Consumers warned as industry reform put to test

Consumers warned as industry reform put to test
By admin

The deregulated travel industry has already come up against its first challenge with the collapse of Victoria’s Australian Specialty Tours.

The company, which went into liquidation on August 15, has left an “unknown” number of consumers out of pocket,, according to consumer watchdog Choice.

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

“Only consumers who bought products before July 1 will be able to get compensation for their losses from the Travel Compensation Fund.”

Those that paid via credit card may also be eligible for a chargeback from their bank. However, others will need to contact their travel insurance provider if they have one. But Choice warned that this measure could be a “lost cause” as none of the policies compared in its latest travel insurance review protect consumers in the event of 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,” Godfrey said.

He advised the public to “do their research” in order to find a reputable agent, with evidence of ATAS accreditation a good indication that they meet professional standards.

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

But he warned of the necessity to read the product disclosure statement of those insurance products carefully to ensure they provide adequate protection.

Meanwhile, Australian Federation of Travel Agents chief executive Jayson Westbury told Travel Today that Choice’s comments were reassuring.

“I’m pleased to see that Choice is on message with the Pack some peace of mind campaign in terms of the way the industry will operate in the future,” he said. “Over time, it will help consumers think more carefully about who they book their travel with.”

While he confirmed there is still no firm indication about the financial impact of the Australian Specialty Tours collapse, he did reveal that AFTA has to date received only two phone calls from concerned consumers.

“We made recommendations for them to seek a chargeback from their credit card company if applicable, but those affected by having paid cash are advised to commence proceedings with a solicitor under Australian Consumer Law,” he said.

“It’s the first collapse since deregulation so it’s bound to be a bit of a learning curve for everyone to see where the calls go and how it is managed.”

The government yesterday launched the Pack some peace of mind campaign which aims to grow awareness of the deregulated state of play in the travel industry among consumers while highlighting the benefits of booking with an ATAS-accredited agent.

AFTA will also undertake its own push to drive the ATAS message to consumers, but this will commence once the government campaign has come to an end, Westbury revealed.

The latest tally of ATAS accredited locations is now just short of 2000, he added. There is currently an 11 business day backlog in processing applications, but this is expected to reduce with time.

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