What is happening?
From 1 July 2014 the travel industry will be deregulated. A compulsory licensing scheme for travel agents will be replaced with a voluntary accreditation scheme called the ATAS. Travel agents will no longer need to be members of the Travel Compensation Fund, which used to provide compensation to consumers when travel agents went bust.
What was the Travel Compensation Fund?
When travel agents go bust, consumers can be left out of pocket for service, such as flights or accommodation, which they didn’t get a chance to use. The Travel Compensation Fund used to collect payments from travel agents and used the money to compensate consumers if this was to happen to them. From 1 July, the fund will gradually decrease its services, and will officially wind up in 2015.
What is the ATAS?
The ATAS is a voluntary accreditation scheme run by the Australian Federation of Travel Agents (AFTA). It is meant to provide assurances for consumers that a travel agent is creditable and professional.
What does the ATAS offer consumers?
ATAS accredited travel agents will be required to follow a code of conduct aimed at providing quality assurance for consumers. The scheme will also include a complaint mechanisms and minimum standards on staff training.
Accredited travel agents will be required to provide ATAS with some regular reports showing their ability to meet their financial obligations. However taking out insurance policies protecting consumers in the event that the travel agent goes bust (insolvency insurance), the main function of the old compensation fund, is only optional.
What about my Australian Consumer Law rights?
Your ACL rights will continue to apply to travel products and services, and they do for all products and services. For information on ACL and travel, see this guide.
Why is this happening?
Since the Travel Compensation Fund was created, the travel market has changed significantly. Today it is common for consumers to bypass travel agents all together with the use of online booking tools and comparison sites. Many of these services providers do not need their own travel agent licences, especially if they are based overseas, which they often are.
CHOICE argued that the Travel Compensation Fund should be reformed and not abolished, but the decision to close the fund was made in late 2012.
What should consumers do?
Because insolvency insurance is only optional under the ATAS, it is worth asking travel agents if they have a policy. There are also other options, such as credit card charge backs, which can help consumers. For more check out our travel tips