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Scary spate of agent terminations fuels ATAS anxiety

April 24, 2014 Corporate, Headline News 1 Comment Email Email

egtmedia59The termination of a further five travel outlets by the Travel Compensation Fund after consumer claims were received has intensified the debate over the looming Australian Travel Accreditation Scheme (ATAS).

The five Queensland-based outlets to be axed are all part of Tribal Travel, which had another five outlets terminated on 17 February.

TravelManagers says the latest terminations provide yet another example of why all ATAS members should be required to have Travel Intermediary Insolvency Insurance to offer consumer protection. Coles-Training_250X250px

So far this year, 12 agency outlets in five states have failed to properly account to suppliers for monies received from customers. While figures are not yet available for claims for 2013 and 2014, the figure for 2012 (the latest data available) shows that 1299 consumer claims were paid out, a grand total of AUD 4.185 million.

“Today’s announcement of further travel agent closures across Australia, due to their failure to properly account to suppliers for monies received from customers, further highlights the real concerns for consumer protection and the importance of getting it right with ATAS,” TravelManagers’ chairman, Barry Mayo, commented.

“As from 1 July 2014, without mandatory Travel Intermediary Insolvency Insurance, the potential for a significant number of clients to be adversely affected increases dramatically.”

Mayo suggests the industry should examine how overseas bonding agents – particularly the Travel Agents Association of New Zealand (TAANZ) and the Association of British Travel Agents (ABTA) – protect the consumer from travel agent collapse.

Mayo explains: “The current regime in New Zealand under the TAANZ bonding scheme is designed to provide consumers with an assurance that if they deal with a TAANZ member they will at least receive some protection against the travel agents’ failure to properly account to suppliers or other intermediaries for monies received from customers for that purpose.

“Whilst there is no legal requirement for travel agents to offer financial protection for their customers in Britain, ABTA insists on it being a condition for ABTA membership. TravelManagers strongly believes AFTA needs to ensure it does make Travel Agent Insolvency Insurance a mandatory requirement for ATAS accreditation.”

State and territory licensing of travel agents will cease from 30 June 2014. TravelManagers has an email address and encourages active participation on the pros and cons of ATAS as the scheme is currently proposed.

“We implore the travel agent community to speak out and offer more visible support as real examples of the scheme’s shortcomings prove to be a chilling reminder of what the future may hold for Australian travel agents without ATAS imposing mandatory insolvency insurance for members,” Mayo says.

“Time is running out so now is the time to act.”

Mayo is not the only one in the industry concerned about the issue. Some industry observers feel that with ATAS not maintaining the level of financial oversight that the TCF conducts, travel agent defaults will inevitably increase. The feeling is that TCF monitoring of travel agents’ financial results has reduced the number of defaulting agents –  as well as softening the effect of defaults on consumers.

Any big collapse that leaves consumers exposed will produce major negative fallout for agents – and smaller agents are likely to feel the heat more than their larger competitors. Thousands of small, independently-owned travel agents comprise the  segment of the travel agent industry most likely to be damaged by any loss of consumer confidence.

While it’s comparatively easy for Flight Centre (sometimes compared to the Woolworths of the travel industry) to protect customers and let customers know it, small agents (whether independent or branded) cannot make the same claim without ATAS Participant Insolvency Insurance – and a credible and prominent means of communicating that they have it.

Some in the industry, and in consumer advocacy groups, feel that state and territory ministers responsible for Consumer Affairs don’t yet fully appreciate the potential scope of the problem – the size of the consumer protection issue in terms of consumer dollars, numbers of disrupted travellers, risk to small business owners and loss of jobs.

Unless ATAS is beefed up, critics say, the impact of collapses after the TCF disappears in just nine weeks could be close to catastrophic.

Written by : Peter Needham

Currently there is "1 comment" on this Article:

  1. AgentGerko says:

    Once again I point to the idiots who decided that the perfectly workable TCF needed replacing because some internet based companies weren’t aprticipants. Note people, there are thousands of non-Aust based internet travel companies who weren’t part of the TCF and won’t be part of ATAS. You have ruined a good system just so AFTA could get more power in the industry. Thankfully nobody can make AFTA membership compulsory.

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