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The first test for deregulated travel industry

Consumers are being reminded to take extra steps to protect themselves

25 August 2014

CHOICE says the collapse of Australian Specialty Tours Pty Ltd in Victoria will show how well consumers are protected following industry deregulation on 1 July this year.

Australian Specialty Tours went into liquidation on the 15th of August 2014[1], leaving an unknown number of consumers out of pocket.

“The collapse of Australian Specialty Tours is the first test for our now deregulated travel industry,” says Tom Godfrey, spokesperson for CHOICE.

“Only consumers who bought products before 1 July will be able to get compensation for their losses from the Travel Compensation Fund. Those who paid via credit card may be able to get a chargeback from their bank.”

“Otherwise they’ll have to try their luck with their travel insurance – if they have any,” Mr Godfrey said. 

However CHOICE warns that this may be a lost cause. None of the policies compared in its most recent travel insurance review protect consumers against travel agent collapse.

“Now that the Travel Compensation Fund is being wound down, consumers need to take extra steps to make sure they are protected.”

“Firstly, consumers need to do their research in order to find a reputable agent. Agents with accreditation, such as ATAS accreditation, are required to meet minimal professional standards family and friends can also be a great source for recommendations.” 

“Secondly, consumers should ask their agent what steps they have taken to protect their client’s funds. There is now a range of insurance products that agents can take out to protect your money.”

“Thirdly, the travel insurance market may help if something goes wrong. But be sure to read the product disclosure statement to see exactly what it covers – so you don’t get caught out later.”

CHOICE says that if consumers pay by credit card, they may be able to get a chargeback from their bank if something goes wrong, but they should keep in mind that credit cards can attract hefty surcharges and high interest rates.

Consumers should also remember that when booking travel, either through an agent on online, they are protected by the Australian Consumer Law.


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