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Important Changes to Travel Compensation Fund

June 27, 2013 Corporate No Comments Email Email

The Ministers responsible for travel agent regulation in the States and ACT have signed off on a new TCF Trust Deed to come into force on 1 July 2013.

This new TCF Trust Deed implements the decisions, which Ministers agreed on in December 2012, known as the Travel Industry Transition Plan (TITP).

The Plan proposed travel agent licensing no longer be required after 30 June 2014, with the consequence that the TCF will wind down, with its closure scheduled for mid to late 2015.FIA-250x250

There will accordingly be no requirement for TCF participation after 30 June 2014.

Under the old TCF scheme, TCF participation was a mandatory requirement of travel agent licensing.

There will be important changes to the current arrangements for both travel agents and consumers.

From 1 July 2013, participants in the Fund will no longer be required to lodge their Annual Financial Review (including, for many, audited financial statements) with the TCF.

Also from 1 July 2013, the TCF will no longer assess financial viability of new and existing agents, or require agents who do not meet TCF financial criteria to lodge guarantees.

New and existing travel agents will need to remain or become TCF participants until 30 June 2014.

The TCF consumer compensation scheme will continue to operate until 30 June 2014. This means that the TCF will continue to compensate travel clients of licensed travel agents where the clients lose money due to a travel agent collapse occurring prior to 30 June 2014. Consumers will still have 12 months from collapse to finalise claims collapses prior to 30 June 2014.

Under the TITP, and the new TCF Trust Deed, a proportion of TCF reserves (currently approximately $29M), will be used to fund industry and consumer initiatives and for the voluntary accreditation of travel agents. The remainder will be returned to the participating State and ACT governments in proportion to the number of travel agents in each jurisdiction.

Key dates:

1 July 2013 Annual Financial Reviews for 2012/ 2013 cease

1 July 2013 New application forms for new and existing TCF participation are put in place, with no requirement for financial assessment

1 July 2013 Lodgement of Guarantees no longer required

1 July 2014 Applications for new and existing agents cease

1 July 2014 Consumer claims cease for new collapses

1 July 2015 Run out period ceases for consumer claims for collapses prior to 1 July 2014

July to December 2015 TCF closes

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