Protect your holiday savings when using a travel agent

3 June 2015 | Is your money secure if your travel agent isn't?

Safeguard your savings

Travel agents can take the hassle out of scouring flights and accommodation online by doing the hard yards for you, but some travellers are out of pocket thousands of dollars following the collapse of three travel agents so far this year. What's more, consumers are often surprised to find out that travel insurance doesn't cover the collapse of a travel agent.

Here's two things you can do to take the worry out of your booking:

  • Credit card chargebacks: You may pay a bit extra in merchant fees but if you select 'credit' when paying, you can claim the cash back on your card.
  • Travel agent protections: Ask your travel agent if they have consumer protections that will protect you in case they go broke.

Travel agents on permanent holiday

Gold Coast travel agency Getaway Escapes appointed a liquidator in February, with the Queensland Office of Fair Trading Executive Director Brian Bauer saying, "Often when this type of business goes into liquidation, some customers believe they have booked and paid for travel, but find those arrangements have not been processed through to the travel and accommodation providers".

Two more travel agents followed in May: CTS Travel, a travel agency at Altona Meadows in Victoria; and Travel Rockhampton, a helloworld associate agency.

Consumers on Facebook page CTS Travel liquidated report losing thousands with the collapse of CTS Travel, as the travel agent took customers'  funds for bookings but didn't forward them on to airlines and tour companies.

The Travel Monitor reports helloworld's David Padman as saying Travel Rockhampton customers will not have their travel plans affected thanks to the helloworld Customer Protection Policy.

Credit card chargebacks

If your travel agent goes bust and you booked using a credit or debit card, and you selected 'credit' when you paid, you can ask your bank for a credit card chargeback. Beware there are time limits which can vary from 30 to 120 days after you paid, depending on your bank. So apply for a chargeback as soon as you become aware something is wrong.

Travel agents with consumer protections

Travel agents don't like credit card chargebacks. The problem for them is if they've already sent a deposit or the full funds through to a supplier, such as a tour company, and the tour company goes bust then the consumer hits them with a chargeback and the travel agent takes the financial hit.

So some travel agents, such as helloworld, TravelManagers and members of the Magellan Travel Group, have taken steps to protect themselves and the consumer. Ask your travel agent what kind of protections they have in place to protect you from their insolvency.

What about travel insurance?

As it stands, there is no travel insurance policy that covers the collapse of a travel agent. Less than a third of the insurers in the most recent travel insurance review provide limited cover for the insolvency of a travel services provider such as an airline, hotel, bus, or car rental agency. And two travel insurers, Aussietravelcover and CHI Travel Insurance provide cover if a specified list of travel wholesalers or tour operators, such as Qantas Travel and Scenic Tours, go bust but none cover the collapse of a travel agent.

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