The sixth and latest known travel agency collapse since 14 May 2015, Adelaide’s Zym Travel, has prompted ACA Lawyers’ travel law expert Steven Lewis to comment on the overall situation since the 1 July 2014 disbandment of the national licensing and consumer protection scheme and its replacement by government deregulation.
Lewis is perhaps uniquely qualified to comment, as his distinguished legal career was preceded by direct travel industry experience, adding weight to his reflections, insights and advice.
Prior to becoming a lawyer, Lewis supplemented his law degree with specialist travel agency qualifications, gaining practical working knowledge of airfare construction, wholesaling and retailing over the course of a 10-year career with Jetset Tours.
Lewis has reflected on the first twelve months of travel agency deregulation in his latest article ‘Bon Voyage? 12 Months Since the Deregulation of Travel Agents’. It can be viewed on the ACA Lawyers’ website here.
Lewis offers advice on travel insurance and how consumers can best protect themselves.
Lewis is a regular commentator in the media on class actions and legal issues as his practice often sees him involved in complex multi-party litigation against large and well-resourced opponents. Lewis has extensive appellate experience in the New South Wales Court of Appeal, the Full Federal Court of Australia and the High Court of Australia.
An innovative lawyer, Lewis successfully brought a world-first class action against a number of international airlines including Qantas and British Airways on behalf of travel agents, for the recovery of commission on fuel surcharges.
Lewis’ travel background was without doubt a factor in achieving the Federal Court’s landmark verdict resulting in Australia’s IATA-accredited agents achieving commission payments totaling an estimated AUD 80 million from Qantas and other airlines.
The ‘Bon Voyage? 12 Months Since the Deregulation of Travel Agents’ article is not Lewis’ first comment on the introduction of ATAS.
Prior to the deregulated model coming into effect, Lewis made predictions on the future of the industry. His views, originally published in a trade magazine, can be viewed here on the ACA Lawyers site. The article was recently referred to in the 22 June 2015 e-newsletter of The Justinian Australia’s leading and most highly respected Legal Newsletter. See: Top legal newsletter exposes agent deregulation dangers.
One year on and Lewis’ 2014 predictions have become a chilling reality:
It remains far from clear what consumers will see as the tangible benefits of ATAS accreditation in the absence of an industry wide and uniform consumer protection regime.
While the removal of business overheads may provide some short-term joy, the dismantling of the barriers to entry opens the door to poor business practices and is an invitation to undesirables. There is a real risk to the industry’s integrity and hard won professional reputation. There is an even greater risk for consumers.
It will only take a few large collapses for consumers to demand their politicians legislate for adequate protection. Travel agents should be careful what they wish for.
Since the disestablishment of the Travel Compensation Fund (TCF), consumer losses due to travel agency collapses are estimated to have reached AUD 1.5 million, proving that in the case of many travel agencies, consumer protection against fraudulent actions is non-existent.
Industry sources estimate a number of agency failures have occurred since deregulation, resulting in a loss of clients’ money. The problem is, with the abolition of the TCF, there is no longer a central data source to inform both the public and the travel industry.
As explained by AFTA, ATAS in its current form is not a replacement for the TCF and unlike the TCF offers no security for consumer funds whilst in the hands of an ATAS accredited agent.
The Australian consumer was for 28 years protected against financial loss stemming from either fraud, agent mismanagement, or both. This ceased from 30 June 2014 and many in the industry are left wondering to what extent that has been communicated to consumers.
The next and far more important question is: how many more consumers will be adversely affected before government reviews its action to terminate the industry-funded TCF?