Freedom or folly? The Travel Compensation Fund was wound up yesterday. It means Australian travel agents are no longer obligated to have a licence or take out consumer protection insurance. Previously all agents had to pay a TCF levy and have their accounts audited. If an agency went under owing money, consumers were compensated.
Now those rules have been abolished after intense lobbying by retail travel heavyweights such as Flight Centre, which paid many millions in fees to the TCF each year.
While the TCF will not provide compensation in relation to travel agent collapses after 30 June 2014, consumers will have 12 months to lodge claims with the TCF for collapse before that date.
“Under the Travel Industry Transition Plan, a voluntary industry operated accredited plan will be introduced for travel agents, and a consumer advocacy body will be established to deal with consumer issues concerning travel agents,” the TCF says on its site.
That voluntary scheme is called ATAS and is managed by the Australian Federation of Travel Agents.
To become an accredited ATAS agents applicants must:
- Be a Travel Intermediary
- Agree to abide by the Code of Conduct and Charter
- Sign a declaration (Deed Poll) to confirm that your corporate policies, procedures & any consumer marketing activity will comply with the Australian Consumer Law (ACL).
- Be a ‘Fit and Proper Entity’, be a registered Australian Business Number (ABN) holder, comply with relevant sections of the ASIC administered Corporations Act 2001 as required and provide certified financial accounts to prove solvency.
- Provide evidence of adequate Public Liability Insurance and Professional Indemnity insurance.
- Demonstrate adequate level of staff education and training.
- Provide evidence of an adequate complaint handling policy and procedures.
Will the consumer be worse off?
AFTA says not but the bottom line is there will no protection for consumers if a travel agency goes under, taking their money with them.