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Prospects are dim for a new Travel Compensation Fund, according to a new Report

March 2, 2016 Headline News, Travel Law No Comments Email Email

The Australian Consumer Affairs Regulators have reported that they are ready to close the door on providing new Government protection for travellers who lose money paid to insolvent travel agents.In its 2014-15 Annual Report which was issued last week, Consumer Affairs Australia reports that the Queensland Office of Fair Trading has led a project to set up an information bank about insolvent travel agents and possible unconscionable conduct in the travel industry.

This project was set up following upon the removal of the safety net that was provided by the now abolished Travel Compensation Fund for payments made to travel agents who failed to make the travel arrangements booked.

The Report provides this progress report:

The working party is reviewing 16,500 records covering 9,000 complaints and 4,000 enquiries made to regulators in 2013 to 2014 and relating to the $30 billion plus consumer travel and accommodation industry. Preliminary results show no notable change in the number, or nature, of consumer complaints since the changes. The working party will complete its analysis before considering whether further compliance or education action is necessary.

The 2014-2015 Annual Report contains details of the two initiatives the Regulators have pursued to educate the public following upon the abolition of Travel Agents Licensing and the Travel Compensation Fund (which took effect from 1 July 2014):

  • The Regulators funded two programs, namely the Australian Federation of Travel Agents (AFTA) Travel Accreditation Scheme (ATAS) and the CHOICE ‘travel hub’ project. Each program was awarded a $2.8 million grant from surplus funds held in the Travel Compensation Fund account.

The CHOICE program began with a survey – which it called a ‘Holiday Horrors’ campaign – carried out in December 2014 and January 2015 holiday period. CHOICE has published its survey findings and its tips for avoiding common problems on its website – see Top seven travel troubles and how to avoid them

  • The ACL Regulators implemented a national education campaign –
  • To help travel consumers and the travel industry to understand their rights when booking a holiday where payments for travel were no longer protected by a government fund;
  • To educate Australians on the questions they need to ask before buying travel and travel products; and
  • On how to seek a remedy if something goes wrong with a travel purchase.

They called it the Pack some peace of mind campaign, and made use of a range of communications to publicise the Pack. The campaign had an impressive response – it reached 16 million users in terms of media engagement. The campaign has ended and the dedicated website has now ceased.

As a result, consumer protection against travel agency insolvencies will rely entirely upon the ATAS Scheme membership and insolvency insurance held by travel agents and which are contained in some travel insurance policies.

Anthony J Cordato, Travel Lawyer

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