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Facebook fury and criticism as travel agency goes bust

May 18, 2015 Corporate, Headline News 4 Comments Print Print Email Email

egtmedia59Irate clients (and a critical travel agent commentator) have taken to Facebook to vent their shock, frustration and fury after an Australian travel agent went into sudden liquidation last week, forcing holidaymakers to cancel their travel plans and leaving many clients thousands of dollars out of pocket.

CTS Travel Services in the southwest Melbourne suburb of Altona Meadows has been placed in the hands of Queensland liquidator, Robson Cotter Insolvency Group.

A handwritten sign in the window of the agency, which said the business was relocating, was quickly replaced by another notice saying the business was in the hands of liquidators.

The publicity will not help the reputation of travel retailing. A student and her boyfriend, who paid out AUD 9000 for flights and accommodation for a US holiday, found the bookings had been cancelled because the agency had not passed on the payments, Melbourne’s Herald-Sun reported.

Travel insurance didn’t cover the loss.

Another woman who paid out a similar amount for a family trip to Disneyland was also out of pocket.

The paper quoted AFTA chief executive Jayson Westbury advising consumers to pay for flights and accommodation using credit cards – and to make sure their travel insurance included coverage for travel agency insolvency.

AFTA issued a statement saying it was “currently investigating the matter to fully understand the impact and our primary focus is on how consumers can be assisted”.

AFTA advises industry members “to check whether they have any outstanding accounts with CTS Travel Services, and affected consumers or industry members should contact the appointed liquidator on:

Robson Cotter Insolvency Group

Suite 3, Factory 2, 97 Boundary St, West End QLD 4101

Contact: John Colwell, phone 07 3270 8500  Website: http://www.rcinsol.com.au/

Liquidator Roland Robson said customers might have to wait months to learn how much money they could retrieve from the collapsed agent – if any. Robson said his firm had been fielding numerous calls from angry creditors.

Channel Nine’s ‘A Current Affair’ is said to be looking into the story.

A Facebook page called CTS Travel Liquidated https://www.facebook.com/groups/970366446316363 has been set up, attracting plenty of comments, including one hard-hitting letter from a travel agent, mentioning the defunct Travel Compensation Fund (TCF).

Well-known Brisbane travel agent Nick Page used the Facebook page to make the following observations:

Since the “government” (both sides of politics were implicit in doing this) disbanded the compulsory Travel Compensation Fund (TCF) and Travel Agent Licencing system in 2014, anyone, and I mean anyone, can set up a travel agency and take clients’ money – with zero checks or balances in place.

The Australian Federation of Travel Agents (AFTA) has introduced a voluntary organisation to replace the TCF – known as AFTA Travel Accreditation Scheme (ATAS). However, even ATAS accredited agencies, cannot offer their clients any financial protection at all – ATAS has been set up as a profit making business – with no cover for the end purchaser whatsoever!

Try and contact them and see what advice they can give you – I would be very interested to know how they deal with your enquiry as they are now the government backed replacement for the TCF.

I know this is not of much use to anyone who has lost their money and precious holidays but if the old system had been in place they would not have been issued a licence to carry on trading as finances were assessed annually.

I own a small niche travel agency business (operating for 8 years now) and I find it truly appalling that anyone can be left in this position where an agency goes broke and their clients are left high and dry.

I have not enrolled my company in to the ATAS scheme as I do not believe it holds any value for my clients as it offers ZERO protection.

As a responsible business owner I am personally lobbying for new regulations where all sellers of travel products should hold a compulsory licence only issued on the proviso of passing assessed financial tests – and thus moving all travel agents on to equally sure footed ground operating under the same regulations with compulsory protection for clients.

I wish you all the very best of luck in your endeavours to get you money returned.

Most of the other comments on the Facebook page are from out-of-pocket clients.

One customer wrote: “Unfortunately my mother discovered on Saturday that the holiday she paid for in October 2014 is no longer. Mum went to CTS 2 weeks ago to ask for her tickets and they told her they hadn’t arrived, a blatant lie. Mum is an older lady and didn’t realise that airlines don’t send tickets any more so took their word for it. Mum was supposed to leave in 4 weeks. She went to her bank today and they have been absolutely fantastic getting things in motion for her because she used her credit card.”

Another aggrieved client wrote: “I too have lost the money paid for flights back at the start of March.. Additional cost of rebooking the flight additional $200+ and my travel insurance policy does not cover financial collapse of tour operators etc.”

A third client wrote: “We took out comprehensive international travel insurance with QBE, it was the policy which CTS recommended to us we booked back in August 2014. I spent quite a bit of time on the phone today with the insurance company and am holding onto a glimmer of hope that section in the policy covers us up to $10k if the agency goes under and has not passed on our funds. Have a look into it, this was the 3rd call I made to the insurance company . The staff handling the first 2 calls told me I wasn’t covered, then 3rd time lucky!!!! The diligent staff member went through the entire policy section by section and came across this section. Fingers crossed we will qualify for this claim. Definitely look into it. Good luck.”

Another Facebook user commented: “The word is spreading and I really hope all can recoup their losses. Hopefully A Current Affair will make it viral. Unfortunately this may be a growing trend with the cessation of TCF and people being unaccountable for their actions. It sucks big time. I feel for you.”

Written by Peter Needham

Currently there are "4 comments" on this Article:

  1. A. CHIRON says:

    Why doesn’t the public check out an agency before they plunk down the money? I do not even require mayment until 30 days before the date of travel. Use travel wholesalers in you country NOT ONLINE!!!!. It is called reaching out a touching the company!!!
    I book NOTHING with a wholesaler not listed as a major one. I am located in the US. I hold a $10,000 bond in a local bank for that reason. I am licensed by the states. The public is looking for the almighty deal and not the safety of their money!!!

  2. Nicky Ross says:

    We too are a small family run Travel Wholesaler based in Brisbane. We have decided not to join ATAS at this stage also, as we are continuing to follow TCF rules and hold all client funds in a Client Account until such time as they are dispersed to suppliers. I wish TCF had continued. It was supposed to be cheaper for the agencies and better for the consumer….what a crock! It would cost me more to be in ATAS than it ever did on an annual basis with TCF. AND I was required to provide financial documentation to support continued membership to the Fund.

    None of the Travel Agencies received a return of funds paid to become part of the scheme, this going to the State Governments…perhaps the State Government should be forking out the refunds to these clients. Then they’ll realise what a complete waste of time this whole process has been.

  3. Julie says:

    Gosh, A. Chiron, that’s a bit harsh. This travel Agency was not online. They had a shop at my local shopping Centre. Don’t be too quick to point the finger at the very people who paid over their hard earned cash in return for a holiday. They are not the bad guys here.

  4. a chiron says:

    Because they are in a shopping means that they can afford the rent. I have seen many not open in the morning. You must check them out with their wholesalers or cruise lines. These are fragile times. I always say to new clients to check me out withe the local convention bureau and I am licensed and have a bond. I can supply all this information plus I have recent copies of the insurance of my tour and transfer vehicles which are owned by another company. I have watched too many people get scammed.

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