Commissioner's Blog: Avoid pre-holiday blues – buying travel tips
With Acting Consumer Protection Commissioner David Hillyard
Avoid pre-holiday blues – buying travel tips
The recent collapse of a Perth travel agent highlighted that some Western Australians were unaware there is no longer a licensing system for travel agents and that the associated compensation scheme does not exist anymore.
Global Plus Holidays in Northbridge is now in liquidation. Up until industry deregulation in 2014, licensed travel agents had to be members of the Travel Compensation Fund (TCF), which acted as a last resort insurance if agents or associated tour operators went bust.
We need to approach travel purchases a bit differently in the deregulated marketplace.
When buying a holiday from a travel agent ask whether they have insolvency insurance to cover their place of business (not for purchase by customers) and whether the policy extends to intermediaries such as tour operators.
When taking out your own comprehensive travel insurance check whether it covers agency insolvency or the collapse of suppliers such as airlines, hotels and cruise or tour operators. Many policies do NOT offer cover for a travel agent going under because the insurance marketplace is still adjusting in light of the TCF winding down last year (2015).
Using a credit card, or selecting ‘credit’ on a debit card might attract a small percentage surcharge but it could be worth it if there is a ‘chargeback’ option in the event of insolvency. You need to check your card provider’s chargeback policy to be sure of the transaction reversal options available; it can vary from card to card and there may be a time-limit from the date or purchase to when you can make a claim.
Recent travel agency collapses involved numerous customers who had paid large amounts in cash or by bank transfer and they could NOT explore a ‘chargeback’ option. They became unsecured creditors and had to register with the liquidator. The reality is that consumers are at the end of a long line of people owed money, with debts secured by mortgages trumping their claims.
Proof of purchase
When you buy travel, get the agreement in writing and ask for a receipt. This is your record of what you have paid, when and what for. You may wish to carry out your own checks with third party suppliers to ensure payments have been passed on. When paying for airfares in full you should be able to confirm with the airline that your tickets are secured and ask for the electronic confirmation from your agent. Remember that an itinerary printed off by the agent does not secure your travel; insist on formal documentation from the suppliers.
As was the case before travel agent licensing ceased, the Australian Consumer Law (ACL) applies to airline, accommodation or holiday package purchases. Under the ACL travel products or services must be as described or advertised and an agent must operate with an acceptable level of skill, otherwise the customer is entitled to a refund, compensation or to have the service provided again.
If you are booking with a travel agent, check they are accredited. A voluntary scheme called ATAS is run by the Australian Federation of Travel Agents and has an industry Code of Conduct including complaint handling processes. Currently about 260 WA businesses are registered and you can find them at www.atas.com.au. There are other initiatives to promote and maintain professional standards, for example some airlines participate in the Airline Customer Advocate scheme: www.airlinecustomeradvocate.com.au.
In the last financial year (2015/16) Consumer Protection received around 700 enquiries and 165 complaints regarding travel agent issues.