Agencies scrambling for cover

Magellan Travel Group have taken the flexibly afforded by the ATAS scheme to launch what it calls a “market-leading solution” with Willis Australia for agents to protect clients’ funds against the insolvency of suppliers and credit card chargeback less than a year after the disbandment of the Travel Compensation Fund (TCF) on 30 June 2014.

While the timing of the announcement comes just a week after Travel Weekly reported the insolvency of CTS Travel Services which left many irate consumers out of pocket after the agency allegedly failed to transfer funds to suppliers leaving clients unable to receive credit card chargebacks, Magellan Travel Group ceo Andrew Macfarlane told Travel Weekly the issue was discussed after members urged the group to “create a solution on their behalf” at last year’s October conference.

“We then engaged Willis [Australia] and it has been a number of months in the planning and implementation as we wanted a comprehensive and affordable solution,” Macfarlane said.

The solution took effect on 1 April 2015, after the group’s brief to “create a market-leading solution for agents who want their clients’ funds protected”, was met.

“This solution covers the failure of any supplier – airline, wholesaler, tour or cruise operator, accommodation or ground transport provider. It also covers agency insolvency; a customer’s money is protected from the time of payment to fulfilment.”

Magellan joins Travel Partners which launched their own version of a similar protection scheme in April and Mobile Travel Agents (MTA), ‘Zero Flight Risk™’ launched in February.

Meanwhile, the saga continues for former CTS Travel clients who have since contacted Travel Weekly with their recounts of dealing with the agency, alleging managing director, Jenny Stoodley, had been aware of the anticipated voluntary liquidation, but continued to reap funds from unassuming customers just days before it ceased trading.

Had the former CTS Travel clients booked and paid a participating Magellan Agency member and made a written demand for a substantiated loss under the new policy, Macfarlane said they would have been able to lodge a claim on their behalf.

ATAS general manager, Gary O’Riordan told Travel Weekly CTS Travel Services is the first agent affected in “almost 11 months of trading in the deregulated environment”, and that the reasons behind the CTS closure “we believe relate to matters that require police investigation”.

“ATAS is not a compensation scheme, it is an accreditation scheme. Consumers should check what insurances their ATAS agent has in place, use a credit card where able and request information on what insurance is available to purchase for their own protection,” O’Riordan said.

A creditors meeting is expected to take place at Servcorp Australia’s Melbourne office on 22 May to discuss the CTS matter.

Image credit: Marvel

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Email the Travel Weekly team at traveldesk@travelweekly.com.au

Latest comments

Jodie Twigg says:
May 19, 2015 at 3:28 pm
My daughter and her partner were one of the many customers hit hard by the voluntary liquidation of CTS Travel Altona Meadows. She lost a total of close to $9000 for a trip she had been planning to America. Her flights and accommodation were paid in full back in August and October 2014. We have now had to pay for additional airfares and accommodation which has cost another $7500. We have been advised by the creditor that we will most likely see no money at all due to the agency having no liquidable assets.
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- AUSSIEtraveller says:
  May 20, 2015 at 12:44 pm
  so why wasn’t she jumping up & down within a day of paying for her tickets ?
  When someone pays us for tickets, they get issued & emailed either same day or next business day, as soon as we have cleared funds.
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Travel Counsellors says:
May 19, 2015 at 12:59 pm
Travel Counsellors are the leaders in travel financial protection and announced the most comprehensive initiative to the Australian travelling public in April 2014, over one year ago and immediately as the previous scheme ended. But all credit to Magellan for following our lead, better late than never!
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- Ashamed to be human says:
  May 19, 2015 at 2:07 pm
  would be great if us smaller companies had the ability to arrange our own insurance.
  Good on TC, MTA and Magellan for going against the ATAS and their closed shop option with Gow Gates (which undoubtedly they get a kickback from).
  Daft that “they” stopped the TCF.
  ATAS is just a sham offers clients nothing what-so-ever!
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