumer proposition. It will give security for consumers who may be impacted by the failure of a travel agentAn extension of TCF so as to run parallel to ATAS through to the end of the year, appears to be the only logical solution, TravelManagers urge travel agents and other travel intermediaries who have similar concerns to email to their State Minister responsible for consumer affairs without delay,” says Mayo.

Contact details for each state minister are available at: http://www.travelmanagers.com.au/GovernmentContactDetails.pdf .

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