Queensland consumers oppose plan to scrap travel protection

CFA member the Queensland Consumers Association is calling on the Queensland Government to oppose the abolition of national arrangements to protect customers when travel agents go bust.

The Association has asked the Queensland Consumer Affairs Minister, Jarrod Bleijie MP to oppose any such proposal put to the national meeting of Consumer Affairs Ministers in early December.

The Association says that a Draft Plan to be considered at the meeting proposes to abolish the Travel Compensation Fund (TCF) which currently compensates consumers when travel agents become insolvent.  The TCF relies on supporting state and territory legislation.

Association spokesperson, Ian Jarratt says the Draft Plan would require out-of-pocket consumers to make a claim via the legal system, or to try to use the charge-back facility available with some credit cards.

Mr Jarratt, said these are much less effective protections for consumers than a specific compensation scheme and the other option in the Plan, claiming against travel insurance, is not currently possible and may not be available in the future.

The Association says consumers need effective protection against agent insolvency because many consumers still use travel agents, many transactions involve substantial amounts of money (for example for expensive overseas holidays and cruises), and monies can be held by agents for substantial periods of time.

Recent examples of significant travel agent insolvencies include Kumuka in July, affecting over 800 travellers and involving over $2 million in claims, and in the last few days over 5,000 passengers booked on Athena Cruises.

CHOICE also opposes the plan to scrap the TCA without any effective alternative, as does the Insurance Council of Australia, some travel agents and travel providers.

The Association and CHOICE have also called for the provision of funding for a national Travel Consumer Advocacy Centre to provide a strong, well-informed consumer voice on all travel and travel related issues and also be an independent source of information for consumers.

The Association says such a Centre is needed, together with the availability of effective specific protection for customers when travel agents go bust, to achieve the “enhanced consumer protection” that in mid 2011 Ministers agreed was required

The Association’s and CHOICE’s submissions on the Draft Travel Industry Transition Plan are available at: http://www.consumerlaw.gov.au/content/Content.aspx?doc=mcca_consultation/MCCA_consultations.htm