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No Guaranteed Consumer Financial Protection From July Despite TCF Having Paid $17 Million Over Six Years

April 15, 2014 Mobile travel consulting No Comments Email Email

TravelManagers continue to reiterate that many travel agents will lose out if Participant Insolvency Insurance (APII) is not made mandatory under the Australian Federation of Travel Agents’ (AFTA’s) proposed Australian Travel Accreditation Scheme (ATAS).

TravelManagers’ stance has not altered despite Friday’s announcement of Flight Centre’s intention to join the proposed scheme.

“This announcement comes as no surprise, given Flight Centre has two directors on the AFTA board. It is much easier for a large company like Flight Centre to protect customers if required, but it is much more difficult for smaller and independently-owned travel agents to make the same claim without ATAS Participant Insolvency Insurance. Should an agency without APII collapse it will be consumers who will lose money,” says TravelManagers’ Chairman, Barry Mayo.

Flight Centre has now joined AFTA in failing to address and provide reassuring answers to very simple questions consistently asked by TravelManagers, such as:

1.      In what way is “forcing ATAS members to take out Participant Insolvency Insurance” replicating the alleged “uneven playing field” that is supposed to have existed for the travel agent  industry under the Travel Compensation Fund (TCF)?

TravelManagers do not ask this question with the intention of trying to retain the TCF or burden Flight Centre with costs it does not deem as necessary. TravelManagers believe travel agents not wanting to take out APII will then choose not to join ATAS. This stance is based on improving the consumer ATAS’ value proposition, ensuring integrity of the travel agent industry and upholding the high standing Australian tourism is regarded for.

2.      How can Flight Centre claim the new system (ATAS) will “address issues of administrative red tape and provide a level and consistent playing field for the Australian travel industry at large” when no detail of APII cost is available, the conditions relating to this insurance are still unknown and there is little or no information about the other commercial safeguards AFTA has appointed Gow-Gates to bring to market?

TravelManagers has to ask how likely is it that the administrative red tape for many travel agents that Flight Centre and AFTA deride will simply transfer from the TCF to Gow Gates/IPP?

3.       What qualifications does AFTA currently have to undertake a ‘purposeful’ quality assessment of intending participants in ATAS to ensure consumers are protected by ‘meaningful’ high standards of business and professional conduct? Does AFTA truly believe the consumer will view this as a better value proposition than an ATAS member having Participant Insolvency Insurance?

TravelManagers is concerned AFTA has the frontline travel consulting experience in its ranks to assess the capability of either long established travel professionals or new entrants encouraged to open shop by less stringent financial requirements to deliver the service quality and professionalism that it claims the ATAS brand will deliver. There is already a very low cost of entry and even these are set to virtually disappear, making the travel agent industry vulnerable to damage caused by inexperienced, under-capitalised or unscrupulous new entrants.

Mayo is of the opinion that State and Territory Ministers responsible for consumer affairs do not recognize the potential size of this issue in terms of consumer dollars or disrupted travellers. Over the most recent six year reporting period (2007 – 2012) the TCF paid consumers in excess of $17 million for claims received from customers of agents who would have been unable to travel due to travel agent collapse.

“If the seriousness of this issue is not recognized by State and Federal governments it could be argued that they are abdicating their responsibilities for upholding consumer rights.  Their lack of support and visibility in ensuring that ATAS has some form of consumer protection is a real concern.”

TravelManagers is urging all travel agents, particularly owner/operators and small to medium sized agencies to speak up now to protect their businesses. “Without more public support to challenge the current ATAS thinking, ATAS as proposed will become a flawed reality in less than 11 weeks.” says Mayo. “People should be contacting AFTA, writing to trade media in the travel industry, their MP and local State government minister responsible for consumer affairs or by all means contact TravelManagers on

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