Make insolvency insurance mandatory, Mayo urges AFTA

Make insolvency insurance mandatory, Mayo urges AFTA
By admin


The Australian Federation of Travel Agents must make insolvency insurance a mandatory component of its new accreditation scheme to ensure consumers are truly protected, says TravelManagers chairman Barry Mayo.

In his latest criticism of the scheme, he referred to a recent TCF list of terminated agents which includes six travel agency locations that failed to deliver contracted product to Australian travel consumers just last month.

According to Mayo, the “chilling reality” is that, under AFTA’s Travel Accreditation Scheme (ATAS), the customers of these agencies would not be offered the same level of protection as that currently offered by the TCF.

“The recent publication as part of a list of terminated agents on the TCF website of travel agents, identifying Travelwiz in Sydney and Tribal Travel with five outlets in four States, as having their TCF membership revoked due to receipt of consumer claims as recently as February, highlights the real concerns for customer protection,” he said.

“As from July 1, without mandatory Travel Intermediary Insolvency Insurance, the potential for a significant number of clients to be adversely affected increases dramatically.”

The end result would be out-of-pocket clients and potentially negative media coverage which would damage the industry as a whole, he added.

Mayo identified accreditation as the “most important issue” facing the industry and, with just three months until the launch of the new scheme, urged travel agents to actively discuss the proposed scheme with their own management and also with AFTA.

“Should ATAS adopt mandatory Travel Intermediary Insolvency Insurance this has the benefit of giving consumers surety and clarity that their funds are protected if using an ATAS accredited travel agent, whilst in the hands of that agent,” Mayo said.

However, AFTA chief executive Jayson Westbury said one of the major aspects of reform was to deregulate the industry and “unshackle” travel agents. Forcing agents to take out insurance would be counter-productive to that and would simply create a TCF by another name.

He added that larger agency chains would turn their back on the accreditation scheme should insurance be made mandatory which would risk fragmenting the industry.

Westbury also rejected claims that isolated failures will tarnish the rest of the industry.

“One bad egg doesn’t bring everyone else down,” he said.

Westbury again urged Mayo to embrace the voluntary nature of the scheme and give it time to work.

“If the structure fundamentally fails, and is must be given at least 12 months, then we will review it,” he said.

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