AFTA to suspend chargeback scheme

The Australian Federation of Travel Agents (AFTA) has announced what it says are “necessary changes” to its chargeback scheme due to the significant and unprecedented challenges of the COVID-19 pandemic for the travel sector.

As a result of the COVID19 pandemic being declared and the cessation of future bookings for travelling being the reality of the current state of the travel industry, the AFTA Chargeback Scheme (ACS) will be suspended for new bookings from 1 May 2020.

The ACS will be placed into hibernation with a claims process being implemented and introduced over the coming months as necessary.

All ATAS-accredited agents who opted in as an ACS participating agency, who have made an eligible transaction via an eligible card until the 30 April 2020, will continue to have protection intact for those transactions.

AFTA said this will include sales on Virgin Australia, and should the airline’s situation progress to insolvency, claims would be eligible consistent with the hibernation plan being put in place.

Due to the pandemic status of the virus and the ongoing lack of forward sales, AFTA said the ACS will not be in a position to renew participation for the foreseeable future and the scheme will be placed into a hibernation state until further notice.

No new applications or renewals will be offered for ACS participation.

All ACS participants have been notified of these changes and the necessary by-laws have been passed by the ACS board to effect these changes.

AFTA also acknowledged the service of Katrina Barry and Kevin Forder, who have served as directors of the ACS and have resigned from the board. The board of the ACS will remain intact during hibernation with Jayson Westbury, Charlie Gow-Gates and Mike Thompson staying on.

“COVID-19 has brought with it some dark times for the travel industry, and all of us involved in the formation of the scheme and the cover that has been in place for the past two years are disappointed that these decisions and actions that are required at this time,” Westbury, chief executive of AFTA, said.

“The good thing is that sales until the 30 April will carry protection, and I hope that when we all come out of this pandemic, we will be able to bring the scheme out of hibernation to support AFTA members in the future.”

AFTA has been in dialog with the Reserve Bank of Australia (RBA) in relation to the situation about card chargebacks, and has provided an update on the outcome of those discussions.

The RBA has written to the card-issuing banks, card-acquiring banks and card schemes about reasonable and fair dealings for travel agents during these unprecedented times, and has requested the following:

That a cardholder application for a chargeback against a travel agent should be dealt with reasonably and given time to dispute the chargeback and not debit the travel agents bank account until this process has been followed.
That a cardholder application for a chargeback for a refund against the travel agent where the supplier has offered a travel credit/voucher should not be successful.
That a cardholder application for a chargeback against the travel agent as a result of an extended time delay, while the agent awaits the refund from the supplier, should not be successful.
That an acceptance by all parties to the card schemes that more time than usual will be required to settle matters before taking action against the travel agent.

AFTA noted these arrangements communicated by the RBA do not relate in the circumstances where the supplier has become insolvent and the peak industry body continues to explore options for how this may be addressed during the pandemic.

“AFTA is very pleased that at a time when it is really needed, the RBA has taken steps to support travel agents so that a reasonable approach can be taken when chargebacks may be raised against travel agents,” Westbury said.

“We are in difficult times and AFTA is well aware of the risks and challenges faced at this time, and will continue to work with stakeholders with a view to finding equitable solutions as more serious circumstances present during this pandemic.”

Featured image credit: iStock/Kritchanut

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ACS afta AFTA chargeback scheme australian federation of travel agents jayson westbury katrina barry Kevin Forder