While AFTA has stated that the recent collapse of CTS Travel Services is the first case of an ATAS-accredited agent going bust, other non-ATAS agents have certainly gone down that path over the same period. Their clients have phoned the Travel Compensation Fund (TCF) in desperate attempts to get their money back – to no avail.
No easy way remains to keep tabs on agents that close or collapse. Before agent licencing ended on 30 June 2014, the TCF served as a central point which gathered information about agency closures and consumer losses.
The Office of Fair Trading (OFT) is warning customers of Getaway Escapes and AusFlights to confirm their travel arrangements after the sudden closure of both companies.
Getaway Escapes sold vouchers for discount flights, bundled with accommodation. AusFlights was a subsidiary company responsible for the travel bookings.
The OFT has been advised both companies have been placed in liquidation, with Mackay Goodwin appointed as liquidator.
Fair Trading Executive Director Brian Bauer encouraged customers of both companies to contact airlines and hotels directly to confirm that bookings in their name had been made and paid for.
“Often when this type of business goes into liquidation, some customers believe they have booked and paid for travel, but find those arrangements have not been processed through to the travel and accommodation providers,” Mr Bauer said.
“Unfortunately, once the liquidation process begins, this often means any payments made can’t be recovered.
“Consumers who paid by credit card should contact their bank to see if the charges can be reversed.”
Chief executive of the TCF, Glen Wells, says CTS Travel Services is certainly not the first agent to fail since licensing ended.
Wells fields calls from consumers pleading “is our money protected?”
“The answer is certainly no, if they’ve paid their money after 30 June 2014,” Wells said. The TCF has received calls in relation to CTS Travel Services, but the answer is the same.
Wells confirmed that the TCF still has over AUD 25 million sitting in the fund. It will stay there until the TCF is wound up, possibly by the end of this year.
The TCF has in the meantime paid out nearly AUD 9 million to different organisations, Wells said: AUD 3 million to AFTA, AUD 3 million to CHOICE and AUD 3 million to the state governments to help fund a consumer education program to tell people they need to be wary when they make their travel bookings.
The TCF is still dealing with a number of legal cases pending, and it still pays out for consumer losses, provided the consumers booked and paid before 30 June last year.
In the case of some agencies in Queensland, they dealt in vouchers and people held on to those vouchers. They can claim because the money was paid before 30 June.
Any money remaining in TCF coffers at wind-up time (and their should be millions of dollars) will not go to agents or the travel industry but back to state government revenue.
The TCF trust deed states that the cash will go back to the states pro rata, depending on how many agents from each state were in the fund as at 30 June 2014. The cash will then flow back to state governments’ consolidated revenue, rather than being used for any travel industry purpose.
Wells noted that although consumers were now being advised to pay by credit card, merchant’s fees put many people off credit cards.
While people paying by credit card can sometimes get a chargeback in case of agent or supplier default, Wells said banks set a timeframe on that and many consumers lost out.
He said the TCF received calls at the rate of about three or four a month, from people who had gone to their banks or credit card providers and hadn’t been able to recover their funds.
Written by Peter Needham