The travel industry was making the headlines for all the wrong reasons this week.

In scenes reminiscent of NCIS, armed and helmeted police officers were videoed descending on a small unit in the Sydney south-eastern suburb of Kingsgrove.

The person they were looking for was not a drug dealer or a gangland honcho, it was a travel agent.

Sydney-based Zahra Rachid had been making headlines after she was arrested and charged for swindling her travel clients out of hundreds of thousands of dollars. The heart-broken victims spoke to Nine’s A Current Affair revealing they were missing out on once-in-a-lifetime trips, such as a family reunion in Greece, because Rachid had failed to book the trip and gave them fake itineraries instead.

Does the travel industry need more regulation

Following the news, Travel Weekly asks: Does the industry need to do more to self-regulate and protect itself from those who are bent on destroying its reputation?

MTA travel agent and NLP mindset coach Susan Barton certainly thinks so.

“Anyone could come along and set up a tour for their friends and make money,” she tells Travel Weekly. “Before all of this, we had the travel compensation fund – the TCF. It was very regulated.”

The TFC – which required agents to put money in a government-legislated fund to protect consumers if the operator or agent failed – was closed in 2014. The fund has been replaced with a series of insurance options for the prospective traveller; one of these is ‘end provider insurance’.

Speaking of Rachid, Barton said “I am not surprised that we have got this huge gap now, because that will attract people who think they can make an easy buck and then leave. It needs regulation.

Susan Barton.

“I find it very scary and it’s something I’m educating my clients on all the time. When they are looking at a deal – who is the person they’re booking with? Who are they handing their money over to?”

Consumer champion Adam Glezer who regularly appears on news outlets such as news.com.au, agreed with Barton’s sentiment, adding that the lack of regulation in travel leads to bad behaviour.

“I was not surprised. I’ve certainly dealt with several situations where a travel agent has deliberately gone and tried to rip off my clients. It’s just that this one got caught,” he said.

“I do get more travel complaints than any other industry and that’s because there are a lot of underlying issues. I have been strongly advocating for regulation in this industry for several years.”

Does the industry need tighter regulation?

Glezer says it is shocking that agents are not required to keep trust accounts given the amount of capital they hold.

“How travel agents do not require trust accounts is beyond comprehension,” he says. “Lawyers require trust accounts, real estate agents require trust accounts – to protect client funds and keep them separate from their own. However, travel agents can do whatever they like with it.

“Where is the money going? What gives them the right to spend money that is not theirs? It’s earmarked for a third party.”

Another issue the industry faces is a lack of transparency, he says.

“There are regularly several third parties involved in the transaction that are not disclosed to the consumer.”

Not disclosing markups is also a “major issue” he said, adding this allows “for unethical agents to take advantage of the elderly and vulnerable”.

Separating the wheat from the chaff

Glezer adds that there are many incredible agents doing the right thing and says they are hurt by bad actors.

Consumer champion Adam Glezer.

“During COVID, I know a lot of travel agents that were extremely ethical in the most difficult of times. However, the ones that were either not thinking of the customer – or deliberately trying to rip them off – tarnish the industry’s name.

“The ones that do the right thing have a genuine care for their customers. They do everything they can to look after their clients to the best of their ability. Whereas the ones that do the wrong things are just trying to find ways of holding on to customers funds; using excuses not to refund at every opportunity.”

Whilst bad actors do certainly exist in the industry, travel agent Andrew Sullivan, who is director at The Don’t Forget Travel Group, disagrees that they make the whole industry look bad and says they largely out themselves.

Andrew Sullivan.

“I don’t think it reflects badly on the whole industry. I certainly believe that you should be a member of ATIA and part of the ATAS accreditation. I’m a big believer in that,” he said.

“I don’t think there should be any more regulations or it depends on what those regulations are. I mean, I don’t really want to go back to the old days of the travel compensation fund.

“Yes, the barriers to entry are a lot lower in travel now, but I think if you’re not any good you’re not going to be in the industry for very long because there’s so many options to choose from. The bad ones will get weeded out.

“It’s unfortunate that she did take their money, but she’s basically a criminal. She’s not a travel agent.”

Is compulsory accreditation the answer?

Whilst accreditation is not compulsory, Sullivan says any potential agent should sign up and be ATAS-accredited.

“I think everyone should be accredited, then if a customer sees you are not accredited they will start to ask questions,” he says.

Following Rachid’s arrest, ATIA released a statement confirming that Rachid had her ATIA accreditation as it was cancelled by the body in 2019.

“For us, that actually shows that the scheme is actually doing its job,” said ATIA CEO Dean Long. “It’s looking at businesses, identifying concerns, and when they are, removing them from the scheme and making sure that when you do see that they’re ATAS accredited, you know that you’re dealing with businesses that have continually abiding by the laws, and also meeting the best business practices that the travel industry has.”

Long says that state consumer affairs departments both support and share information regarding the ATAS accreditation, plus about 160,000 people visit the ATAS.com.au site each year, in addition to the thousands of calls ATIA receives a year from consumers checking people’s accreditation status.

“It’s not common in the industry,” he says of the agents’ alleged bad behaviour. “I think that’s the good thing. Where it does happen, it’s really disappointing, it’s not the best look for the industry, it doesn’t put the industry in the best positioning, which is one of the reasons why we need to be dealing and reinforcing that we only work with those people that are ATAS accredited, and as an industry, we work together to ensure that everyone who is a good business is ATAS accredited because that is the point of difference.

“That’s what the consumer needs to see to have continued confidence in our critical travel sector.”

If you have any views or news on the issue, please email sofia@travelweekly.com.au