Previously Unreported Travel Agency Collapse Makes Sunday Headlines Across New South Wales
The travel industry continues to make headlines, the latest report entitled ‘Travel agent disappears with money, leaving customers stranded,’ featured in Sydney’s The Sun Herald on Sunday 24 April. The Sun Herald report also featured across New South Wales online publications of Daily Liberal, The Border Mail, Illawarra Mercury, Northern Daily, The Young Witness and Western Advocate.
TravelManagers’ Chairman Barry Mayo continues to be concerned about another negative media report that clients have lost money through a travel agency collapse making headlines across New South Wales, even though the failure of Pack N Go Travel occurred eighteen months ago.
“This travel agency collapse has gone undetected and unreported until this weekend. The question needs to be asked how many more travel agent closures have there been that have gone unreported?”
The report states that the agency owner Taha Baghdadi from Bankstown-based Pack N Go Travel was recently prosecuted and ordered to pay almost $30,000 in fines, cost and compensation to three victims who lost their money and were left stranded at Sydney Airport, their holiday ruined before it had even begun.
The report quotes the New South Wales Fair Trading Commissioner Rod Stowe stating that the agency owners actions “are a clear case of a travel agent engaging in unconscionable conduct” and advising that “consumers could protect themselves from dodgy travel agents by checking they belonged to the Australian Federation of Travel Agents’ travel accreditation scheme.”
Mayo is concerned that this advice, albeit assumedly unintentional, is misleading for consumers.
“By representing that consumers booking travel through an ATAS accredited agent will be protected against financial loss is clearly not true. ATAS accreditation, by itself, affords no consumer protection against an agent’s failure to account as has been shown since May 2015 there have been three ATAS accredited agencies that have failed financially, two of which have left consumers without their money and travel arrangements.
Mayo advises that this agency with its consumer losses occurred approximately six months after the New South Wales and other state governments dismantled the Travel Compensation Fund (TCF).
“The reality is if the TCF or a similar scheme still existed, these customers from Pack N Go Travel would have been protected and the fund would have ensured they received their travel arrangements or had their money returned. It’s that simple. Yet instead the industry continues to be marred by media reports of unscrupulous travel agent behaviour which continues to undermine consumer confidence with booking with a travel agent with every negative report.”
Mayo strongly believes it is the state governments that are guilty of disbanding the TCF without ensuring the travelling public was provided with an effective form of consumer protection against travel agent insolvency.
“It can no longer be disputed that consumer losses now being experienced is as a direct result of state governments disbanding the TCF and replacing it with an industry accreditation scheme that failed to demand robust financial criteria or deliver consumer protection. Government and individual members of the industry need to acknowledge these consumer losses are not going to cease and recognise that an accreditation scheme without consumer compensation is worthless from both consumer and industry perspectives.”
Mayo reminds the travel agency community that $23 million dollars of TCF funds contributed by travel agents remains intact.
“Immediate steps need to be taken to ensure these funds are used to reinstate a more robust financial oversight of the industry and provision of consumer protection.”
Mayo believes the state governments need to take responsibility and urgent action before more consumers are out of pocket and the integrity of the Australian travel agent industry is further compromised.
“Will the state governments take action to insist on an alternative and independent form of consumer protection against travel intermediary insolvency that is consistent and universal and what does the government intend to do with the remaining $23 million dollar in funds? Why do the state governments find this so hard to answer?” asks Mayo.