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The ATAS is nigh! Another big agency collapse reminder

May 7, 2014 Corporate, Headline News No Comments Email Email

egtmedia59The non-voluntarily termination of yet another travel agency, involving big customer claims, has highlighted glaring flaws in the proposed AFTA Travel Accreditation Scheme (ATAS).

The Travel Compensation Fund (TCF) has terminated Summa Travel & Tours (trading as Travel Access in Blacktown) on grounds of consumer claims being received. Industry reports say the claims could reach AUD 250,000. The TCF imposed the termination on 1 May 2014 and, as usual in such instances, it can be expected to pay out so consumers don’t lose their money.

The TCF will disappear on 30 June 2014, with ominous implications.

“The news of Travel Access’ removal from TCF is another in a long line of travel agencies having their TCF membership revoked due to consumer claims,” TravelManagers chairman, Barry Mayo, commented.

“With estimated losses up to AUD 250,000 from one longstanding travel agent alone, this highlights the absolute need and real concern TravelManagers has for ATAS not making Travel Agent Insolvency Insurance mandatory.

“The potential for a significant number of clients to be adversely affected and severely out of pocket has been dramatically demonstrated by this latest collapse. The question needs to be asked, what financial protection Travel Access’ clients would have under the proposed ATAS scheme?”

Travel Access in Blacktown has been operating since 1982. Early indications resulting from this new termination, as a result of claims received from customers, appear to indicate that the volume of claims from Travel Access’ customers are much larger than the other travel agent defaults this year, a TravelManager’s statement said. Terminations now total four agents with thirteen outlets in five states plus the Northern Territory.

Mayo implores the State and Territory Ministers to accept some responsibility for the situation that will prevail from 1 July 2014 and take an active role in making Travel Agency Insolvency Insurance a mandatory component for ATAS accreditation.

“In less than seven weeks, ATAS will replace TCF and if implemented in its current form, guaranteed consumer protection will disappear,” Mayo says.

“Unless government intervenes with urgent changes to the proposed scheme consumers will have no guaranteed protection against travel agents failure to account for monies received. This will lead to travellers exposed to heavy financial losses, major costs and inconvenience with little or no clarity as to when they are and are not protected.”

TravelManagers strong view as a longstanding AFTA member and from a professional travel agent’s perspective is that the consumer should not be adversely impacted by the successor scheme to TCF.

“TravelManagers believe the governments’ endorsement of ATAS as currently proposed will severely impact on the financial surety of consumers,” Mayo says. “We are seeking answers from the State and Territory Consumer Affairs Ministers as to why the Travel Agent Insolvency Insurance component of ATAS is voluntary.”

There appears to be limited engagement from the consultative committee working with AFTA on the development of ATAS.

”It is of great concern to TravelManagers that the consumer has been largely ignored throughout the process between the consultative committee set up by the Legislative and Governance Forum on Consumer Affairs and AFTA, yet it is the consumer who will be hugely impacted through the introduction of new legislation.

“TravelManagers only hopes this latest situation with Travel Access highlights to government the very real and serious flaws in the proposed ATAS scheme and, despite TravelManagers having serious misgiving about the absence of information on the cost of ATAS Participant Insolvency Insurance, government takes an active stance to ensure consumer financial protection is preserved,” Mayo concluded.

Edited by Peter Needham

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