Collapse raises question mark over credit card chargebacks

Collapse raises question mark over credit card chargebacks
By admin


The recent collapse of All Travel Toukley in NSW proves that the majority of consumers will not be protected from travel agency insolvency by credit card chargebacks under ATAS, according to TravelManagers boss Barry Mayo.

Travel Compensation Fund chief executive Glenn Wells last week told The Australian that he was hopeful that $100,000 of the estimated consumer losses of $530,000 would be reclaimed via credit card chargebacks – 19% of the overall sum.

“With only 19% of All Travel’s client losses being attributed to credit card payments I think it clearly shows the reality that client payments using credit cards are decreasing, not increasing as the Australian Federation of Travel Agents has claimed,” Mayo said. “This is due to more and more suppliers charging for merchant fees.”

As a result, he questioned claims that credit cards chargebacks will be sufficient to financially protect consumers in the event of a company failure in a post-TCF industry.

Instead, this latest collapse provides another example of the financial risks faced by consumers upon the winding down of the TCF, according to Mayo. 

He once again called for consumer protection to be made a mandatory part of ATAS which will be implemented tomorrow.

Last week, it emerged that TravelManagers has engaged in government talks with the aim of extending the TCF so that it runs side by side with ATAS for a period of six months, to be funded by the remaining TCF reserves of $27 million.

“It should not be viewed as being too late to ensure ATAS provides a value-based consumer proposition,” he insisted.

“An extension of TCF so as to run parallel to ATAS through to the end of the year, appears to be the only logical solution.”

He once again urged travel agents and other travel intermediaries who have similar concerns to email their state minister responsible for consumer affairs without delay. 

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