Bad publicity is flowing fast from the collapse of CTS Travel Services in the Melbourne Suburb of Altona Meadows, with the revelation that the collapsed agent, currently the subject of an investigation by Channel Nine’s high-profile A Current Affair television show, was listed as a member of ATAS.
CTS Travel Services went into sudden liquidation earlier this month, forcing holidaymakers to cancel their travel plans and leaving many clients thousands of dollars out of pocket. While the Travel Compensation Fund (TCF) covered consumers in exactly that sort of event, the TCF has been phased out.
The CTS Travel Services website was swiftly shut down, but archived caches of the site show its homepage carried a panel displaying the AFTA and ATAS logos and stating that CTS Travel Services “is an approved participant in the AFTA Travel Accreditation Scheme 2014”. The panel gave the firm’s accreditation number for ATAS (the voluntary travel agent accreditation scheme administered by AFTA) and stated that its ATAS membership was valid till 30 June 2015.
CTS Travel Services was listed on the website of ATAS and AFTA as an ATAS participant, though the company’s name has now been removed.
CTS Travel Services has been placed in the hands of Queensland liquidator, Robson Cotter Insolvency Group. A meeting of creditors was held on Friday at 101 Collins Street, Melbourne. Reg Eustace was elected chairman and it was resolved that the meeting be adjourned for 14 days (to Friday 5 June 2015) and switched to a venue more convenient for most creditors, in the City of Hobsons Bay.
Last week, Channel Nine reporter Alicia Muling confirmed that A Current Affair is on to the case.
On a Facebook page set up by creditors of CTS Travel Services and named CTS Travel Liquidated, Muling wrote on Friday: “A Current Affair will be out the front of 101 Collins St this morning. Would you all mind coming and introducing yourselves to me?”
The Facebook page has attracted plenty of comments from creditors and travel agents alike (see: Facebook fury and criticism as travel agency goes bust), including one hard-hitting letter from well-known Brisbane travel agent Nick Page, mentioning the defunct TCF. The Facebook page reveals that some creditors have lost close to AUD 10,000 in the CTS Travel Services crash and have had their holidays ruined.
In a story headlined “Holiday dreams crushed”, the Maribyrnong and Hobsons Bay Star Weekly, a local paper circulating in the region where CTS Travel Services operated, reports that more than 70 individuals, couples and businesses have lost more than AUD 344,000 in the crash. Some sources feel the eventual total will be much more than that.
Muling’s revelation that A Current Affair (which is watched by about a million viewers) would have a team outside the creditors’ meeting drew favourable comments on the Facebook page, though some were hedged with caution. Travel agent John Gercken implored Muling: “Just please don’t do a media hype-up and tar all travel agents with the same brush. Most of us work hard to give customers value for money and great holidays.”
The fear of being tarred with the same brush will be on the minds of a fair few agents. Clients of CTS Travel Services cannot understand how an agency trading seemingly without problem on the surface can suddenly plunge into liquidation, taking clients’ money with it.
Suggestions last year that mandatory insolvency insurance be included in ATAS were soundly rejected by AFTA. It seems, however, that a lot of consumers don’t realise booking with an ATAS-accredited agent may not protect them if the agent goes bust.
ATAS states on its website: “Booking with an ATAS accredited agent means you’re in safe hands and can travel with confidence.”
The site goes on to list 10 advantages for consumers of booking with an ATAS accredited agent. Number one is “Peace of Mind.”
“ATAS travel agents have met strict standards and criteria in order to become nationally accredited,” the ATAS site declares. “Their accreditation means they are the best in the industry, credible, well trained and professional businesses. This means you can book your travel knowing you’re in the safe hands of a trusted and reputable travel agent.”
AFTA recently published a consumer flyer for agents to use. It encourages consumers to “Always look for the ATAS symbol when booking travel”.
The flyer poses the question: “How do [ATAS] agents become accredited?” To which its answer is: “Agents must meet a set of strict criteria and professional standards in order to become accredited. Every year an agent must renew their accreditation and provide updated business compliance details.”
AFTA is now reminding agents in an advertising campaign: “It’s time to renew your ATAS accreditation!”
In the light of negative publicity stemming from the CTS Travel Services collapse, agents might be forgiven for thinking twice.
Written by Peter Needham