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CTS Travel creditors call for reinstatement of TCF

June 16, 2015 Corporate, Headline News 4 Comments Print Print Email Email

egtmedia59Creditors owed many thousands of dollars by a failed Melbourne travel agency have called for the reinstatement of the Travel Compensation Fund (TCF).

Many had their holiday dreams ruined by the crash, which left consumers out of pocket, in many cases without hope of compensation.

Demands for the return of the TCF are mounting, from consumers and travel agents alike.

Following the collapse of CTS Travel Services in the Melbourne Suburb of Altona Meadows last month, the chairman of the CTS Travel creditors’ committee, Reg Eustace, says consumers have been left unprotected since the Federal Government dissolved the TCF a year ago.

“Consumer protection for the travelling public is just not there,” Eustace told the local Hobsons Bay Leader.

Creditors at the meeting voted to replace Brisbane-based liquidators Robson and Cotter with David Ross and Shanon Thomson of Hall Chadwick, as joint and several liquidators of the company. The newly appointed liquidators are investigating the demise of CTS Travel with view to reporting to the Australian Securities and Investments Commission.

On CTS Travel Liquidated, a Facebook page set up by creditors of CTS Travel Services, Eustace wrote that apart from the investigation of the company’s affairs “is the issue of the winding up of the Travel Compensation Fund and the gaping hole it has left in the protection of the travelling public.

“I agree this is a matter for our MPs to address with the appropriate pressure from we, their masters.”

Other agents and prominent travel industry figures are making similar calls.

Well-known Brisbane travel agent Nick Page wrote on CTS Travel Liquidated: “There is $25 million still sitting in the TCF fund (paid in by reputable travel agents such as myself, to protect clients such as you) that is due to be doled out to the state governments – when in theory it should be there to protect travellers!

“Maybe contact your MP,” Page suggested.

He said travel customers should try to get the TCF (or something similar) reinstated as soon as possible.

“Any responsible travel agent is also campaigning for this, but we only have a small voice compared to the public,” Page wrote.

Travel agent John Gercken added: “The industry body AFTA was given millions of travel agents’ dollars from the TCF to inform consumers about ATAS, so it’s interesting that you, and most others, have never heard of it.

“One should not need to ask about an agent’s insolvency policy,” Gercken added.

“Under the TCF all licenced agencies had to be members and therefore their clients were protected. The Compensation Fund should be reinstated and the $25 million they are holding be put towards consumer protection and not being syphoned into general govt revenue.”

Commenting on the overall situation, TravelManagers’ chairman Barry Mayo said yesterday: “Neither State governments, nor their consumer affairs departments nor the travel industry should be surprised that the chairman of the CTS Travel creditors committee is calling for the TCF to be reinstated.

“With the deregulation of the travel agent industry there is no longer any minimum financial requirement to commence trading so there is nothing to stop anybody opening a travel agent, with or without travel business experience.

“This effectively means that anybody can currently set up a travel business without any form of consumer protection,” Mayo said.

“This was not the case pre-ATAS.”

The collapse of CTS Travel Services featured prominently in ‘Travel agents from hell’, a segment of Channel Nine’s A Current Affair program screened last week (See: Million Aussie viewers watched ‘travel agents from hell’.) The program made reference to calls for “a complete overhaul of the industry”.

AFTA chief executive Jayson Westbury appeared on the segment, commenting on the demise of CTS Travel Services (which was ATAS-accredited) and conceding that such cases were “particularly difficult for people to comprehend”. Westbury added that ATAS was now making broader background searches on applicants to weed out previous bad offenders or potential bankrupts.

Written by Peter Needham

Currently there are "4 comments" on this Article:

  1. Mark C says:

    Why was the TCF disbanded in the first place ? probably as the result of lobbying by Travel business interests – welcome to the modern era of governance by minority interest groups……….

  2. Julie Allen says:

    Definitely add me to the list. I was talked down at ever meeting I went to with head office at the time with Travelscene AX and also at the AFTA/ATAS Meetings. A lot of people were only thinking of the cost of the audits they had to have ever year and the extra work it entailed. TCF was definitely a selling point in our office and peace of mind that we only booked with TCF Wholesaler members. It definitely was a relieve when certain companies closed.

  3. Kevin M says:

    Bringing back the TCF is certainly an option, but unless they can REGULATE the ENTIRE industry, including the internet agencies and overseas websites, as well as all of the states and territories of Australia, it is pointless. All or nothing.

  4. Stephen G says:

    Let’s talk facts!. The TCF was a failed, overly bureaucratic entity with a shocking cost/benefit ratio which failed to protect many consumers (remember the Ansett debacle) and to keep up with changing travel operators such as online “travel” intermediaries to protect consumers.
    It stashed away millions from hard working travel agents now grabbed by governments for its own purposes. Why didn’t it, instead, insure consumers through third parties against agency collapses at lesser cost?
    ATAS is a scheme which requires agents to meet professional hurdles to differentiate themselves from the rest and instil confidence in the agencies standards, much like other professions such as accountants. It is, and is not meant to be, a consumer protection scheme.
    In every profession there are scammers and cheats – why single rogue travel agents out from rogue builders, financial planners, solicitors, and such? Why apply different criteria?
    The answer lies in applying consumer protect laws as for others and consumer paid travel insurance….why should honourable travel agents have to foot the bill for consumers?

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